The week ending 15 February saw the CASE index lose nine per cent to end on 6,755 points, its sharpest fall for two years. This decline was characterised by low trading volumes with the overall volume of transactions coming in at LE6.51 billion compared to an average of LE9 billion for the three previous weeks. Foreigners were net buyers -- the difference between their buying orders and sales was LE655 million -- though this was offset by a selling spree among local individual investors who fear that the market might lose yet more ground during the week. EFG HERMES was once again the most actively traded stock in the market with an overall turnover of LE1.532 billion. The company is still celebrating its success at being appointed sole financial advisor for the Lebanese construction company Solidere's secondary offering of $94 million. The issue was four times oversubscribed. Nevertheless, the strong tide of profit taking swamped the market's best performer shares to lose 11.18 per cent closing at LE173.80. CIB announced it has yet to submit an offer to buy the National Development Bank (NDB) following a change in CIB's ownership structure following the acquisition of the National Bank of Egypt's 18 per cent stake in CIB by a consortium led by the American private equity firm Ripplewood Holdings. CIB has completed due diligence for the acquisition of NDB, which failed to meet the Central Bank of Egypt's regulations relating to minimum levels of capital, set at LE500 million. The NDB has in the past specialised in extending credit to small enterprises, and press reports suggest that since 1987 the bank has extended LE1.1 billion worth of loans to SMEs. CIB ended the week nine per cent lower at LE63.48. TELECOM EGYPT had a bullish start to the week following rumours that it is about to form an alliance with UAE-based Itisalat for Telecommunications to bid for Egypt's third mobile licence. By mid-week TE denied the rumours, announcing that negotiations were ongoing with several foreign investors and no deal had been concluded. Itisalat itself announced that it formed a consortium with the local telecommunication company Mashreq. Other bidders include a consortium of South Africa's MTN and Raya Holdings. Should it acquire Egypt's third mobile licence, TE will have to sell its 25 per cent stake in Vodafone Egypt. A survey conducted by IT specialists the Arab Advisors Group revealed that while a majority of GSM users (75.5 per cent ) are satisfied with their existing mobile operators, a substantial number (close to 36.1 per cent) would consider switching if offered better rates and service -- suggesting a potentially lucrative base for a third operator. On a related note, Middle East Rating & Investors' Service (MERIS) maintained its "AA" credit rating for TE and a "stable" outlook for both the company and its bonds. TE was still unable to resist the downward pressure felt by the market and shares dropped 10.54 per cent to close at LE18.25. With a turnover of LE627,41 million, TE was the second most actively traded stock of the week. OT lost 6.39 per cent through the week to end at LE325.23 following news that Wind, a wholly owned subsidiary of Weather, the consortium formed by OT's Chairman Naguib Sawiris and Italian power company Enel last June, is increasing its long-term debt by 250 million euros through a bond issue. Weather Investments owns 50 per cent plus one golden share of OT's equity. OCI's offer of 11.5 million new shares to existing share-holders closed on 16 February. The new shares were offered at LE201, a weighted average OCI's share price over the last 12 months, and considerably lower than last week's prices which ranged between LE245 and LE260. OCI plans to use the yield of more than LE2 billion to finance its regional expansion plans. Many market analysts believe the share issue helped precipitate the market's decline as OCI share- holders liquidated holdings in other shares in order to subscribe to the new issue. BESIX, 50 per cent owned by OCI, has signed a Build-Operate-Transfer (BOT) agreement to build a waste water treatment plant in Ajman in the United Arab Emirates. The 429 million euro contract will be executed by a new company in which BESIX holds a 50 per cent stake. Construction work is expected to be completed in 30 months. SODIC: Dealings in SODIC's shares were suspended for a day to allow for an enquiry into sky-rocketing prices. The company has recorded a 7027 per cent increase in its share price since January 2005. SODIC says the increases have been fuelled by a possible merger between its affiliate Palm Hills Urbanisation and New Cairo for Real Estate Investments. The company's performance has been impressive, with net profits of LE13.3 million recorded during the first nine months of 2005.
