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Egypt stocks soar on Telecoms dispute resolution Main index up over 2% after Global Telecom Holding announces deal with Algeria over disputed subsidiary Djezzy
News of a long-awaited telecoms deal in Algeria sent Egypt's main index soaring by over 2 percent on Monday to 8,269 points as daily turnover reached LE878.2 million in the first day of trading since last Thursday. Global Telecom Holding, previously known as Orascom Telecom, a 51.9 percent-owned subsidiary of giant Russian mobile operator Vimplecom, resolved a long-standing dispute with the government of Algeria by selling it 51 percent of its subsidiary Orascom Telecom Algeria, also known as Djezzy. The Algerian government has been trying to nationalize Djezzy since 2010, accusing it of tax evasion and subjecting it to foreign exchange and import restrictions, which will be lifted once Djezzy pays a LE9 billion ($1.3 billion) fine and writes off LE4.9 billion ($700 million) of tax receivables from its 2013 financial report. Global Telecom Holding saw its share price leap 9.23 percent to trade at LE4.97 a share. The news buoyed the rest of the sector, with Orascom Telecom Media and Technology Holding rising 7.38 percent to LE1.31 a share, and fixed-line operator Telecom Egypt gaining 1.28 percent to trade at LE15.78 a share. The real estate sector was also up, with Six of October Development and Investment Company (SODIC) seeing its share price rise 0.67 percent to LE27.21, despite the company announcing a 447.1 million loss in 2013 on Monday. "Operationally we had a very strong 2013 but that is not reflected in the actual figures reported because of these one-off items," managing director Ahmed Badrawi told Reuters on Tuesday. According to Reuters, these one-off items included a non-cash charge of LE478 million related to the firm's investments in war-torn Syria. Before accounting for the one-off items, SODIC's normalised net income reached LE229 million, the firm said. "In this case SODIC's results for 2013 are not as important in investors' minds as its future prospects, which are bright considering the company's upcoming Eastown project." Last week, the company agreed to pay LE900 million over seven years to Egypt's government, putting an end to a dispute regarding the valuation of 860 thousand square meters on which its Eastown project will stand. Real estate companies also made gains on Monday, with TMG Holding rising 2.06 percent to trade at LE8.91 a share and Palm Hills Development Company climbing LE3.27 to trade at LE4.10 a share. Market bellwether Commercial International Bank slid 0.51 percent to close at LE37.10 a share. Egyptian investors were the main net-buyers, to the tune of LE33.1 million, while Arab investors were the primary net-sellers for LE24.3 million. The broader EGX70 index rose 1.37 percent. http://english.ahram.org.eg/News/99607.aspx
