Market observers are banking on the euphoria surrounding Egypt's hosting the World Economic Forum in Sharm El-Sheikh. This, coupled with sound first quarter results of the listed companies is expected to pull the market out of its current sliding trend. A handful of positive macro-economic indicators announced recently by the government is also expected to give the market a boost. The Central Bank of Egypt (CBE) has also announced that the country's foreign reserves stand at $23 billion -- its highest ever level. The week ending 17 May marked yet another bad week for stock market investors. Scores of the latter gathered in front of CASE headquarters last Monday to demonstrate their anger, after the CASE 30 lost 3.9 per cent of its value in only one day. The decline was blamed on an increasing foreign selling activity which weighed down on the market's supply side. Foreigners were net sellers for the second running week as their selling transactions exceeded buying orders by LE255 million. The week's total turnover reached LE3.87 billion. Other than trading-related news, the market witnessed some development during the week. The Capital Market Authority approved the issuing of LE500 million worth of securitised mortgage bonds in order to cover an underlying portfolio of LE891 million in receivables related to real estate financing. The bonds have a par value of LE1,000 each, and a seven-year maturity. CASE also has a new board, including 11 voting members headed by the bourse's chairman Maged Shawqi whose tenure was renewed for another year. Three experts from the financial sector have also joined the board, but do not have the right to vote. The development coincides with reports that new regulations will be issued, governing brokerage activities. According to the yet-to-be released regulations the minimum capital of brokerages will rise from the current LE250,000 to LE5 million. Companies have until March 2007 in order to meet the new rules. ORASCOM HOTELS AND DEVELOPMENT (OHD): The company has applied for the Moroccan authorities' approval of OHD setting up a project that will be similar to OHD's flagship El-Gouna resort, in the Moroccan district of Tantan. The move comes as a part of the company's regional and international expansion plans. OHD currently runs operations in Yemen, UAE, Sultanate of Oman, Mauritius and Switzerland. It is considered Egypt's biggest real estate developer in terms of assets, which stand at over 50 million square metres of land under management. The company has had a long track record of 16 years in the business, ever since it was first established in 1989 as an Egyptian joint-stock company for developing mega leisure real estate projects, in which it also provides the infrastructure and amenities. An HC securities report pointed out that OHD's strengths include the fact that its hotel business provides the cash flows needed to finance its real estate projects. Another advantage which OHD capitalises on is that the tourism industry receives strong backing by governments in the Middle East region. The company released its first quarter results for the year 2006. OHD witnessed a net profit of LE93.85 million, compared to LE180.9 million for all of 2005. Hotel revenues were accountable for 54 per cent of the company's sales figure. AL-EZZ STEEL REBARS: The CASE pricing committee disapproved Al-Ezz Steel Rebars acquisition of the 4.016 million shares which Al-Ezz Holding Company currently holds in Alexandria National Iron and Steel (ANSDK). The disapproval was attributed to the deal's non- compliance with conversion rules. These state that price of shares should be calculated according to the average price during the week which preceded the transaction. The deal's convergence rate was calculated according to the 24-month average price of both Al-Ezz Steel Rebars and ANSDK. Accordingly, the share price of the Al-Ezz was set at LE27 and that of ANSDK at LE600, as opposed to the week average rate of LE97 and LE1,066 respectively. EFG-HERMES HOLDING: The company maintained its position as the market's main mover and barometer. It saw a very volatile week, in which it also succeeded in attracting investors' attention, especially after Saudi Arabia granted it a licence to perform investment bank activities in the kingdom. EFG's was the week's most active stock, with a turnover of LE1.45 billion. The company saw buoyant transactions in the middle of the week. These capitalised on rumours that EFG had acquired a stake in Al-Watany Bank. EFG's denial of the rumour stripped it of these gains, however, and it ended the week in the red. The company lost 7.03 per cent, amidst news that its capital increase shares will soon be listed. It ended the week at LE46.54 per share. The sliding pattern of EFG shares has raised queries on the part of investors, especially given that the company had registered an impressive 400 per cent increase in its net profits during the first quarter of fiscal year 2006. TELECOM EGYPT had a turnover of LE104.82 million, with its share price declining to close at LE13.73. The shares ignored the growth rate recorded by its profits during the first quarter. TE had posted a 44 per cent increase in profits in the three months which ended in March, to reach LE536.04 million. This was due to a 38 per cent decline in tax expenses. The company also benefited from the dividends which were distributed by its 25 per cent owned mobile operator, Vodafone Egypt. However, the increase in the prices of phone tariffs was not reflected in these results, since it was only applied in April. RAYA HOLDINGS announced its intention to increase its paid-in capital by up to a maximum of 10 per cent. This would be done by offering shares to employees at a weighted average price, during the six-month period, prior to the offering. The company also announced that its employees would be able to sell their allocation within five years. The company meanwhile hit all time lows. It released poor IQ06 results, and lost 9.93 per cent during the week, closing at LE11.70 per share. Compiled by Sherine Abdel-Razek
