Despite the release of some positive mid-year results, the market is still waiting for more good news to regain steam. Wael Gamal reports After witnessing positive performance last week, the market reversed course during its opening session on Sunday this week. The broad CIBC Index descended 0.08 per cent to close at 145.78 points, dragged down by the banking, building materials and cement sectors. The decline in building materials stocks was led by Al-Ezz Steel Rebars, and Al-Ezz Ceramics. Also, Torah Cement and Suez Cement helped pull the cement sector down. The news of Barclays withdrawal from the MIBank deal cast a shadow on bank stocks which saw negative performance, with MIBank and EAB headed downwards on heavy trades. CIB was no exception albeit on smaller volume. Mohsen Adel, a market analyst took a look at the two weeks before the Sharm El-Sheikh blasts to explain the current situation in the market. "Profit taking and correction operations were happening before what happened in Sharm. The blasts only confirmed the trend and the market as a whole is still waiting for good news. Corporate results are not enough because some of them are already expected and included in prices and because they usually have only a temporary effect." However, this didn't prevent some sectors from performing well. The day's top performing sector was textiles, thus continuing its solid performance of last week, while MobiNil was the only telecom gainer. This comes after the market was beginning to regain its strength despite the market consequences of the explosions in Sharm. Quite and small cap leadership turned into active trading led by large caps by the end of the week. Last Thursday, the broad CIBC Index ended at 145.89 points gaining 1.09 per cent while the HFI went up one per cent gaining 432 points to reach 42,484. Advancing stocks outpaced declining ones at a ratio of 27:2 leaving two stocks flat. The textiles sector continued its positive performance, topped by KABO, Arab Cotton Ginning, Arab Polvara and Nile Cotton Ginning. Meanwhile, two transactions by Arab Gulf Investments and Arab Cables helped boost market activity, representing 10 per cent of the total market turnover. The top performer at the end of the week was Abu Qir which advanced the most, sky-rocketing 4.5 per cent to reach LE 99.29, while MIBank declined the most losing 0.1 per cent to end the session at LE50.56. MobiNil led the telecom sector with a strong performance rising two per cent to close at LE 173.21, followed by Orascom Telecom OTH, which received a boost from the news that it was short listed by a Nigerian mobile operator. MobiNil continued having the highest turnover of LE 42.4 million. Some banking stocks were also heading upwards. CIB stock rose in price after the bank's announcement of a preliminary due diligence for the acquisition of the National Bank of Development (NBD) as well as the release of a 23 per cent increase in its first half of 2005 net profit to LE283 million. The stock traded LE34.9 million, and gained 1.9 per cent closing at LE47.91. The week witnessed OT pre-qualifying for a 51 per cent stake in Nitel of Nigeria. On that basis, Orascom Telecom will enter the formal bid for the sale of a 51 per cent stake in Nigeria's fixed line operator, Nitel. OT was one of six international investors short listed from 22 interested applicants. The other five pre-qualified bidders are: MTN Group of South Africa, Celtel, which was recently acquired by a Kuwaiti mobile operator MTC, Huawei Technologies of China, Newtel and Telkom of South Africa with its mobile subsidiary Vodacom. In 2004, mobile subscribers in Nigeria were estimated at nine million, thus implying a penetration rate of seven per cent. The sale of Nitel is expected to be concluded by September 2005. News of corporate results also began to appear. ASEC Cement Posted a significant growth in net profit recording LE197.87 million in the first half of the year, compared to only LE12.62 million in the same period of 2004. EFG-Hermes estimates a net profit of LE399.4 million for the company in 2005. It is worth mentioning that Suez Cement, a 97 per cent owned subsidiary of Italicementi, is currently carrying out due diligence in preparation for acquiring 100 per cent of ASEC Cement. Market analyst, Mohsen Adel, expects this kind of news to generate a rise in the market over the next few weeks. He predicts that "the execution of some of the anticipated deals will drive the market in an upward direction."
