Market report

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A profit-taking spree pushed the market downwards during the first two trading sessions of the week, with investors trying to cash in on the profits they made on their holdings over the last two weeks. The market experienced an upward trend from mid-March up until the end of last week, with the CASE30 index gaining 14 per cent.

Highlights of the new state budget for financial year 2009/2010 were revealed with revenues expected to decline to LE213 billion, 26 per cent lower than last year. Expenditures will total LE322 billion, down 10 per cent, creating a budget deficit of LE109 billion. This would put the deficit at around 8.4 per cent of GDP, compared to 6.9 per cent the previous year. Increased spending is set to be channelled through to the fiscal stimulus plan.

On a more negative note, the government has stated it will not reduce the price of fuel oil for industries, despite its promise in January. The government cited an increase in international prices from $150 per tonne in December to $250 last month.

RASCOM DEVELOPMENT HOLDING (ODH): The company's revenues jumped by 40 per cent in 2008 to 586 million Swiss Francs, driven by strong growth in all business segments. The increase was a result of higher-than-expected revenues from the Cove project in the UAE, due to the increase in delivered units. In all, some 2,939 units were delivered in 2008, versus 397 units in 2007 . Meanwhile, El Gouna, the company's resort on the Red Sea, enjoyed an average occupancy rate of 84 per cent in 2008, similar to the 83 per cent achieved in 2007, thus implying that last year was actually very healthy. Property selling prices in El-Gouna averaged CHF2,985 per square metre, a three per cent growth on 2007. However, Beltone Financial said it sees some uncertainty in 2009 with the slowdown in tourism in the group's main market -- Egypt.

HOUSING AND DEVELOPMENT BANK (HDB): The bank said it wants to increase its capital by issuing 45 million new shares to existing and new shareholders at a discount price. This represents the second of two phases, to increase the bank's capital, which the bank had announced in late 2007. Government entities, which currently own around 70 per cent of HDB's shares, will not participate in phase two of the capital increase. This may well dilute their stake in the bank to an estimated 40 per cent.

According to an HDB press release, capital increase was originally designed to raise the paid- in capital by around LE600 million to LE1.15 billion by issuing new shares in two main branches: one to existing shareholders and employees, and the second to new and existing shareholders. HDB has already carried out most of the first phase of the increase in mid-2008.

EGYPTIAN SUEZ CEMENT: The company posted a six per cent rise in net profit through 2008 to LE1.04 billion, thanks to an increase in retail prices. The company, Egypt's largest listed cement maker by market value, said in a statement it sent to the Stock Exchange that its market share declined from 30.6 in 2006 to 28.3 in 2008, and that its exports plummeted from 813,000 tonnes in 2006 to 113,000 tonnes in 2008. Last month, Egypt announced measures to control the retail price of cement, requiring producers to fix a maximum price at every stage of the distribution process.

Compiled by Sherine Abdel-Razek