The week ending 16 March was one of the market's most difficult. Black Tuesday's crash saw the majority of shares take an unprecedented tumble. And while, the following day, the market seemed to stabilise slightly, following the intervention of institutional investors who bought heavily, it did not last. By Thursday the market seemed to be suffering from a hangover. Many shares swung back and forth, only to end the week on a down. Tuesday's crash attracted a lot of public attention, and investors demonstrated in front of the Cairo and Alexandria Stock Exchange's downtown headquarters. Members of parliament lamented that market authorities had reacted too slowly, intervening neither to reign in the market's unprecedented climb between November to February, nor effectively put the brakes on the ensuing fall. In a report issued at the end of the week, EFG Hermes predicted the market was nearing the end of the current correction. Western investors, it said, had emerged in the week as net buyers, while the bulk of inexperienced retail investors fled the market following Tuesday's crash. "The correction has brought valuations back in line, and below emerging market levels. Today Egypt trades on a P/E for 2006 of 13.5 times." Of the 21 stocks traced by EFG, 17 were being traded at below their air value estimates, suggesting a strong potential for increases. TELECOM EGYPT: Egypt's fixed line monopoly announced its fiscal year 2005 results, posting net income of LE1.8 billion compared to LE1 billion in 2004. Most of the increase -- amounting to LE595 million -- is accounted for by foreign exchange gains and provisions, and does not represent any significant increase in operating income. TE's operating costs increased by 9.4 per cent during the year. Rising costs were the main factor behind TE's decision to increase the rates for domestic calls, said chairman Akil Bashir. TE is in the running for Egypt's third mobile network license, though it faces stiff regional and foreign competition. The telecommunications group Telinor is just the latest of many international players to express an interest in acquiring the license. MISR ALUMINUM: Following last week's share price collapse the board of directors of the Holding Company for Metallurgical Industries, MA's mother company, opted to suspend its offering of a 17 per cent stake in MA. Their decision has to be approved by Minister of Investment Mahmoud Mohieddin before the 30-day subscription period ends on 27 March. The sale includes a seven per cent stake to be divested through an IPO, at LE54 per share, and a further 10 per cent to be offered to institutional investors in a private placement at a minimum price of LE54. In 1998 a previous offering of Misr Aluminum was similarly derailed by a market slowdown. MA shares ended the week at LE50. EFG HERMES: As its shares nose-dived to hover around the mid-30s during last week's doldrums, plunging from their late January high of LE285, EFG Hermes decided to enter the market, buying up 15 million of its own shares as treasury stock. While the shares' decline was mostly fed by the overall bearish market sentiment, further downward pressure came from the continuing impact of the company's capital increase in early February. EFG remained, nonetheless, the market's most heavily traded share, cornering LE574.4 million worth of transactions during the week. During the first nine months of 2005 EFG, Egypt's largest brokerage, translated the euphoric market mood into profits of LE187 million. The figure does not include income from portfolio management, which will be added to the end of year figures producing profits that are expected to be between LE348 million and LE356 million. EFG shares ended the week at LE48.93. WATANY BANK OF EGYPT: The bank extended the subscription period for the uncovered portion osf its rights issue of three million shares until 25 March, having already received subscription offers for 22 million capital increase shares priced at LE15.25. The LE250 million capital increase will be used to finance Watany's restructuring plan. Its shares bucked the overall downward trend, ending the week at LE20.1, up from the previous week's LE18. ORASCOM TELECOM HOLDING: Egypt's largest listed company, with a market capitalisation of LE70 billion, decided to intervene to stop the decline in its share value, buying two million of its shares as treasury stocks. While the share price slipped by more than 20 per cent during Tuesday's crash it ended the week at LE327, the same as the previous week. ALEXANDRIA NATIONAL IRON AND STEEL: Last week ANSDK's general assembly agreed to increase dividends from the LE25 suggested by its board of directors to LE32. The company's bottom line witnessed a 72 per cent leap from LE1.379 billion in FY04 to 2.375 billion in FY05. The assembly also decided to freeze short- term expansion plans given that the year- on-year increases in local consumption recorded since the late 90s are expected to come to a halt. Compiled by: Sherine Abdel-Razek
