News of a bundle of corporate mergers and buyouts could be driving an awaited market rebound. Wael Gamal reports The market picked up on Monday just two days before the Sidi Krir Petrochemicals Co (SIDPEC) offering. Investors began to turn to active stocks after a week of selling to collect liquidity for the initial public offering (IPO). The IPO also left its mark on the prospects of EFG-Hermes stock which led the market. Twenty-one million shares in Sidi Krir are being offered at LE70 each. The Hermes index increased by 404.27 points, or 1.1 per cent, closing at 37,143.31, while the broader CIBC index rose 0.55 points, or 0.4 per cent, to 132.36 points. Leading investment bank EFG- Hermes's impressive performance on Monday was fuelled by expectations of strong earnings from its new merger and privatisation deals. It has secured recent deals to help sell state firms such as Sidi Krir and Egyptian Fertilisers Company SAE. Its stock price also benefited from other merger deals in the market resulting in a 2.3 per cent increase to LE29.39. A wave of new deals have recently hit the market. Itsalat Emirates considers the Egyptian market to be very attractive and announced its interest in licensing the third GM Operator in Egypt. Also, a local consortium of Egyptian businessmen won a bid offering to acquire 81.87 per cent of Misr Oil and Soap which amounts to 3.27 million shares. Abu Dhabi Bank also has put forth an offering to acquire 17 per cent of Arab Banking Corporation - Egypt's shares are already owned by Arab Contractors. Similar news propelled the gains of one of Monday's other strong performers. ASEC Cement stock was up by LE1.53, or 5.9 per cent, reaching LE27.65 as a result of talks of the imminent buyout of the firm. ASEC Cement lost LE0.74, or 2.8 per cent, settling at LE26 by the end of last week despite its announcement of making a net profit of LE96.18 million in the first quarter of 2005. At the same time, similar news boosted Misr International Bank (MIBank) as news spread that a Bahraini bank, among four potential bidders, was emerging as a favourite to buy the bank. MIBank officials refused to comment on the issue. This upward direction of the market came after a week of falling prices. Having fallen by a significant 6.8 per cent the previous week, last week began with a rebound driven by heavy trading of Orascom Telecom (OT), which managed to gain 8.5 per cent after the conclusion of the Italian Wind deal raising the CASE 30 index by a remarkable three per cent. But since Tuesday, selling dominated the market as investors prepared for the Sidi Krir offering which led retail investors to panic and begin selling as they feared the market was plummeting. The benchmark Hermes index fell 708.29 points, or 1.9 per cent, to settle at 36,056.23 points by the end of the week. The broader CIBC index was down by 1.66 points, or 1.2 per cent, to 132.24 points. Ezz Steel Rebars was one of the big losers declining by five per cent, or LE1.07 reaching LE20.33. A sideways trend prevailed in market performance during May as the CASE 30 Index increased slightly over the month to close at 4,289 points on 31 May 2005, with an increase of 2.4 per cent compared to the previous month. The total value traded stayed at about the same level. It reached LE9,177 million compared to LE9,007 million during the previous month.
