Free moving SIDPEC drags the market down. Sherine Abdel-Razek reports Last week, Sidi Krir Petrochemicals Company (SIDPEC) became the driving force of the market as well as the leader in terms of the volume and value of its transactions. Unimpeded by its previous daily trading price ceiling of five per cent, SIDPEC witnessed buoyant transactions throughout the week ending on 30 June. It is value peaked at LE125 during the week but ended at LE103.7, an increase of 27.52 per cent, making it the market's top performer. It also captured the lion's share in market turnover. It led the market in terms of transaction value with LE748.7 million changing hands. According to the Prime Securities Market Watch Report, market sentiments were mixed throughout the week due to the added volatility resulting from the Cairo and Alexandria Stock Exchange (CASE) decision to release SIDPEC from its daily five per cent trading price ceiling and granting it a new 20 per cent cap on its movement. However, SIDPEC's market activity did not have a positive effect on the market. Despite a healthy turnover of LE 2.5 billion, the market's most active shares index, CASE 30, lost 2.8 per cent during the week. The HC securities report noted that SIDPEC's recent entrance into the market distracted investors from other activities, thus decreasing the overall activity of the market. Other than SIDPEC, most of the market's main players witnessed little activity except for one exception, Orascom Construction Industries (OCI). Awaiting the announcement of a paid in capital increase ranging from LE1.5-2 billion, OCI shares fluctuated throughout the week to close at their opening price of LE164.57. OCI's bond offering attracted a lot of investment. According to press reports, the section of the offering denominated in Egyptian Pounds, LE500 million, was 12.6 times oversubscribed. Meanwhile, the part denominated in dollars, $150 million. was 2.85 times over subscribed . Of the 425 investors who subscribed in the offering, 327 were individual investors. Nevertheless, investors were surprised by the company's first quarter results of LE15.2 million, which were 15 per cent lower than those of last year. The week also witnessed the execution of the American Express Bank and Egyptian American Bank at a cash acquisition price of LE8.8 million, causing EAB's stock price to shoot up to LE84.16. A lot is happening on the privatisation front with new companies offered and new bids submitted. The fierce competition to acquire Egyptian Fertilisers Company (EFC), 46 per cent owned by the state, witnessed more activity. A consortium led by private equity firm Citadel Capital, raised its bid to acquire a 100 per cent stake in EFC from $475 to $501 per share. This came after EgyptKuwait Holding Company (EKHC), already a 12 per cent owner of EFC, raised its offer to $500. The Saudi Basic Industries (SABIC) withdrew from the deal since recent offers have been too high. "Buying EFC at the prices currently offered would not bring the return on investment which SABIC strives for," stated SABIC. However, it added that it will continue to seek to boost its investment in the Egyptian Market. The latest candidate for privatisation is Egypt's sole tobacco producer, Eastern Tobacco. Minister of finance, Mahmoud Mohieddin, was quoted recently as saying that as much as 54 per cent of the company should be sold. ET is currently fulfilling the requirements for registering its stock on the Abu Dhabi Stock exchange, which is considered a preliminary step towards offering 14 per cent of its shares there. Additionally, according to Prime report, ET is expected to sign an agreement within days wherein the company's shares shall be listed on the Dubai stock exchange. The stock's price increased during the week to close at LE214.61. Aside from the value of transactions and price changes, the stock exchange witnessed an important development this previous week. Both the Cairo and Alexandria Stock Exchange (CASE) and their supervisory body, the Capital Market Authority (CMA), got new directors. As was expected, Maged Shawqi who has been working as a deputy head of CASE for outgoing chief, Mohamed Abdel-Salam, for 11 months, became the new head of CASE. Shawqi has a Masters degree in economics from London and was responsible for the capital market and stock exchange division in the former ministry of economy and is a member of the economic committee in the People's Assembly. As for the CMA, Hani Sireddin, deputy head of the UAE based Al-Fottaim Holding Company, was chosen to succeed the CMA's veteran chairman Abdel-Hamid Ibrahim. He was awarded Egypt's State Merit Award for law in 2001 and has participated in submitting considerable economic legislation in and outside of Egypt. Sireddin has a PhD in international trade, is a board member of the Bank of Alexandria and is a partner in El-Shalaqani Law office.
