Market report

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The market maintained a positive feeling that was reflected in an increased appetite among individual investors through the first week of April, pushing the average daily turnover to around LE1 billion compared to almost half this figure or even less, just a month ago.

News that more than 20 banks were lowering interest rates on their Egyptian pound saving accounts and certificates of deposit, is giving the bourse a pat on the back, now that the yield on stock market investments might be more tempting than bank deposits.

The telecom sector has been making the news, attracting much attention and taking the lion's share in transactions. The National Telecommunications Regulatory Authority (NTRA) announced that it now set stipulations governing the use of GPS-enabled electronic devices, including mobile phones, cars and computers, after the Egyptian government permitted the use of the technology in the country.

However, the big bang for the telecom sector as well the market as a whole was the ruling giving France Telecom the right to buy Orascom Telecom's (OT) shares in the local mobile service company, MobiNil, with transactions on shares of both OT and MobiNil being halted on the day following the ruling due to vagueness of the terms of the deal and heavy buying on MobiNil. However, demand on the two companies slowed down Tuesday, as the effect of the deal on both companies was being evaluated.

On the macro-economic level, news through the last period shows the government is trying very hard to soothe the effect of the crisis on Egyptians as the cabinet decided to postpone the annual increase in electricity prices until the end of 2009, in light of slow economic growth. The government had been raising electricity prices progressively since 2004 reducing subsidies and charging higher consumption brackets more tariffs.

TELECOM EGYPT: The sole fixed line operator in Egypt established a new company in France with the purpose of the deployment of the TE North submarine cable, connecting Alexandria to Marseilles, instead of delegating the mission to a French company. The submarine would cost the company $125 million.

RAYA HOLDING: The company's revenues will benefit from the NTRA's approval of introducing the GPS technology as the ban on importing handsets with this option is lifted now. On a different note, Raya would hold both its annual general assembly (AGM) and extraordinary general assembly meetings on 21 April, to approve the financial statements for the year ending December 2008 and the distribution of a cash dividend of LE0.21 per share.

EL-SEWEDY CABLES: The largest cables manufacturer in the Middle East will start in July to operate the second phase of its Algerian factory, adding 8,000 tonnes per annum of high voltage cables to Sewedy's capacity. The factory's production of low voltage cables since its inception in 2008 was limited to 7,000 tonnes per annum. The cost of the second phase is $50 million.

SIXTH OF OCTOBER DEVELOPMENT AND INVESTMENT (SODIC): The real estate developer signed an agreement with the Bank of Alexandria (BA) to receive credit facilities of LE850 million. According to the terms of the agreement the BA will pay SODIC's contractors their instalments directly, which allows SODIC to utilise its generated cash flows from instalments by its clients more efficiently to speed up construction activity, and to deliver ahead of schedule, which in turn will speed up selling activity. CI Capital Holding commented on the news by saying the facility will not have a great positive impact, as "the size of the facility is not that huge compared to the size of SODIC's operations, where the credit line represents about four per cent of SODIC's main project, Alegria's total construction cost which amounts to LE2.1 billion."

Compiled by Sherine Abdel-Razek