Mixed macro-economic data produced contradictory effects in the market which ended the week in a positive manner. CASE30, the most actively traded companies' index gained 2.95 points on an overall turnover of LE3.9 billion. Standard & Poor's, in maintaining its long- term sovereign credit for the Egyptian market, gave the economy some much-needed support. In addition, newly released data suggested that Egypt's macro-economic situation was improving. Egyptian exports, petroleum and non- petroleum, are up. However, inflation figures offset some of this good news as inflation rose 11.8 per cent when compared to last year and 2.7 per cent month-on-month in October 2006. Analysts fear that this might convince the Central Bank of Egypt to increase interest rates again next week during its monetary policy committee (MPC) meeting. In its November meeting, the MPC increased the overnight lending and deposit rates by 0.5 per cent to 8.5 and 10.5 respectively. News about EFG-Hermes merger plans with the Commercial International Bank and the listing of Naeem Holding together with a revival of the Saudi capital market gave the local stock exchange a welcome fillip at the end of the week. ORASCOM HOTELS AND DEVELOPMENT (OHD) joined forces with Beltone Investments, Beltone Capital and Arab Cotton Ginning (ACGC) to submit a tender offer to purchase 100 per cent, or 16 million shares, of Nasr City Housing for LE90 per share. According to OHD, Nasr City will be purchased, restructured and resold. OHD said it will withdraw its offer if it is required to pay more than LE90 per share. OHD had previously offered to buy a stake in Heliopolis Housing Company but withdrew its offer after the company demanded that it raise the offer price. SIDI KRIR PETROCHEMICALS (Sidpec): The company initiated plans to set up a new plant to produce butadiene, an industrial chemical used in the production of synthetic rubber. The plant, the first of its kind in Egypt, will be established with total investments of $40 million and an annual capacity of 24,000 tonnes. A senior official from Sidpec said the cost of the new plant will be financed through the company's resources and will bring an end to importing butadiene and synthetic rubber from the international market. Some of the products made will also be sold to the export market. In addition, Sidpec also plans to set up a plant to produce materials used in the production of natural gas pipelines at a total cost of $25 million. It is currently in negotiations with the Arab Industrialisation Authority, the largest importer of these materials, to buy any materials produced, rather than importing them from abroad. Sidpec's net sales over the first nine months of 2006 surged to LE1.39 billion with a net profit of LE724 million, compared with LE582 million on the corresponding period of last year. NAEEM HOLDING: The financial services company was listed in the Cairo and Alexandria Stock exchange last week. The company was established as an Egyptian joint- stock company in 2006 with an authorised share capital of $600 million and received the Capital Market Authority's (CMA) approval to be listed last month. Naeem Holding is predominantly owned by a group of Saudi, Egyptian, Qatari and Kuwaiti investors. Following the listing, 60 per cent of the company's share capital will be floated. The company has produced a lot of interest in the market with its shares being traded and helping to boost transactions on the two trading days after its listing. The company has a paid-in capital of $240 million distributed over 240 million shares at a value of $1 per share. Naeem Holding is an investment bank offering a full range of financial services including brokerage, portfolio and fund management, corporate finance, and private equity. The company is also planning to enter into the mortgage market within few months in cooperation with international consultancies. According to a company press release, as of June 2006, Naeem Holding manages approximately $2 billion of assets within its various lines of business. With the capital raised through last week's floatation, the company plans to expand its operations across the region and launch a new range of services in the coming 12-18 months. Abdel-Rahman Al-Husseini, the company's chairman, said, "this listing is a significant move to provide liquidity to our stock and enhance our shareholder value. We have taken the necessary steps with the CMA to ensure full compliance with local listing requirements and have already developed a Cairo-based investor relations team." ORASCOM TELECOM HOLDING (OTH): The regional GSM operator acquired an additional 1.21 per cent stake in its Algerian subsidiary Orascom Telecom Algeria (OTA) for $61 million. The move raised the OTH's holding in the subsidiary to 96.81 per cent. This follows an announcement on 27 October 2006, that OTH signed an agreement with Emirates International Investment Company (EIIC) to purchase the latter's 7.9 per cent stake in OTA for $399 million. OTA represented 35.2 per cent of OTH's overall operating revenues in the first nine months of 2006. OTA's subscriber base numbered about 10 million in the first nine month of 2006 securing it a market share of 64.7 per cent. OTH GSM operations are divided among six countries: Algeria, Pakistan, Egypt, Iraq, Tunisia, and Bangladesh. Algeria and Pakistan are OTH's two most important operations, representing 55 per cent of its subscribers' base and 65.7 per cent of its GSM revenues. NATIONAL SOCIETE GENERALE BANK (NSGB) completed its merger with Misr International Bank (MIBank) thus becoming Egypt's largest private sector bank in terms of deposits value, with a market share of five per cent. MIBank's pension fund, with a deficit amounting to around LE620 million, will be liquidated due to the merger. The coverage ratio for the new entity's non- performing loans is estimated at 80 per cent. After merging with MIBank, NSGB plans to open 19 new branches before the end of 2007, bringing its total number of branches to 112. PIRAEUS BANK EGYPT: Greece's Piraeus Bank raised its stake in Piraeus Bank Egypt, its subsidiary, by 1.9 per cent to 95.3 per cent by buying shares held by Libya's Arab Company. The Greece-based parent bank paid LE18 million ($3.1 million) to increase its stake, bringing the value of its current holding at LE477 million. The Libyan company previously sold 5.5 per cent of the bank to Piraeus Bank for $9.4 million on 2 July 2006. Compiled by Sherine Abdel-Razek
