Positive sentiment drove market transactions throughout the week of Egypt's first presidential elections, reports Sherine Abdel-Razek Politics drove the market last week and it headed north. The hesitation of investors was felt in the market on elections day as they held their breath fearing an intensification of the political tensions which grew throughout the pre-elections period. But the smooth voting process together with anticipation that Ahmed Nazif's reform minded government would remain in office helped the market to register record highs. "The elections went smoothly and investors were left with a predominately optimistic and feel-good view of the market," Prime Securities commented. The day which followed the elections witnessed nine separate stocks recording all time highs. Also, the CASE 30 index hit its highest level yet, reaching 5091.57 on Thursday. The financial services group, EFG-Hermes was not only the market's most actively traded stock but also secured an all time high price of LE47.04. This came amid news that EFG is planning to buy 325,000 local shares instead of 162,500 GDRs, as treasury stocks before September 18, 2005. Furthermore, rumours abounded that the company was considering further regional expansions into the Saudi Arabian market. National Société Générale Bank (NSGB) continued its rally which began with its acquisition of 70.51 per cent of Misr International Bank late last August. Last week, NSGB submitted a bid to buy 100 per cent of MIB's shares at LE43.2. According to the tender which expires today, NSGB must acquire at least 75 per cent of MIB. NSGB closed at LE64.56 per share. In other acquisition news, the banking sector was driven by the Egyptian American Bank (EAB). A short list of the bidding parties for the acquisition of the bank will be announced in one week. So far, 15 international banks have requested the Memorandum of Understanding (MOU), which includes the full details concerning EAB's offering. This includes American Express Holding and Société Générale Bank. EAB is 35 per cent owned by the state- run Bank of Alexandria and 25 per cent owned by American Express Bank, while the balance is free floated. In February 2005, EAB was included in the CASE 30 Index which traces the performance of the market's 30 most actively traded stocks. The privately-owned Arab African Bank(AAB) also received some positive recognition throughout the week. AAB was chosen as advisor for the privatisation deal of the 70.5 per cent publicly held stake in Misr Hotels-Hilton, which is 50 per cent owned by the Holding Company for Tourism and 20.5 per cent owned by public sector entities. Moreover, the Capital market Authority (CMA) granted the first marginal-trading license to the bank. Margin Trading, means buying securities by paying at least 50 per cent of their value and borrowing the remaining amount from banks licensed to carry out custody activities. The new activity was announced immediately before the appointment of the new heads for both the stock exchange and CMA. The telecom sector witnessed only modest performance, led by regional player, Orascom Telecom (OT), which picked up 2.3 per cent to close at LE571.2. Naguib Sawiris, the chairman of OT, announced that the loan required to finance his family's acquisition of Wind has been guaranteed by three top international banks. The banks which have guaranteed the loan are Deutsche Bank, ABN Amro, and San Paolo. He added that associated financial institutions are completely responsible for both promoting and rescheduling the debts of Wind, Italy's third largest mobile operator. Other companies within the Orascom Group fared well. Tourism sector favourite, OHD, was back in the limelight following the release of a 70 per cent increase in net profits over the first half of 2005. The company said it will issue its capital increase prospectus next week. OHD plans to issue new equities with a maximum value of LE300 million. The company has been involved in a series of share swapping deals which allow it to barter stakes of its equity with holdings in six hotels. The company gained 12.48 per cent by the end of the week to close at LE42.18. Orascom Construction Industries released its first half results, revealing a 57 per cent increase in profits, translating to LE789.7 million compared to its previous record of LE504.5 at this time last year. The market witnessed fairly active transactions recording a total week's turnover of LE1.89 billion. The local bond market's one week turnover came in at LE83.3 million, up from the previous week's turnover of LE81.2 million. However, this increase was not expected in light of the retreat in interest rates for the banking sector. The Central Bank of Egypt (CBE) has reduced the corridor rate by 0.5 basis points, thus the over night deposit rate is now nine per cent rather than the previous 9.5 per cent. Also, the overnight lending rate is now 11.5 per cent instead of the previous 12.5 per cent. This action will lead to a further discounting of the market interest rate during the coming period. Alexandria Mineral Oils Company, AMOC, is expected to be this and next week's star. Subscription in the company started on Tuesday with 17.22 million shares, representing 20 per cent of the company's equity. The shares will be offered for sale through two equal tranches, amounting to a respective 8.61 million shares. Subscription will remain open for a minimum of 10 days and a maximum of 30 days.
