In a week when the bourse itself made the news, transactions bucked the usually subdued pre-holiday trading period, Sherine Abdel-Razek reports It is not only the good performance of the market's blue chips that fuelled transactions. New moves related to the Cairo and Alexandria Stock Exchange (CASE) itself added to market euphoria. CASE has signed a joint branding and marketing agreement with Dow Jones Indexes, a leading global index provider, to create the Dow Jones CASE Egypt Titans Index, covering the largest companies in Egypt. The index will be launched during the first quarter of 2006. "We expect that our collaboration with Dow Jones Indexes will encourage the development of new products on the Dow Jones CASE Egypt Titans Index and allow global investors to reap the benefits from a fast growing market like Egypt", said Maged Shawky, the head of CASE. The agreement coincided with the announcement that Egypt was the best performing of the world's 32 emerging markets during 2005. Egypt came out on top of both the emerging and developed markets in 2005, registering impressive gains of more than 150 per cent according to Standard & Poor (S&P/IFCG, S&P/ IFCI) and Morgan Stanley (MSCI) indices. In another development Minister of Investment Mahmoud Mohieddin has announced that capital market regulations will be amended in order to establish the Unified Arab Stock Exchange. The selection of Arab companies that will be listed on the exchange, which will be based in Egypt's Smart Village, will take place by the end of this month. On the back of the news the market made unexpected gains in the week preceding the Eid holidays, when trading tends to be subdued. The market recorded a record turnover of LE 5.4 billion during the week ending 5 January. The performance of the market's leading players should certainly encourage investors. EFG-Hermes, the financial sector's -- as well as the market's -- bellwether showed a head- turning performance during the week. The investment banking group announced that it will purchase 20 per cent of Audi Bank, one of Lebanon's largest private banks, as part of its strategy to move into commercial banking. EFG Hermes also announced that it will increase its capital through a private placement targeting qualified investors as well as offering shares to its existing shareholders. EFG Hermes will soon convene an extraordinary general assembly to approve the two moves. EFG-Hermes climbed 28.14 points during the week as LE 1.19 billion worth of its shares changed hands. It closed at LE 164.19. The week also saw the end of the three- months battle to acquire a majority stake of the Egyptian American Bank (EAB) when the French Calyon bank succeeded in acquiring 74 per cent of EAB following its purchase of the 30 and 44 per cent stakes held by the Bank of Alexandria and American Express Bank respectively. The final price was LE45 per share. Calyon has expressed interest in purchasing the 26 per cent of EAB stock that remains on the market at the same price, which is less than EAB's existing shareholders had expected. As a consequence EAB's shares showed a 12.68 per cent drop during the week to close at LE48.46. The textile sector maintained its solid performance with three companies within the sector coming out top this week in terms of the number of shares traded. Arab Cotton Ginning gained 2.48 per cent during the week to close at LE27.84 as 25.4 million shares, valued at LE691 million, changed hands. The telecom sector also had a good week. Raya Holdings soared by 19.31 points to end the week at LE23.91 on the back of news that it is negotiating with a European mobile operator to form a consortium to bid for Egypt's third mobile network license. Fourteen telecommunication companies are awaiting the release of memorandum of understanding for the license, including El-Kharafi Group, MTC, UAE Itisalat. Alexandria Mineral and Oils company (AMOC), whose summer IPO was massively oversubscribed, returned to the limelight as it gained 9.91 per cent to end the week at LE85.80. The gains followed increases in global oil prices that will directly inflate the company's top and bottom lines. Macroeconomic news released last week also acted to fuel the generally bullish atmosphere. Egypt attracted US$3.9 billion worth of FDIs during FY04/05 compared to US$2.1 billion during FY03/04. Meanwhile, the minister of investment announced that he expected FDIs during the first quarter of fiscal year 2006 to reach US$1.9 billion, with the petroleum sector accounting for US$919.5 million of the total. On another positive note Egypt raised LE10.9 billion pounds privatisation proceeds between July and December of FY05-FY06, almost double the 5.6 billion pounds raised during FY04-FY05.
