Worries over Greece's possible default weighed on international markets, the contagion transferred to local markets. The EGX30 headed south for several sessions during last week, and during the first session of this week, before inching up on Monday with investors rushing to benefit from the low price of traded shares.
The recent Orascom deal also helped determine the market's direction, with vagueness over the deal with MTN negatively affecting its shares and the market as a whole.
ORASCOM TELECOM HOLDING (OTH): The international communication group took the limelight throughout the last two weeks.
The most striking headlines were the statements of Algerian officials that they would block the sale of Orascom's Algerian unit to MTN, the South African communications group, saying it is exercising its right under a law adopted last year to have first refusal on buying a controlling stake in any Algeria based company.
OTH's Djezzy unit is considered to be the main attraction in any MTN-OTH deal. With MTN seeking to expand beyond its core markets of Nigeria, South Africa and Iran, Djezzy, would give it a lucrative foothold in North Africa.
While analysts put Orascom's enterprise value -- a measure that takes into account a company's debt -- at $11-12.6 billion, the majority of the valuation lies with Djezzy. Djezzy accounted for almost 37 per cent of OTH's revenue last year.
On the other hand, market observers believe that Orascom's problems in Algeria are weighing down on Djezzy's value. The Cairo based brokerage Naeem valued the unit at a multiple of 5.5 times EBITDA (earnings before interest, taxes, depreciation and amortisation). Recent African telecom deals have valued companies at seven to eight times EBITDA.
Algiers last week urged Orascom to discuss Djezzy's situation. Naguib Sawiris, OTH's executive chairman, said he was seeking a meeting with Algerian authorities.
On another front, the Egyptian Financial Supervisory Authority (EFSA) said Monday that OTH has one week to disclose further details on the Mobinil deal reached with co-owner France Telecom.
An EFSA statement pinpointed a number of items that need more clarification in the deal, atop of which is on what basis was the $300 million settlement fee being paid to Orascom and an Orascom put option price calculated.
The effect of the deal of the management structure of Mobinil is another point of clarification EFSA is seeking.
Orascom and France Telecom last month finalised an agreement that ended years of legal battles over Mobinil. According to the deal, France Telecom would pay $300 million to Orascom in a settlement deal over ownership of Mobinil. It also gives OTH the right to sell to France Telecom only the former's shares in Mobinil for LE221.7 in 2012 and for LE248.5 in 2013.
EFSA four months ago approved an offer by France Telecom to buy Mobinil shares at LE245 -- an offer minorities were expected to accept.
ORASCOM DEVELOPMENT HOLDING (ODH): The company's economy housing unit, Orascom Housing Communities (OHC), said it is seeking to buy land in Luxor for a low-income housing project.
OHC is in talks to purchase a 120 feddan plot in the southern city of Luxor and another 560 feddans in the nearby village of Esna, Omar Elhitamy, managing director of the firm, told Reuters.
"There is a huge need and a huge opportunity for this kind of business," he said Wednesday, adding that the firm's flagship Haram City has 11,000 finished units and has sold 9,000 out of the 50-70,000-unit project.
The company revealed last week that it is building a LE2 billion low-income housing project in the southern province of Qena.
More ODH related news came earlier in the week with the company buying a 4.5 per cent stake in Egyptian Resorts under a plan to jointly develop resort property on the Red Sea.
ODH's subsidiary, Orascom Development and Management (ODM), signed a nine-year agreement with Egyptian Resorts (ERC) to develop 2.5 million square metres of ERC property around the existing Sahl Hasheesh resort.
A joint statement from the two companies said development would include a marina, more than 4,000 hotel rooms and 2,500 residential units, expected by the end of 2012.
ALEXANDRIA CEMENT: The stock exchange approved the company's LE2.45 billion rights issue scheduled to begin 19 May.
According to Reuters, the transaction will pave the way for Alexandria Cement's main shareholder, Greek cement maker Titan, to sell a 16 per cent stake in Alexandria to the International Finance Corporation (IFC) for 80 million Euros ($106.6 million).
Alexandria Cement has a free float of 11 per cent.
The company said in a 28 February letter to the exchange that it would use the proceeds of the rights issue to buy 95 per cent of another Egyptian cement maker, Beni Sweif Cement, which is also owned by Titan.
Alexandria Cement will pay Titan LE3.13 billion for the stake, which will increase Alexandria's total stake in Beni Sweif to 99.998 per cent.
Alexandria Cement will not pay Titan for the Beni Sweif shares in cash, but will book it as an outstanding debt to Titan, it said in the 28 February letter.