Market report

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The market received the New Year with optimism reflected in EGX30 upward movements as well as the relatively high value of transactions. The first three trading sessions of the year witnessed the market ending in the green to close Tuesday's session at 6420 points, or 3.41 per cent higher than its level on the last trading day of 2009.

The week witnessed Egypt's upper house of parliament, the Shura Council, giving the green light to the introduction of a new economic stimulus package, the third, totalling LE11.2 billion. This brings the value of packages approved by the government and injected into the local economy to hedge against the repercussions of the global financial crisis to LE34.2 billion.

ORASCOM TELECOM HOLDING (OTH) filed an appeal on Tuesday against the Egyptian Financial Supervisory Authority (EFSA) decision to approve France Telecom's bid to buy all of mobile operator Mobinil's shares.

This came as the last episode of the Orascom-France Telecom saga over the ownership of Mobinil, Egypt's largest mobile network operator by subscribers.

The move followed EFSA Grievances Committee's rejection on Saturday of a request by Orascom that the regulator scrap an earlier decision to approve the France Telecom purchase, a decision that Ziad Bahaaeddin, head of EFSA said shows Egypt is prepared to protect minority interests.

A France Telecom subsidiary offered to buy all Mobinil's outstanding shares for LE245 each beginning on 15 December and ending 14 January. The Egyptian regulator rejected three previous offers by the French company to buy the minority stake in Mobinil. The prices offered in the earlier rounds were LE187 pounds, LE237 and LE230, all below the price of the arbitration ruling.

Orascom argued that France Telecom should have offered LE273 for the shares, equivalent to a price set by an arbitration court in April for Mobinil shares held by Orascom through a holding company.

On another front, Orascom sought an extra LE5 billion in capital increase from its shareholders to cover tax obligations on its Algerian unit, Djezzy.

Orascom runs mobile phone operations from North Africa to North Korea, and earlier this month won approval in Canada to go ahead with a start-up wireless operation called Globalive, in which it owns an indirect stake.

TELECOM EGYPT: Egypt's fixed line monopoly bought the remaining 4.95 per cent of shares in its Internet services unit TE Data from three Egyptian banks, taking its ownership to 100 per cent.

"We expect the importance of this segment to grow further and, as such, have taken advantage of the opportunity to establish full ownership of the business," Telecom Egypt's CEO Tareq Tantawi said in a statement.

According to the statement, TE Data's ADSL subscriber base grew 68 per cent to 572,000 at the end of September 2009 compared to the same period a year earlier. The company has a 61 per cent share in Egypt's broadband market.

ORASCOM HOTELS AND DEVELOPMENT (ORHD): The number of banks participating in the company's loan reached 10, led by both the National Bank of Egypt and Banque Misr. The loan will be directed to pay part of the company's short-term needs and the rest will finance expansions in El-Gouna and Taba areas, as it aims to establish new hotels, and develop and maintain current projects.

The loan contract is to be signed in days and it is worth LE850 million.

The combined stake of the National Bank of Egypt, Banque Misr and Banque du Caire represents 41 per cent of total loans, and the liquidity will be available to the company as soon as the final contract is signed.

The loan's duration lasts for seven years, including a two-year grace period.

EGYPTIAN COMPANY FOR MOBILE SERVICES (MOBINIL): The company said it is to pay a LE750 million instalment for acquiring a third-generation, or 3G, radio spectrum before the end of January.

The company has just acquired the approval of the Egyptian Financial Supervisory Authority for issuing LE1.5 billion bonds over five years. The bonds issue is divided into two tranches: the first will be sold through a private placement and values LE1.4 billion, while the other tranche will be worth LE100,000 and will be allocated for public offering.

The bonds' fixed annual yield hits 12.25 per cent payable once every six month. EFG-Hermes is the sole underwriter.

EGYPTIAN FINANCIAL GROUP HERMES (EFG-HERMES): In addition to being the sole underwriter in Mobinil's upcoming bond issue, the leading investment bank had another important development with the International Finance Corporation (IFC) saying it is considering giving it a long-term loan that ranges from $100 million to $120 million.

The final decision concerning the loan is scheduled for March, and if approved the loan will be the third given to EFG- Hermes to finance expansion plans in Egypt and the Middle East and North Africa region.

The IFC is aiming through the loan to boost equities markets and increase capital flows in the region. Locally, more attractive investment opportunities will emerge.

Compiled by Sherine Abdel-Razek