Markrt report
The market continued to slide for the third week, pushed by setbacks in international markets and panic selling by both international and local investors in the domestic Bourse. The market net average daily turnover during the week ending 23 August came in at LE834.8 million, 30 per cent lower than last week's average of LE1.2 billion. And the good balance of payment figures failed to offset the downward trend.
According to the Central Bank of Egypt's figures, Egypt's current account surplus increased during the year ending July 2007, to $2.7 billion, up from $1.8 billion in the previous fiscal year. The trade deficit rose from $12.8 billion in fiscal year 2005/2006 to $15.8 billion in FY2006/7, because of strong import growth, despite a sharp increase in non-oil exports. However, the strong net services income of $11.5 billion and remittance flows of $6.2 billion brought the current account into surplus. Net foreign direct investments showed strong growth, rising to $11 billion from $6.1 billion in FY2005/6.
ARAB INVESTMENT BANK, the state-owned financial entity, will not be up for sale any time soon in reaction to the uproar surrounding the sale of Banque du Caire. Four Arab and foreign banks previously received the Central Bank of Egypt's (CBE) preliminary approval to conduct due diligence, but the date to start was not determined. The bank has a paid in capital of LE186 million, which is far below CBE's LE500 million minimum capital requirement for banks to operate in Egypt.
ORASCOM TELECOM HOLDINGS (OTH) is currently in talks with the Kurdish Korek Telecom, which won Iraq's three mobile network licences last week, to buy OTH's Iraqna assets. Iraqna withdrew from the bid for the licences because at a price of $1.25 billion, in addition to 18 per cent profit sharing, the deal's feasibility was questioned.
Meanwhile, Hutchison Telecommunications International Limited (HTIL), 19.3 per cent owned by OTH, posted its net profits for the first half of 2007. This included the one-time gain of $8.87 billion from the sale of Indian operation Hutch Essar, plus net profits of around $1 billion. The company's earnings before interest rates, taxes, depreciation and amortisation (EBITDA) increased 15 per cent, mainly driven by Israel and Hong Kong's operations which partially offset the negative effects of start-up operations in Vietnam and Indonesia.
In another development, Bloomberg newswire announced that Blackstone Group, an American private equity fund, may buy a stake of up to 30 per cent in Wind, the Italian telecom operator owned by Weather Investments, which has a 50 per cent plus one golden share in OTH. Naguib Sawiris, chairman and CEO of Both Weather and OTH, is said to be considering selling 20-30 per cent of Wind to Blackstone for $1.2 billion.
SUEZ CEMENT, the leading local cement producer and exporter, acquired 47 per cent of the Kuwaiti Al-Helal Cement at a cost of around LE260 million. This increases Suez Cement's stake in Al-Helal Cement to 51 per cent, and comes as part of a regional expansion plan. Suez Cement and its subsidiaries corner 30 per cent of the grey cement market in Egypt, and more than 50 per cent of the white cement market. It owns five plants in Suez, Qattamiya, Torah, Helwan and Minya, with an overall annual capacity of 12 million tonnes of Clinker.
NATIONAL BANK FOR DEVELOPMENT (NDB) is inviting its shareholders to attend its general assembly meeting on 3 September, to discuss increasing the bank's paid-in capital to LE1 billion and authorised capital to LE2 billion. The meeting will also decide on renaming the bank Abu Dhabi Islamic Bank, Egypt, and elect a new board of directors. Abu Dhabi Islamic Bank and its parent company Emirates International Investment bought a controlling stake of 51 per cent in NDB at LE11 per share, putting the value of the entire bank at LE310 million.
AL-WATANY BANK OF EGYPT's (AWB) new shareholder, National Bank of Kuwait (NBK) which bought a 51 per cent stake of AWB last month, submitted an application to CBE seeking approval to issue a tender offer for the acquisition of the remaining 49 per cent. NBK paid $510 million for the 51 per cent stake.
Compiled by Sherine Abdel-Razek
Al-Ahram Weekly Online : Located at: http://weekly.ahram.org.eg/2007/860/ec4.htm