Though not reflected in its main indices, the market is witnessing many events both on the micro- and macro-level. Sherine Abdel-Razek reports Market transactions last week saw a slight recovery from the lacklustre performance of the week before. The overall transactions came to LE59 billion. The market's most actively traded companies index CASE30 declined by 2.1 per cent to close at 4761. Interest in the market blue chips is retreating as investors are holding back their money in anticipation of the release of the mid-year profit results. Meanwhile, companies with small capitalisation are drawing in investors with attractively low prices. Heavy selling by foreign investors dragged down the shares of Orascom Telecom (OT), which ended the week at LE530. The company's shareholders are anticipating the release of its first half results which are expected to reflect the increase in its subscribers base, especially after it widened its share holdings in the Algerian Djezzy to 87.7 per cent. Vodafone Egypt witnessed a good week as it capitalised on a 79 per cent increase in its profits thanks to a decline in tax payments. It closed the week at LE92 compared to LE90 on the previous week. One of the market's best performing stocks of late, Egyptian Financial Group (EFG) Hermes maintained its strong position. EFG released its first half consolidated results, posting a net profit of LE41.4 million. The hike in net profits is due to a 370 per cent increase in revenues from commissions and management fees. The company hit a new high of LE45.82 at the end of the week. Moreover, EFG's shareholders were pleased by the news that a consortium led by Credit Suisse First Boston (CSFB) but including EFG Hermes and CIB won a contract to help privatise Telecom Egypt. A stake including 10-20 per cent of the telecom company is expected to be offered before the end of this year. While the banking sector witnessed many developments, a handful of banks shouldered the heaviest losses in the market throughout the week. MIBank lost ground closing at LE46, around LE4 less than its closing price the previous week. This came as the final date for receiving bids to acquire the controlling stake in the bank was on 8 August. Until press time there were only two competing bids offered by the French Société Générale Bank and BNP Paribas to buy a 26 per cent of MIBank. MIBank is considered the second largest private sector bank in Egypt with LE17.8 billion worth of assets. As for the Egyptian American Bank (EAB), it is once again stealing the spotlight no less than three weeks after its merger with the local activities of American Express Bank. EAB's major shareholder, Bank of Alexandria, stated that 25 Arab and international banks have revealed their intentions to acquire EAB. EAB has a paid-in capital of LE648 million. The banks shares nose-dived from LE99 to LE68.4 by the end of July due to a capital increase. Bucking the losing trend was Commercial International Bank (CIB). CIB has received the central bank's approval to conduct a preliminary due diligence of the National Bank for Development (NBD) for a possible takeover bid. The bank gained LE3.8 to last trade at LE67.8. Moving to the cement sector, only ASEC Cement shares witnessed any developments. ASEC cement lost some ground to close at LE27 amid news of its acquisition. Italcementi announced that it signed an agreement with ASEC cement company to acquire 68.7 per cent of the company for a price of LE29 per share. The deal is going to be executed through an Italcementi subsidiary in Egypt, the Suez Cement Company. In addition, the agreement stipulates that Suez Cement will offer to buy the remaining ownership of ASEC Cement during the second half of August at the same price. According to the deal, Suez Cement, which is 78 per cent owned by Italcementi will increase its stake in the local cement market from its current 22.4 per cent to 31 per cent. Olympic Group shares were the best performers during the week. It will hold an Extraordinary General Assembly meeting next week for its shareholders to grant approval for increasing the company's authorised capital. The increase is a prerequisite for the company to buy the remaining stake that it does not yet own in Delta Industries (Ideal). Olympic currently owns 79.2 per cent of Ideal, while the remaining 20.8 per cent is owned by the Employees Association along with several other banks and funds. The acquisition will be carried out in a stock swap. Ideal's share price reacted to the news with a LE4.97 price gain to close at LE11.61. The market for fixed income instruments was buoyant. A statement released by the Ministry of Petroleum noted that the $1.55 billion bonds of the state-owned Egyptian General Petroleum Corporation (EGPC) were 1.5 times oversubscribed. The bond issue attracted offers from 30 international institutions. IT comprises three tranches, two of which will mature in the year 2010 and the third in 2011. Meanwhile, the subscription to LE2 billion local treasury bonds, maturing in 2009, has been completed. The bonds carry a fixed interest rate of 9.25 per cent.
