By Sherine Abdel-Razek The week witnessed a mixed performance with several shares making gains early in the week only to retreat later. Market total turnover came in at LE9.95 million and the CASE30 index remained above 8,000 points. There was negligible trading in bonds -- a mere LE1 million compared to the previous week's LE168 million. The figures confirmed a shift to equity investments where last year the average yield hovered around 150 per cent while the interest rate on fixed income investments -- including bonds and bank deposits -- does not exceed nine per cent. The bourse's monthly report estimated market capitalisation at LE532 billion for January, 16.6 per cent higher than the December figure and equal to more than 90 per cent of estimated GDP for fiscal year 2006. EFG-HERMES: A buoyant performance saw EFG Hermes topping the list of traded shares with transactions worth LE2.4 billion or 20.5 per cent of overall market activity. The shares gained 2.5 per cent to close at LE256. Meanwhile, EFG's extraordinary general assembly meeting approved plans to raise capital. An initial private placement aims at increasing issued capital from the current LE400 million through the issuance of 16 million shares at a fair value of LE115 per share. The shares will be offered to qualified investors who provided EFG-Hermes with loans to fund the acquisition of Audi shares, converting the loans into equity. Following the conversion a further 194 million new shares will be issued at EFG shares' par value of LE5. The investment bank's acquisition of 20 per cent of Audi has already started to reap benefits following Audi's own acquisition of a 20 per cent stake in Cairo Far East Bank. EFG is also consolidating its presence in the Lebanese market following its selection as the book runner for a $94 million secondary offering by construction firm Solidaire, founded by the late Lebanese prime minister Rafik Al-Hariri in the late 1980s. SIDPEC: The appearance of Sidi Krir Petrochemicals Company (SIDPEC), one of the market's two listed oil companies, on the market's most actively traded stock index reflects growing interest in its shares. SIDPEC came second on the index, with LE1.3 billion worth of shares changing hands. The bulk of the total was accounted for by a single transaction as the Bank of Alexandria sold its seven per cent holding in the company to the National Investment Bank for LE1 billion. The sale came within the frame work of BA's efforts to tidy up its balance sheet during the count down to its privatisation. SIDPEC was only listed in June 2005 through an IPO that was more than five times oversubscribed. The Holding Company for Petrochemical Industries owns 20 per cent of its shares and the Saudi Naeem Group 10 per cent, acquired through a private placement in June. The stock rose 12.55 per cent during the week to close at LE135.10. June's offer price was LE70. VODAFONE EGYPT: Egypt's second mobile network operator released its results for the nine-month period ending on December 2005. Net income increased by 54 per cent to reach LE1.2 billion. The increase was attributed to a reduction in the provision for taxes following tax law amendments that slashed taxes to a unified 20 per cent levy on services and industry. Moreover, the company's subscribers base increased by 72 per cent to 6.1 million. The bulk of Vodafone customers, 90 per cent, are now pre-paid customers. A change in the company's ownership is widely expected following Telecom Egypt's (TE) announcement that it intends to bid for Egypt's third mobile licence. TE will have to sell its 25.5 per cent stake in Vodafone Egypt if it is to pursue the bid. HC Securities said it anticipated an offer for the stake from Vodafone Group. Should this happen little will change in terms of the operation of Vodafone Egypt since Vodafone Group already has management control. Vodafone Egypt ended the week at LE106, though HC gave it a fair value of LE118. CIB: Egypt's second largest private sector bank is still riding on the wave of strong financial results. It reported a 21 per cent growth in 2005 net profit to LE610 million. A report released by EFG said that rising revenues from fixed income securities had driven the growth. CIB has been shifting its risk exposure, reallocating funds from direct corporate lending to treasury and equity investments which more than doubled between 2004 and 2005 and now account for 7.5 per cent of total assets. CIB is the first Egyptian company to release its 2005 results in line with the new tax code introduced in July 2005. While there have been no formal announcements on the sale of the National Bank of Egypt's stake in CIB, EFG's note said a price of LE53 per share has been agreed upon. AL-EZZ STEEL REBARS: Shares gained 11.08 per cent to close at LE102.83, hitting an all-time high on the back of market expectations of a stronger than anticipated performance by ANSDK. Meanwhile, the National Investment Bank bought 2.4 per cent of ANSDK to increase its holding in the company to 15.2 per cent. Last year the NIB bought a 4.5 per cent stake in ANSDK from its parent company, the Holding Company for Metallurgical Industries, to settle some of the latter's debt to the former.
