Confounding expectations of a seasonal slow-down, the capital market reaches new highs in Ramadan, reports Sherine Abdel-Razek Shorter dealing hours during Ramadan usually result in a more relaxed market performance. Last week was an exception. The CASE30 index, tracing the performance of the market's most active shares, broke records with LE3 billion worth of transactions taking place during the week ending 13 October and the index finishing at 5684.5 points. Market observers attribute the better than expected performance to growing demand for leading shares, especially in the telecom and textiles sector. A positive macro-economic outlook and newly energised privatisation programme are further boosting market performance. The telecom sector fared well, with Orascom Telecom Holding (OTH) cornering nine per cent of the overall market turnover, advancing 6.71 per cent to end at LE593.65. Statements made by Naguib Sawiris, OTH's CEO, excited renewed interest in the stock. Sawiris revealed the company was examining its options of merging with the Italian-based Wind and had hired advisers to this end. A Sawiris-led consortium bought a majority stake in Wind earlier this summer. He pointed out that while the expected benefits of the merger are many OTH needs to obtain advice on the most effective way of finalising the deal without jeopardising shareholders' rights. Sawiris expects OTH's subscriber base to grow to 60 million, pushing the company's net profits to $3.2 billion by 2008. The week witnessed the release of long awaited news related to the sector. Tareq Kamel, minister of communications and information technology, announced that local and international companies will be invited to submit bids to acquire Egypt's third mobile network licence by the end of this month. The minister emphasised the successful bid will be conditional on the use of third generation technology. Kamel also revealed that the cabinet will soon make public the terms of Telecom Egypt (TE) and noted that a percentage of the shares will be offered to TE's employees. The long awaited offering is expected to involve between 10 and 20 per cent of TE's equity. TE holds a monopoly of fixed lines in Egypt. In August it attracted 186,000 new subscribers, three and a half times more than reported in the months of January and February. With LE17.07 billion distributed across 1.7 billion shares TE will be the largest company listed in terms of both market capitalisation and shares numbers. TE saw net profit during the first half of 2005 increase by 65 per cent to reach LE1.03 billion. Arab Cotton Ginning Company was one of last week's most heavily traded stocks, with prices sky-rocketing to close at LE13, an increase of 29.66. The banking sector was generally subdued, with the exception of Al-Watani Bank which gained 14.37 per cent to finish at LE19.18 on the back of news that Price Waterhouse Cooper is conducting a due diligence study of Al-Watani as a preliminary step to a potential merger with Commercial International Bank CIB. New developments in the sector include National Bank of Egypt's (NBE) acquisition of the Mohandes Bank. The merger of NBE and Mohandes became effective on 5 October with trading in Mohandes' shares suspended last week. Transactions in the cement sector were unusually quiet with only Orascom Construction Industries (OCI) bucking a news free period. OCI revealed plans to build a new cement factory with an annual production capacity of 2.5 million tonnes in Indonesia. Newly listed companies in the oil sector continued to perform well with SIDPEC ending on LE117 and AMOC at LE90, registering 0.7 and 7.37 per cent hikes respectively. SIDPEC was floated three month ago at LE76. Last month AMOC's offering price was fixed at LE45. The advances made by the two reflect developments within Egypt's oil sector. Egypt's oil exports increased by 31 per cent to bring in LE32 billion during the fiscal year 2004/2005. The increase, backed by gas exports, offset the pumped up imports of the sector. The Ministry of Petroleum revealed that the value of petroleum imports increased by 77 per cent to reach LE8 billion during the fiscal year, with increased prices accounting for much of the figure. The newly revitalised privatisation programme will result in other appealing stocks becoming available. The Holding Company for Tourism and Hotels is planning to float 40 per cent stakes of five hotels -- the Cairo Marriott, Mena House Oberoi, Cataract Aswan, the Winter Palace in Luxor and Helnan Palestine in Alexandria. Privatisation has been accelerated since Ahmed Nazif's government assumed power in July 2004. Since then privatisation receipts have amounted to LE5.1 billion. The three-month period ending with September 2005 saw the government sell stakes in state-owned and joint venture companies on 25 separate occasions. Out of the proceeds LE3.6 billion has been assigned to finance the restructuring of state-owned companies.
