Market report

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The market recovered from its severe plunge -- triggered by recent government financial resolutions -- thanks to the return of foreigners as buyers and the robust results posted by a handful of its main movers and shakers. Also, a sequence of positive news helped pull it out of its slump, including the World Bank's decision to extend a multi-billion dollar loan for the upgrading of the banking sector.

Egypt's balance of payments for the first nine months in fiscal year 2007/2008 recorded a surplus of $4.9 billion, up from $3.1 billion for the corresponding period of the previous year. The increase in surplus is on the back of an increase in foreign direct investments (FDIs) which reached $11.3 billion, up from $9 billion, as well as an increase in remittances and exports.

ORASCOM TELECOM HOLDING (OTH)'s tests of its network in North Korea were successful, making it possible for the company to launch mobile services there on time in the second half of 2008. Meanwhile, OTH Chairman Naguib Sawiris said the company is considering tapping the mobile market in Cuba after the lifting of restrictions on foreign ownership.

OTH has created a new subsidiary, Telecel Globe, to look into small-size acquisitions -- the first of which is likely to be Rwanda's third telecom licence.

In related news, OTH will acquire a short-term loan of $300 million to finance its local and international operations. The loan will be provided by four banks, namely Banque Misr, Citibank, National Bank of Abu Dhabi and Piraeus Bank Egypt.

EFG-HERMES, the leading investment bank, said that its merger negotiations with Bank Audi were put on ice due to political instability in Lebanon. The company posted a 39 per cent increase in its net income during the first quarter of 2008 to reach LE348.5 million. Operating revenues soared by 112 per cent, to reach LE469.9 million, due to a 117 per cent growth in its brokerage activities in Egypt, a 3.7 times increase in its UAE- based brokerage and the four-fold jump in yields of its asset management line of business.

In addition to Egypt, EFG currently has brokerage activities in Saudi Arabia, UAE and Oman.

ORASCOM DEVELOPMENT HOLDING (ODH) revealed plans to expand its activities in the budget housing sector in order to diversify its revenues. They include building two new economic housing towns, one in Egypt and another abroad, before the end of 2009.

The Egyptian town will be built on an area of 4-5 million square metres of land, but the location has not yet been decided. According to Reuters, the company plans to increase revenues from low-income housing to account for 10 per cent of its revenues by 2011.

MARIDIVE AND OIL SERVICES said the utilisation rate of its maritime facilities reached 95.36 per cent on 18 May 2008. The company recently received a new chip manufactures in China, in addition to increasing its rent rates by renewing contracts of some of its ships.

Maridive added that the French Gaz de France and NOSPCO to the list of companies it has agreements with. Meanwhile, the company signed a $133.6 million loan with seven banks to finance future expansions.

ARAFA HOLDING issued a press release assuring that recent economic decisions will have no impact on the company. The release explained that it works in a free zone and thus enjoys, and will continue to enjoy, a tax free status. Also, the company is not in an energy-intensive industry, so the increase in gas prices is not expected to have an effect on it.

The expected appreciation in the value of the pound against the dollar will not affect the company, since it is hedged and exports use a USD forward rate of LE5.88 to each dollar.

OLYMPIC GROUP posted a net profit of LE74.25 million in the first quarter of 2008, compared to LE49.08 in the same period last year. The income statement figures exclude Namaa and BTech, which were deconsolidated and reported as "available for sale investment" on the balance sheet ahead of their spin-off expected in the second half of this year.

Olympic is the largest player in the automatic washing machine market, with a market share of 55 per cent, after it became the exclusive distributor of Zanussi washing machines in January 2008 under a partnership agreement with Electrolux.

AL-EZZ STEEL REBARS was given a maximum period of 15 days by the CASE listing committee to send its consolidated and standalone audited financial statements for the year ending 31 May 2007. The committee also warned the company that trading on its stock will be suspended if it does not meet this deadline.

All this comes at a time when company chairman Ahmed Ezz is accused of monopolising the market.

Compiled by Sherine Abdel-Razek