Market report

---

Fears of the effect of the 6 April general strike seem to be fading, as mirrored by the increased activity in the stock market. The market's main index, CASE30, touched the 11,700 points threshold during the week ending on 10 April, registering a 2.3 per cent increase from the previous week. The overall market turnover through the trading week came at LE14 billion.

This came despite the government's release of inflation figures for March which showed an annual increase in prices of 14.4 per cent in March compared to the same month last year -- marking its highest level in three years. CPI stood at 12.1 per cent in February and 10.5 per cent in January.

On a positive note, Suez Canal revenues rose to $417 million in March compared $352.6 million a year earlier. The number of vessels passing through the canal in March rose to 1,699 from 1,667 last year. Revenues in 2007 as a whole leapt to a record $4.6 billion from $3.8 billion in 2006, on the back of a surge in Asian-European trade and reduced traffic in the Panama Canal due to repairs there.

Starting this month, the transit fees through the Suez canal will be raised by 7.1 per cent, this is compared to the less aggressive three per cent annual increases in 2006 and 2007.

Another positive indicator was that Egypt's net foreign reserves climbed to $33.7 billion at the end of March 2008. The sum of reserves rose by $4.4 billion, or 15 per cent, between June 2007 and February 2008 to reach $32.9 billion by the end of February, covering eight months of the country's imports.

EGYPTIAN COMPANY FOR MOBILE SERVICES (MOBINIL) is attempting to attract more subscribers by slashing tariffs on all its pre-paid and post-paid calls to LE0.2 per minute. Under the new tariffs, MobiNil subscribers calling other MobiNil numbers will pay 33-56 per cent less, according to the calling schemes they are subscribed to.

The move comes only one week after the NTRA introduced mobile number portability, namely the possibility of moving among different mobile networks while keeping the same number. MobiNil subscribers reached just over 15 million by the end of 2007, capturing a 63 per cent increase compared to the end of 2006.

Last week, the mobile operator released its 2007 consolidated results, reporting net revenues of LE8.2 million, a 29 per cent rise over the same period last year. The company's net profits increased by 20 per cent over the same period last year, reaching LE1.824 billion.

Commenting on the results, the company's CEO Alex Shalaby said, "this success is a result of a series of consecutive offers made throughout the past two years and continued in 2007. These offers resulted in increasing the full year average usage per user to reach 132 minutes/month, representing an increase of 11 per cent over the same period last year."

EASTERN COMPANY (EC), Egypt's cigarette monopoly, sent a release to the Cairo and Alexandria Stock Exchange (CASE) saying that its parent company, the state-owned Holding Company for Chemical Industries, has not received any bids by investors seeking to buy its stake in EC.

Earlier this week, press reports said the Holding Company has received two offers to buy its 52.7 per cent stake in EC. According to the reports, US cigarette maker Philip Morris offered $1 billion for the stake, while the UK-based British American Tobacco (BAT) and the Kuwaiti Al-Kharafy Group had jointly offered $500 million. Philip Morris's offer put EC's share value at LE412, which is 11 per cent below the fair value calculated by EFG Hermes at LE465.

On another front, EC is inviting its shareholders to a General Assembly meeting on 30 April to discuss the company's FY08/ 09 financial budget.

BANK OF ALEXANDRIA (BA)'s initial public offering of a 15 per cent stake is postponed until the second half of 2008. The IPO was initially scheduled to take place in the last quarter of 2007, after Italy's Sanpaolo bought an 80 per cent stake in the bank from the government in October 2006. Sanpaolo has been restructuring BA to improve its financial performance prior to the offering.

BA was the first wholly state-owned bank to be privatised and will be followed by Banque du Caire in June 2008.

TALAAT MUSTAFA GROUP (TMG) made many headlines this week. It won an auction for Al-Sultana Malak plot land concession in Luxor, the payments of which will take place through annual instalments the first of which is LE6.8 million due in 2012. The annual payment will increase by five per cent each year through the 50-year duration of the concession.

While the company did not reveal how it would finance the acquisition, it revealed plans to use it to build a Four Seasons Hotel.

The group posted a 27 per cent increase in its net income for the first quarter of 2008 to reach LE425 million. TMG also announced earlier this month that sales of housing units in the quarter rose to LE3.2 billion, up from LE1.4 billion a year earlier.

ORASCOM TELECOM HOLDING (OTH), the global telecom giant, is considering offering mobile banking services to its subscribers in emerging markets, stated founder and Chairman Naguib Sawiris in an interview with the Financial Times (FT). The new company would be an Orascom subsidiary offering customers the chance to use their mobile phones to access banking services, including money transfers.

According to FT, Mobile money transfer services began in Asia but Vodafone Group launched mobile money transfer services in Kenya last year, and is rolling those out in other markets. Sawiris stated: "It's not something that I'm starting from scratch. I have the subscribers. They were just doing e-mail, [text message] and voice. Now I'm going to tell them you can use this for banking."

OT has more than 60 million mobile subscribers in Africa, Asia and the Middle East. Sawiris is also considering buying a Greek bank to help him to introduce mobile banking services to the European mobile operations of Weather Investments, his holding company.

EFG-HERMES, Egypt's leading investment bank, is expanding regionally after signing an agreement to acquire a 51 per cent stake in Vision Securities -- one of Oman's leading local brokers. The company already has activities in Dubai and Saudi Arabia.

Vision Securities has a market share of 9.2 per cent and realised $2.6 million in net profits through 2007. EFG-Hermes will pay $15.3 million for the stake and will assume management control over the business. The finalisation of the transaction is subject to the transfer of share ownership to EFG- Hermes in Oman and the relevant regulatory approvals.

The remaining 49 per cent will stay in the hands of Vision Investment Services, previously the majority owner.

Compiled by Sherine Abdel-Razek