Maket report

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The market continued its upward climb through the week ending 28 February, with the CASE30 gaining another 5.45 per cent and breaking a new record by reaching 11,335 points. Although blue chips led the rally, some small caps gained much attention. Transactions at the end of last week and early transactions this week show signs of a possible profit taking spree.In a positive development, Chairman of the Cairo and Alexandria Stock Exchange Maged Shawqi signed a memorandum of understanding with the chairman of the Cyprus Stock Exchange (CSE) to establish relations between the two markets. This paves the way for Egyptian companies to be listed on the CSE in the future.

Shawqi also assured investors that derivatives would start trading on the CASE by 2009.

ORASCOM CONSTRUCTION INDUSTRIES (OCI) is expanding its investments in the Ain Sokhna Industrial Zone through its wholly owned subsidiary National Steel Fabrication (NSF).OCI is investing approximately LE450 million to construct a new state-of-the-art steel production plant, with construction activities beginning this year.

The new plant will have an annual production capacity of 80,000 tonnes raising OCI's overall steel production to 120,000 tonnes. This includes its plants in Algeria and Egypt's 6th of October Industrial Park.

According to HC-Securities, NSF has also completed the acquisition of IBSF which specialises in the design and manufacture of all types of boilers, pressure vessels, condensers and heat exchangers. These serve as integral components in power plants and various industrial projects. The acquisition was completed at a total enterprise value of LE75 million.

ORASCOM TELECOM HOLDING (OTH)'s CEO Naguib Sawiris denied Italian police allegations that he could be involved in a suspected corruption scandal over the 2005 acquisition of the Italian mobile phone operator Wind. Sawiris issued a statement on Friday saying that he hadn't even been notified of an investigation by Italian police, and denied any wrong doing in the deal.

Italy's financial police announced on 28 February that it had launched an investigation into the deal through which Weather Investments bought wind from energy giant Enel for 4.8 billion euros. The investigations are related to consultancy fees which were allegedly paid during the deal negotiations.

Enel's board said in a statement that while the company was cooperating with the investigation, Wind had been sold to the highest bidder and no corruption was involved. A total of 11 people, including Enel CEO Fulvio Conti, are under investigation in the probe regarding more than 90 million euros, which prosecutors believe were paid as bribes but appeared in reports as consultancy fees.

In other news, OTH is getting a $2.5 billion loan from a consortium of 12 local and international banks, to be used for refinancing outstanding amounts under the company's existing $2.5 billion loan facilities and for general corporate purposes.

EFG HERMES' results for fiscal year 2007 showed an 82.5 per cent increase in net profits, to reach LE1.28 billion. This was partly fed by a 91.4 per cent surge in operating revenues at LE2.6 billion, fuelled by a significant improvement in regional brokerage activity. In addition to Egypt, EFG has brokerage activities in Kuwait, UAE and investment banking operations in UAE. Currently, 30 per cent of EFG's operating revenues are generated in UAE, up from 10.7 per cent in 2006.

On another front, the company is forming a new investment fund in partnership with the Principal Bank for Development and Agricultural Credit. The LE100 million fund will direct 40 per cent of its investments to equities and the rest in fixed income securities.

CREDIT AGRICOLE BANK (CAE) : The bank posted a whopping 25times surge in its net income through 2007 to reach LE523.9million. The significant growth cane due to the absence of the LE317.5 one off loss that it incurred in 2006 in the form of charges related to EAB's employee fund deficit. The bank's 2007 results reflected a 23.1 per cent increase in net interest income to reach LE 509.1 million due to an increase in interest from loans and due from banks despite a decline in the interest on its investments in treasury bills and bonds resulting of the low yields in the local treasury market . Yields on 91-day T-bills dropped from 9.76 per cent to 6.85 per cent.

Moreover and according to HC Securities , CAE witnessed an impressive advance in all non-interest items.

CAE's operating expenses increased by 16.8 per cent, a factor that was offset by a 17.8 per cent retreat in operating income. As a result,CAE's cost-to-income declined from 58.4 per cent 2006 to 49.1 per cent in 2007 .

Compiled by Sherine Abdel-Razek