Market report

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Foreign selling and pessimistic expectations of results for the fourth quarter for listed companies are dragging the market downwards to reach new lows. CASE30 maintained a downward trend for nine successive sessions to be interrupted by a meager 0.67 per cent increase on Monday¹s transactions, closing at 3,669 points, which is 20.2 per cent lower than its level at the start of 2009.

The Egyptian Stock Exchange Index Committee meanwhile replaced six of its constituents with six new companies. The newly added companies are: International Agricultural Products, Egypt Transport (Egytrans), Maridive and Oil Services, Olympic Group, Pioneers Holding and Naeem Holding.

On the macroeconomic front Suez Canal revenues were up 21 per cent in the first quarter of 2008/2009, as compared to the previous quarter. However, according to local investment bank Beltone Financial, with the new challenge of growing piracy since mid-November 2008 and its associated risks on the flow of vessels in the Suez Canal, Êthere are more negative surprises hidden, reinforced by the declining month on month growth in revenues of 6.9 per cent, 0.4 per cent and 10.2 per cent in September, October and November 2008, respectively.Ë

ORASCOM TELECOM HOLDING (OTH): The number of subscribers to Mobilink, the Pakistani subsidiary of OTH, showed a nine per cent drop to reach 28.48 million in 2008. This shows 2.9 million ended their contracts during the fourth quarter of 2008, reducing Mobilink's market share to 31.7 per cent compared to 34.8 per cent in the third quarter. CI Capital, a local investment bank, attributed the drop to a new churn policy applied to inactive subscribers, together with the difficult economic situation in Pakistan. CI said that the decline in subscribers raises concerns on growth in emerging markets in general, and confirms its previously released negative outlook on OTH's Asian subsidiaries in Bangladesh and Pakistan. It expected OTH's revenues for 2008 as a whole would be five per cent lower than in 2007.

Meanwhile LinkdotNet, the Internet service provider at OTH, expressed interest in applying for WiMax licences once they are offered by the National Telecommunications Regulatory Authority (NTRA). The NTRA stated that the studies on the issue have not yet been finalised, affirming that the timeframe within which WiMax licences will be offered will not be announced before the technological side of the operation is settled.

ORASCOM CONSTRUCTION INDUSTRIES (OCI): The Belgian Besix Group, 50 per cent owned by OCI, was awarded a $740 million contract to build the Doha Convention Centre and Tower in Qatar in a joint venture with the Qatari Midmac Contracting. Besix's share in the contract is $370 million, while its scope of work will include all structural, architectural, mechanical, electrical and plumbing works for the convention centre and its two-level basement, as well as the structural works for the retail space and its three- level basement and all the foundation works for the 550 metre-high main tower. The project, owned by Qatari Diar, is planned to be completed by March 2011.

OLYMPIC GROUP (OG): The group sent a communiqué to the Stock Exchange stating it did not acquire any treasury shares under its previously announced buyback programme of three million shares, during the buyback period from 18 December 2008 through 17 January 2009. Company sources were quoted in local press as saying that OG preferred not to buy back any treasury shares amid the prevailing negative market sentiment. Furthermore, the company will not renew the programme in the meantime.

MENA TOURISTIC AND REAL ESTATE INVESTMENT: The company launched the construction of the final phase of the Jasmine Residence project in Juba, Sudan in partnership with the Sudanese Investment Fund. The project comprises about 500 villas with a total investment of about LE700 million.

ORASCOM DEVELOPMENT HOLDING (ODH): The tourism and hotel group sent a release to the Egyptian Exchange stating that SOS Holding, which is a major shareholder in ODH, has purchased 10,000 company shares through the Swiss Stock Exchange at an average price of 28.5 Swiss Francs.

EZZ STEEL: The company denied press reports that it had called for imposing protective fees on steel imports. The local steel market received a shipment of 100,000 tonnes of imported steel from Turkey, Ukraine, Russia, Spain and Belgium by large local steel producers. Experts believe that this will result in a reduction of at least LE150 per tonne in the price of local steel to hover at around LE3,800.

Compiled by Sherine Abdel-Razek