The market's slowdown continued in the week ending 19 April in which heavyweights lost yet more ground in the midst of several profit-taking scenarios Overall market turnover stood at LE3.79 billion, a relatively low volume compared to the average of LE4 billion in the previous weeks. Around 25 per cent of transactions were cornered by EFG-Hermes alone. This was highly criticised by observers, since it links the market to the performance of one share. EFG-Hermes suffered a severe loss of 16 per cent during the week and closed at LE60.52. In a step which is aimed at paving the way for the issuing of new instruments in the market Minister of Investment Mahmoud Mohieddin issued a decree modifying the 10th chapter of the capital market law. This regulates the issuance of asset-backed securities and securitisation activity. The decree aims at establishing licence requirements for companies that wish to operate in the securitisation field. It also sets up rules for the transfer of rights of security holders. The week also witnessed the release of first quarter results by a number of companies. Another development was the election of new board members for the CairoAlexandria Stock Exchange (CASE). The new members who represent brokerage and stock exchange- related investment companies were elected from a list of 16 candidates. THE EGYPTIAN COMPANY FOR MOBILE SERVICES (MobiNil): The company posted a 21 per cent increase in net profits for the first quarter of 2006 compared to the corresponding period last week. The company's net income rose to LE311 million on sales of LE1.23 billion, which is 13.5 per cent higher than the same quarter of last year. The first quarter also witnessed a four per cent increase in the number of Egyptians subscribing with the company to reach 6.97 million compared to 6.7 million in December 2005. According to HC Securities this growth rate, along with that attained in the fourth quarter of 2005 are the lowest by MobiNil in the past two years. This raises concerns about the profitability of the company's newly-added subscribers. The second and third quarters of 2005 witnessed a subscribers' growth rate of 16.6 and 27 per cent respectively. MobiNil has a 52 per cent market share compared to Vodafone Egypt's 48 per cent. This is expected to continue throughout 2006, since the third mobile network is not expected to operate before 2007. HC gave a Strong Buy recommendation for MobiNil and set a target price of LE232.5, which is 51 per cent higher than its share's closing price of LE154.03. TELECOM EGYPT (TE): The anticipated fierce competition for the third mobile licence for which TE is expected to bid has weighed down the company's shares. The National Telecommunication Regulatory Authority (NTRA) said it expects to receive at least 10 offers for the third mobile licence on 4 May, 2006. The NTRA and Ministry of Finance formed a technical committee to examine the proposals. Any offer which includes more than 70 per cent of the technical requirements will be allowed to re-bid in July 2005. TE's shares dropped by 2.96 per cent, to close at LE15.06. OLYMPIC GROUP FINANCIAL INVESTMENTS (OGFI): The holding company specialised in manufacturing and retailing consumer durables signed a partnership agreement with the UAE-based Majid Al-Futtaim Group. By virtue of this agreement a new real estate company named Al-Shorouk City Centre Company will be formed and jointly owned by OGFI's subsidiary, Namaa for Development and Real Estate along with Majid Al-Futtaim Egypt. The new company will have a paid-in capital of LE450 million. ORASCOM HOTELS AND DEVELOPMENT (OHD): The subscription rate in the company's recent capital increase reached 99 per cent. This will raise OHD's paid-in capital from LE590.3 million to LE1 billion. The capital increase includes 82 million shares, out of which 80 million were offered to the company's existing shareholders. The remaining two million shares were offered to the company's employees. On a related note, SunAir, a joint venture between OHD and the Tunisia-based Khartago Airlines announced that it will increase its fleet with new 500 series ATR 210-72 planes. This is part of SunAir's plan to attract more visitors from Europe and the Gulf states to local holiday resorts. OHD came among the losers' list when it dropped 2.64 per cent to close at LE40.50. ORASCOM CONSTRUCTION INDUSTRIES (OCI): The Construction arm of the Orascom group of companies, OCI, posted a 54 per cent increase in net profits in the first quarter of 2006 compared to 2005. Net profits reached LE1.7 billion, compared to LE1.1 billion in the year before. The increase came on the back of an aggressive expansion plan extending its cement production activities to seven countries other than Egypt. The company also tapped Egypt's natural gas- based fertilisers field through a 30 per cent investment in the Egyptian Basic Industries Corporation in Egypt, along with a 51 per cent investment in the Algerian Fertiliser Company (AFC). OCI lost 1.62 per cent and ended the week at LE244. Compiled by Sherin Abdel-Razak
