Market report

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Both the year-end lull and repercussions of the Dubai crisis are overshadowing the Egyptian stock market. Although the market has recovered from its last week one-day loss of eight per cent, negative sentiment is still present, with some investors holding back in a wait and see approach, despite government statements assuring investors that the economic outlook in Egypt is sound. Meanwhile, a seasonal liquidation of portfolios before Christmas adds to the market's woes.

CITADEL CAPITAL: The leading private equity firm started trading its shares on the local stock exchange, posting a leap in the first trading session to reach LE13.8 amid increased demand from both individual and institutional investors.

The local investment bank, HC Securities, expected in a pre- listing report that shares would be trading in a range between LE11.71 and LE25.01.

Citadel, which manages $8.3 billion in investments across a range of sectors in the Middle East and Africa, says it has capital of LE3.31 billion divided into 661.6 million shares, giving the listed shares a par value of LE5, which means that the stock skyrocketed by 177 per cent on its debut in the market.

The company is planning for an IPO (initial public offering) whose size it said would be determined within a month.

THE EGYPTIAN COMPANY FOR MOBILE SERVICES (MOBINIL): The board of the leading mobile phone operator approved issuing fixed-rate, unsecured five-year bonds of up to LE1.5 billion. The loan is to be used to finance payments related to the company's 3G licence.

The interest rate on the issue has not been set and is expected to be announced next week. The company's chief finance officer, Khalid Ellaicy, told Reuters that it would be attractive because the issue will not be marketed to commercial banks.

The bonds, that are to be denominated in local currency, are to be listed and marketed in Egypt but will not exclude foreigners.

The company had to resort to issuing bonds instead of bank loans as the Central Bank of Egypt (CBE) has blocked it from accessing bank lending as it considers Mobinil part of one of its major shareholders, Orascom Telecom. Under Egyptian banking laws, banks are prohibited from lending one client more than 25 per cent of its total loan portfolio.

ORASCOM DEVELOPMENT HOLDING (ODH): The Swiss- based parent company of Orascom Hotels and Development acquired the approval of the local bourse to issue depository receipts in pounds to be listed in the Cairo Stock Exchange.

The move aims at facilitating transactions on the company's shares. As the locally listed shares are denominated in francs, local retail investors were not heavily buying in, as they have to go through a complicated process to pay for the shares. The company has its shares listed in both the Swiss and Egyptian stock exchanges.

Transactions on the company's Egypt-listed shares are suspended until 13 December after which they are converted to Egyptian depository receipts denominated in Egyptian pounds at a ratio of 20 receipts to one share.

ORASCOM TELECOM HOLDING: The company is paying the bill of Egyptian-Algerian tension related to two soccer matches in Cairo and Khartoum. After its Algerian subsidiary, Orascom Telecom Algeria (OTA), headquarters was attacked three weeks ago there are reports that the Algerian stake in the subsidiary was being targeted by foreign investors.

According to French newspapers, the French telecom company Vivendi, which is keen to expand in emerging markets, is eyeing OTA.

SIXTH OF OCTOBER COMPANY FOR DEVELOPMENT AND INVESTMENT (SODIC): The real estate developer is seeking a LE1 billion loan to finance its key Cairo projects over the next two and a half years. SODIC's chief executive, Maher Maksoud, told Reuters that while the company is working on getting syndicated debt it does not need to draw it down immediately.

SODIC posted a net loss of LE9.3 million in the third quarter of 2009-2010 compared to a net loss of LE17.9 million in the corresponding period of 2008.

Compiled by Sherine Abdel-Razek