Shortened Ramadan trading hours, a profit-taking spree by foreigners and a technical failure in streaming stock quote screens stripped the market of some its recent gains during the week ending 5 October. Transactions did not exceed the LE2 billion threshold, compared to LE3.5 billion the previous week. Trading on Tuesday was affected by a breakdown in equipment and Thursday was a national holiday, causing the CASE30 index to end the week 2.4 per cent lower at 6,292 points. Some analysts also cite a limited outflow of Gulf investments, following a decline in the Saudi Stock Market, as one of the reasons behind the drop. Foreigners were net sellers during the week, with a negative difference between their selling orders and buying transactions of LE182 million. The Cairo and Alexandria Stock Exchange (CASE) will soon have other sister exchanges. Companies with a minimum capital of LE250,000 can be traded in a new stock exchange for small and medium enterprises (SMEs), which will be launched in July, 2007. Companies listed in the SME stock exchange will not be asked to abide by the disclosure rules of CASE, and will enjoy the support of financial institutions to increase their size and later become listed in CASE. Moreover, an Egyptian commodity exchange will be opened by 2008 with three main commodities chosen so far, cotton, rice and cement. RAYA signed a contract with Vodafone Egypt (VFE) by which the latter bought 51 per cent of Raya Telecom, one of three units affiliated to Raya Holdings, for LE104 million. According to the contract, Raya Holding has the right to sell its remaining stake in Raya Telecom to VFE within the next two years at the same price. Raya Telecom will pursue its activity under the same name, but with a new board of directors will include three representatives from Raya Holding and three from VFE. Raya Holding and VFE announced that they will increase the paid-in capital of Raya Telecom from LE50 million to LE211.4 million. The capital increase aims at financing the company's plan to expand the scope of its services. It is rumoured that a consortium, including Raya Holdings, has won a bid to build the undersea international calls cable. The consortium includes a number of Egyptian and Arab companies, among which is the Saudi mobiLEphone operator Mobily. Meanwhile, the National Telecommunication Regulatory Authority (NTRA) is still studying offers submitted by three international companies, including French Alcatel, to provide the equipment needed to build the cable. EASTERN TOBACCO's shareholders, attending last week's General Assembly, decided to increase to LE10 the cash dividend distributed on each of its shares for fiscal year 2005/2006. This is up from the LE9.5 proposed by the company's board. With the company closing last week's trading at LE300, the dividend represents a yield of 3.3 per cent and is 11.1 per cent higher than last year's dividend of LE9. The company's net profit during the fiscal year reached LE3.5 billion. Eastern Tobacco also announced that it will launch a new product by the end of Ramadan, but did not give further details. TELECOM EGYPT (TE), Egypt's fixed line monopoly, expressed interest in buying more shares of Vodafone Egypt (VFE), should the latter want to sell. TE has just concluded a LE5.6 billion acquisition of 24 per cent of VFE, raising its stake in Egypt's second largest mobile phone operator to 49 per cent. The company has already finalised an agreement with a number of local and international banks to provide it with a LE4 billion syndicated loan to finance the purchase of the new stake. TE's Chairman Akil Beshir said last week that another future plan is to seek other investment opportunities in the region, including the purchase of Saudi Arabia's second fixed-line licence. BANK OF ALEXANDRIA (BOA)'s three- year restructuring plan cost LE11 billion. This includes full coverage of the bank's non- performing loans portfolio, in preparation for its pending privatisation. The government paid LE6.9 billion out of the total cost, and the rest was covered by the sale of BOA's stakes in joint venture banks and companies. In related news, the Ministry of Investment revealed that proceeds from the sale of BOA will be allocated to restructure Banque Misr, Banque du Caire and the National Bank of Egypt. The deadline for submitting the final offers for buying Egypt's fourth smallest state-owned bank is 16 October. Compiled by Sherine Abdel-Razek
