The collapse of Orascom Telecom's deal with South African telecommunications giant MTN over the sale of its Algerian subsidiary overshadowed the market, which harboured high expectations for the blue chip on the tie up. Orascom Telecom (OT) has the second largest weighing on the index, which explains the impact its news has on the market. On the macroeconomic level, Minister of Investment Mahmoud Mohieldin said that Egypt's economy might expand between five per cent and 5.5 per cent in the fiscal year that ends this month. Mohieldin also said that foreign direct investment (FDI) in Egypt hit $47.7 billion over the past five years. FDI in Egypt in the fiscal year 2004/2005 stood at $509 million, while it hit $3.9 billion in 2009/ 2010. SIXTH OF OCTOBER DEVELOPMENT AND INVESTMENT COMPANY (SODIC): The real estate developer expects to receive the land where it will establish its planned $37 million Nile Delta Mall within a month, finishing the project after a year and a half, in keeping with a government deadline to develop the site. SODIC, among a consortium that includes food industries giant Juhayna, won a tender last month to lease 63,000 square metres of land in Mansoura governorate for 50 years. SODIC expects to earn a return of 20 per cent or more on the project, according to Chief Business Development Officer Ahmed Demerdash Badrawi. "Our initial discussions with retailers reveal they are desperate for opportunities to have a foothold in Mansoura and other secondary cities," Reuters reported him saying. Meanwhile, the company said it is negotiating loans with Egyptian banks that will raise its total debt to over LE1 billion over the next few years, up from around LE85 million now. PIRAEUS BANK EGYPT: The bank that is 96 per cent owned by the Greek Piraeus Bank will increase its capital by 35 million Euros ($43 million) over a couple of months to expand its credit portfolio. Piraeus Bank also revealed a plan to increase its share of Egypt's banking sector to five per cent over the next 3-5 years from 1.3 per cent now. The bank's current loan portfolio is LE5 billion and it has LE9 billion worth of deposits. ORASCOM CONSTRUCTION INDUSTRIES (OCI): The leading construction/fertiliser producer group said its 50 per cent owned subsidiary BESIX won a $265 million contract to build a Bahraini road. BESIX will implement the project through a joint venture in which it holds a 78 per cent stake with the balance held by the Bahraini Haji Hassan Company. In other positive news, the company said it would be bidding for the contract to build a highway linking the Saudi capital Riyadh with Abu Dhabi. ORASCOM TELECOM HOLDING (OTH): After the company announced that its tie-up negotiations with South African telecommunication group MTN collapsed, the company assured observers it has not offered money to the Algerian government to convince it to give up its right of first refusal on OTH's Algerian unit Djezzy. Algeria says that under a law enacted in 2009 it has the first right to bid on Djezzy. JUHAYNA FOOD INDUSTRIES: The company surprised the market twice in the last two weeks. The second surprise this week was the unexpected decline in its share value, by 10 per cent, on its debut in the market on Tuesday. This came only few days after the unexpected coverage rate of the company's initial public offering (IPO) that closed last Thursday. The 41 million shares offering raised purchasing orders 6.8 times the size of the offer. The IPO was the second tranche in a LE1.1 billion capital increase that the company undertook to expand its activities. A fire destroyed Juhayna's largest yoghurt factory in April. The company filed an insurance claim for LE299 million ($52.7 million), which it expects to cover the cost of rebuilding if approved in full. ORIENTAL WEAVERS (OW): The rug maker is in negotiations to raise prices on some of its contracts with European importers following the Euro's decline against other currencies this year. Euro-denominated sales account for around 15 per cent of OW's total sales. The company exports over half its goods to more than 100 countries, with about 20 per cent of its sales coming from Europe. It also controls 85 per cent of Egypt's carpet industry. The Euro shed over 15 per cent of its value this year. On another note, the company posted a net profit of LE97.081 million in the first quarter of 2010 compared to LE107.532 million in the same period of the previous year, representing a decline of 9.7 per cent. The decline was attributed by the company to the government's refusal to grant it an export subsidy in the period mentioned. PALM HILLS: The company's investment in Aswan governorate's Tut Amoun village raised controversy and made headlines through the week. It all started with a question submitted to parliament on whether the company, owned by a joint venture in which both the current housing minister, Ahmed El-Maghrabi, and the former transportation minister, Mohamed Mansour, have stakes, paid the true value of the land in question, in a hint that ministers have exploited their positions. Two days after the parliament session, President Mubarak decided that the sale of the land would be cancelled, saying that it would be better to offer the land to investors to lease for 49 years, instead of selling it. The company tried to clarify its position by running a quarter page ad explaining the history of the deal and saying it has already paid LE12 million as a downpayment for the deal which is valued at LE88 million. The company underlined that it has not received or registered the land due to disputes between Misr Aswan for Tourism, a publicly owned company, and another company that had previously concluded a deal with Misr Aswan for Tourism to buy the land. Compiled by Sherine Abdel-Razek
