Market report

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President Barack Obama's new plan to deal with the financial crisis was badly received in international markets, a reaction mirrored by local counterparts, with Egypt's market losing almost five per cent in the first two trading sessions of this week. The decline reversed the trend the market has followed for the first three weeks of the year, gaining 10 per cent over that period.

In other news, it appears that the market will be getting new listings soon. Sameh Fahmi, minister of petroleum, declared that the government would soon sell stakes in select public oil companies on the Egyptian Stock Exchange. Tharwa and Midor are expected to be amongst the public companies floated on the shares market.

On the macroeconomic level, the week witnessed the release of figures of tourism receipts. Revenues dropped 1.5 per cent to reach $3.23 billion in the three months from July to September 2009 compared with the same period a year earlier.

GB AUTO: There are currently intensive negotiations underway between the company and Korean Hyundai to manufacture two new high-class cars locally.

The company, which alone holds a 30 per cent market share, said it will launch an expansion plan in the first half of 2010 to increase its production capacity by 70 per cent, to reach 100,000 cars per year.

ORASCOM TELECOM HOLDING (OTH): The international telecommunications company obtained last week the approval of its lenders to postpone payment on some of its obligations due to problems related to a tax claim its Algerian affiliate has to pay. The waiver is conditional upon the successful completion of OTH's capital increase with a minimum take up of $700 million out of the $800 million proposed rights issue. The company's rights issue, to increase its capital, was pending the approval of its lenders. The rights issue proceeds will help OTH to strengthen its balance sheet and meet its debt obligations in light of the tax dispute in Algeria.

On another front, the company received positive news from its subsidiaries in both Bangladesh and Pakistan where subscriber numbers increased.

Subscribers in Mobilink, the Pakistan- based subsidiary, reached 30.48 million at the end of November, registering a one per cent gain compared to its level in September. Mobilink has widened its market share to 31.5 per cent from 31.3 per cent in September 2009.

On the other hand, the number of subscribers in Bangalink increased by 34 per cent in December compared to one year previously.

EASTERN COMPANY: Egypt's sole cigarette producer posted a 17 per cent increase in unaudited net income in the second quarter of 2009/2010 to reach LE254 million compared to the same period last year. On a quarterly basis, the company rebounded by 69 per cent.

EGYPTIAN IRON AND STEEL: The free floated stake in the company's equity increased to five per cent with the Holding Company for Metallurgical Industries selling 14.5 million shares in the company and three million shares in Egypt Aluminium in a move aiming to abide with new listing rules in the Egyptian Stock Exchange. The rules stipulate that five per cent of any listed company should be traded in the market. On another hand, the head of the holding company was quoted last week saying that the production of public steel companies dropped by 50 per cent due to import of low-priced Turkish steel.

ORASCOM CONSTRUCTION INDUSTRIES (OCI): The regional construction and fertilisers company signed an agreement with Morgan Stanley, a leading global financial services firm, to form a 50/50 joint venture to develop and invest in infrastructure-related assets across the Middle East and Africa regions.

"This proposed joint venture is positioned to capitalise on Morgan Stanley Infrastructure's investing expertise and its global reach as well as OCI's local and regional awareness of infrastructure needs," said Nassef Sawiris, CEO and chairman of OCI, in a company statement.

SUEZ CEMENT GROUP: Egypt's largest cement producer said it would maintain its prices for January at the December 2009 level of LE500 per tonne. The step came one day after it announced it would raise prices by LE22, a move that the Ministry of Trade and Industry reacted to by threatening to impose penalties on the company. Representatives of different local companies, including Lafarge Cement and Titan Cement are holding meetings with ministry officials to convince them to allow an increase in prices amid increased costs.

Compiled by

Sherine Abdel-Razek