A new regulation lifting the ceiling of price changes on 100 active shares in the Cairo and Alexandria Stock Exchange (CASE) came as a surprise to the market in the week ending 14 June. The volume of transactions was comparatively weak, with a wait-and-see mood prevailing in the market to see the repercussions of the decision. This cannot be better seen than in the decline in the market turnover to LE4.6 billion compared to LE13.8 billion in the previous week. The CASE30 gained a marginal 0.4 per cent through the week. Some positive economic news made up for the decline in the market's indicators. The most important is the retreat in the annual inflation rate to 10.5 per cent during May 2007 compared to 11.7 per cent in April 2007. Suez Canal Revenues amounted to $1.8 billion during the period of January-May 2007, up from $1.5 billion in the same period in 2006. Another source of foreign currency, the tourism sector, also witnessed an improvement. The number of tourists visiting Egypt in 2006 reached 9.1 million, spending around $9.8 billion. AL-WATANY BANK OF EGYPT (WBE): The bank has informed CASE that none of the banks expressing interest in buying a majority stake in WBE has started the due diligence process yet. It also denied press reports about the CBE's approval of three or five banks to start a due diligence process. The bank is currently capitalising on the positive outcomes of a change in its administrative structure five years ago that helped rid its loan portfolio of non- performing loans. It is expanding in retail and Islamic banking activities. Last month, it launched the first phase of its mortgage finance programme with LE100 million in investments. The bank is currently financing ready units only, and it lends an equivalent of 35 months' gross income of the borrower, with a payment period of 10 to 15 years at an interest rate of 13.5 per cent. ORASCOM TELECOM HOLDING (OTH): The leading mobile phone operator said that it is no longer in negotiations to purchase the 38 per cent stake held by Telecom Italia in Brazil Telecom Participacoes. While an OTH release did not mention reasons for the new development, it stated that OTH will continue to look to expanding in untapped emerging countries with large markets and high growth potential. OTH purchased 1.06 million of its treasury shares by 14 June at a price range of LE69.9-LE73.9. OTH previously announced its intention to purchase 37.7 million shares during the period 29 May-29 June. OLYMPIC GROUP (OG): The company has signed a partnership agreement with the Sweden-based home appliances manufacturer Electrolux. According to the agreement, OG will manufacture and distribute Electrolux, Zanussi and AEG brands in Egypt beginning January 2008. This is not the first cooperation between the two companies. OG currently has a 63 per cent market share in automatic washing machines in Egypt through its 25-year long licence agreement with Zanussi. In another development, OG's subsidiary Namaa for Real Estate Investments purchased a 6,800 metre parcel of land in New Cairo from Allam Sons for LE14.96 million. MOBINIL: The mobile operator got approval from Banque Misr for a loan of LE700 million to be used in updating its network and finance future expansion. The loan is to be repaid over three months at an interest rate of 10 per cent. It is rumoured that the company is also planning to seek another loan for LE2.3 billion. In news related to the company's competition in the local mobile market, it seems that the introduction of mobile number portability (MNP) is to be postponed this year due to technical problems. The MNP technique gives subscribers in the three mobile networks currently working in Egypt the right to move from one network to another while keeping the same number. NAEEM HOLDING COMPANY: The financial services company is augmenting its brokerage activity in Egypt by increasing its stake in its online brokerage subsidiary "Arabiya Online" from 49 per cent to 100 per cent for LE55 million. Contrary to reports, Naeem denied that it was participating in the establishment of a glass factory in Fayoum. The company stated that it is only acting as a financial consultant for the project. TELECOM EGYPT (TE): The sole fixed-line operator in Egypt is expanding its activities spectrum by tapping the 2G services market. TE announced that it is going to provide a 2G fixed-line service soon after the company constructs the necessary network infrastructure at the Smart Village. A 2G fixed line will allow its users several additional services including voice and video data along with IP network and broadband Internet. TE is trying to make use of its 44 per cent ownership in Vodafone Egypt, Egypt's second largest mobile network operator, to tap new activities. It was announced recently that a joint team from Vodafone Egypt and Telecom Egypt has come up with seven new mutual services, that combine land line phones and mobile phones and which will be provided through both companies. The new services are awaiting NTRA's approval. NASR CITY HOUSING COMPANY (NCHC): Belton Capital, which owns 30 per cent of NCHC, said it had received offers from a number of specialised groups in the field of investment and real estate development for possible cooperation agreements. The offers included purchasing large pieces of land, participating in land development, joining the company as a strategic investor or purchasing Belton's stake in the company. Belton is currently studying all of these offers. EFG-HERMES: The leading investment bank is to launch a $1 billion fund for investing in the Arab region, in participation with the US Harvard International Group. EFG-Hermes was hired by the Omani mortgage lender Alliance Housing Bank (AHB) to advise it on an offer by the Bank of Muscat to acquire AHB. The company has been expanding regionally in the last two years and currently has licences to pursue investment banking and brokerage activities in both Saudi Arabia and the UAE. Compiled by Sherine Abdel-Razek
