In spite of a selling spree by Arab investors, the market recovered from its previous week's dive with its main CASE30 index gaining 1.9 per cent to close above the 7,500 level once again. Arabs were selling more in what was seen as a continuation of the previous week's transactions to realise capital gains in shares of certain sectors especially construction which recorded unprecedented increases during the past few weeks. The recovery was energised by non-Arab buying orders pushing the market's overall turnover during the week ending 24 April to LE6.9 billion. The positive financial results for the first quarter of companies across the board also gave the market a boost. There was encouraging macro-economic news: Egypt's economy grew by 7.4 per cent during the third quarter of fiscal year 2006/2007 compared to 7.2 per cent in the second quarter. AL-WATANY BANK OF EGYPT (WBE): Five international and regional banks submitted requests for the Central Bank of Egypt to carry out a due diligence exercise for WBE as a prerequisite to submission of their financial and technical bids. The five banks include two Greek banks: the National Bank of Greece and the Euro Bank EFG, both of which aim at financing trade between Europe and Egypt. The list also includes the UAE- based Mashreq Bank, the National Bank of Kuwait and the Jordanian Arab Bank. Four out of the five, excluding the National Bank of Greece, were competing last year to buy a majority stake in the Bank of Alexandria which sold 80 per cent of its shares to the Italian Sanpaolo. The WBE was established mainly for SMEs. It has a paid-in capital of LE750 million and is privately owned with only five per cent held by state-owned banks. PAINT AND CHEMICAL INDUSTRIES (Pachin): The majority shareholders of the company declined to meet the 24 May deadline which marks the expiry of the tender offer submitted by Middle East Paints Company (MEPC) to acquire a 100 per cent stake of the company at LE58 per share. MEPC said that only 1,012,270 shares, representing five per cent of the company's capital, were offered by 23 May. This means that MEPC will not buy any shares, as the tender offer stipulated that a minimum of 51 per cent of Pachin shares was required to complete the deal. The offer was the second that MEPC submitted as the first offer came at LE54 and was rejected by PACHIN's parent company, the Holding Company for Chemical Industries, which found it too low. The LE58 offer was rejected for the same reason. The Holding Company owns 40 per cent of PACHIN's shares. PACHIN is Egypt's leading paints producer and last year acquired all rights, title and ownership related to the trademarks of the popular brands Saniton, Syntal, Dyroton and Safir, for use in Egypt, Libya, Sudan, Ethiopia and Somalia, which are PACHIN's main export markets. ORASCOM TELECOM HOLDING (OTH): Weather Investments which had a majority stake of 51 per cent of OTH and is owned by OTH's founder Naguib Sawiris is planning to increase its stake in Greece's third largest mobile network operator Tim Hellas from 50 to 100 per cent for 150 million euros. However, according to HC Securities, any agreement on Hellas will not take place before the Greek elections, to be held by March 2008. On a related note, Sawiris revealed a plan to float up to 25 per cent of Weather on the Milan stock exchange by early next year, with the aim of bringing in more than $2 billion. Weather owns 100 per cent of Italy's second largest mobile operator, Wind. SIXTH OF OCTOBER FOR INVESTMENT AND DEVELOPMENT COMPANY (SODIC): The company's first quarter profits showed a significant improvement in its finances posting a net profit of LE50.1 million compared to a net loss of LE2.1 million in the first quarter of 2006. The turnaround came on the back of a 30-fold jump in sales to LE107.8 million. The consolidated results also include those of SODIC's 51 per cent owned subsidiary SODIC Real Estate Services. The revenues do not include the LE86 million sales figure that was not yet recorded in its books as the company follows the "revenue upon delivery" accounting principle. The results offset the negative effect that the failure of SODIC's share swap deal with Palm Hills has created. Had it been finalized the deal would have added to SODIC's land bank and it would have benefited from Palm Hills tax exemption. SODIC has to pay taxes starting 2008. AL-SEWEDY CABLES: The company realised a net profit of LE146 million on sales of LE2 billion in the first quarter of 2007 which are 96.8 and 53.3 per cent higher respectively than last year's figures. The obvious improvement can be attributed to an expansionary plan that consolidated the results by adding revenues and profits of new subsidiaries. The company has activities in Syria, Libya, Sudan and Zambia. Its extraordinary general meeting convened on 17 April decided to split the manufacturing and investment lines of the business for tax purposes. EFG-HERMES: Egypt's leading investment bank is expanding regionally. The company signed a contract to establish a new investment-banking firm in Qatar under the name Financial Group- Hermes Qatar Limited Co, and will undertake asset management, investment banking, and brokerage activities. The new company's paid-in capital is $37 million. EFG-Hermes and its subsidiaries will have a 51 per cent stake in the new project while a local Qatari company will own a 49 per cent stake. EFG-Hermes has announced it applied for brokerage and investment banking licences in Oman and Bahrain. EFG now has subsidiaries in Dubai and Saudi Arabia. Compiled by Sherine Abdel-Razek
