Small caps are driving the market up while blue chips investors await first half results. Sherine Abdel-Razek reports Before Sunday's limited decline resulting from a selling spree ignited by Sharm El-Sheikh bombings, the market had a quite week ending in the black. The attacks on the Egyptian Red Sea resort city of Sharm El-Sheikh on Saturday, led to high selling on the early Sunday transactions but by mid-session the market rebounded to recover some of the losses. This followed a week of stable performance supported by an increasingly upward trend, mainly fed by the activity of the market's small caps. The blue chips witnessed relatively subdued transactions as investors held their holdings in anticipation of the pending first half financial results. Also, the political factor started to weigh down on the market with the announcement date of the names running for the presidency getting closer. The total value of transactions came to LE2.36 billion. The transactions of foreigners counted for 31 per cent of the market with most of their transactions being selling orders. Topping the most active list was the financial firm EFG Hermes Holding. It traded LE224.1 million worth of shares. EFG-Hermes has acquired 3.6 million treasury shares, meaning that it bought back some of its own stock at a price ranging between LE23.25 and LE35.1. EFG officials said the decision was taken in light of the company's excess liquidity status. Other well performing small caps are the sister companies Al-Ezz Porcelain and Al-Ezz steel bars. Both secured solid positions on the highest traded list with the first sky rocketing by 20.23 per cent to LE12.54 and the other trading LE101.9 million worth of its shares. This came despite the fact that prices of steel rebars dropped by LE500 per tonne last month to reach LE2,650 per tonne. The banking sector enjoyed the best performance in the market. There was a healthy appetite for the purchase of Watany Bank's shares upon the release of its first half results. The bank's results showed an outstanding 125 per cent surge in net profit which drove its share price up to close at LE15.60. In addition, Misr International Bank attracted a lot of attention. The competition for buying a 25 per cent stake in the bank witnessed an important development. The Central Bank of Egypt approved a suggestion that gives the winning bidder the right to buy the rest of the shares. The National Bank of Bahrain withdrew from the bid as it said it was not ready to pay for 100 per cent of the bank. This leaves the field open for Cairo Barclays Bank, PNP Paribas and Societe Generale Banque. MIBank also witnessed positive activity as its shares rose to LE50.97. EFG-Hermes put the bank's share fair value at LE54.2. The telecom sector witnessed relatively subdued activity amid news that Telecom Egypt is about to choose which investment bank will evaluate the company and prepare it for privatisation. Another important development was the statement by minister of telecommunications, Tareq Kamel, that the bidding process to acquire a license to operate Egypt's third mobile phone network will start in September. Vodafone led the sector in performance to close at LE94, its highest level ever. Vodafone is still capitalising on its strong financial results and the increase in its subscriber's base to 4.14 million. The sector's leader, Orascom Telecom Holding is not undergoing a share split according to its chairman Naguib Sawiris. This comes in spite of the fact that its share price has reached LE614, an unfeasible investment for individual investors. On a different note, OT revealed plans to invest $2.5 billion in Iraq through its subsidiary Iraqna over the coming period. Its share price closed at LE586. The big bang of the week was driven by Orascom Construction Industries (OCI). The subscription period for its non-convertible long- term bonds expired. The issuance attained the highest coverage ratio in the Egyptian market, whereby the issuance of local currency valued at LE500 million was over subscribed by 12.6. Meanwhile the foreign currency bonds of $150 million were 2.85 times over subscribed. The market's recent star SIDPEC took to the sidelines settling at LE102. Analysts believe that the limited interest in the stock is due to the news that another player from the promising petroleum sector is about to be floated in the near future. Alexandria for Metallurgical Oils Company (AMOCO) said it will discuss its public offering procedures during its next general assembly meeting expected to be held next month. The expected offering will include 20 per cent of AMOCO.
