The Cairo bomb attack caused some anxious moments. Sherine Abdel-Razek reports While the Cairo bazaar suicide bomb attack occurred after the end of the trading week on Thursday, it pulled the market down during early transactions this week. However, the market soon gained ground to close in positive terrain on Monday. The losses on Sunday were based on a selling spree by panicky individuals skittish about news like the bomb attack which killed four people, and its effect on the economy, especially in the tourism industry. The most actively traded stocks fell sharply as expected by the bourse's leading tourism sector player Orascom Hotels and Development, shedding 8.2 per cent to trade at LE41.24. "We expected a worse plunge but the initial signs calmed fears with reports indicating that things were normal at Red Sea resorts and that there were no cancellations at hotels," said one trader. The benchmark Hermes index closed up 2.65 per cent at 35,181.04 on Monday after losing 3.7 per cent on Sunday. "Investors, mainly institutional, started to see the [bomb] incident as a one-off thing and recovered from fears that a bomb in a Cairo bazaar would have long-term effects on the economy. Things returned to normal at the exchange," the trader, who asked to remain anonymous, said. The attack came soon after a correction movement that stripped the stocks of previous gains, leaving it at attractive prices. MobiNil stock had fallen by around nine per cent since early March. Orascom Construction Industries (OCI) has fallen by around 20 per cent. Last week's transactions witnessed an upward trend amid an overall positive attitude following correction movements the previous two weeks. HFI increased to 35,603.21 points from the previous week's total of 34,077.44 points. Orascom Projects and Touristic Development (OPTD) was a main player in recent results and because of expansion plans in Taba. OPTD posted a 2004 net profit of LE61.83 million compared to a loss of LE24.85 million the previous year. Orascom Telecom Holdings (OTH) was much in the news during the week. OTH investors welcomed the company's decision to distribute dividends for the first time since it was founded in 2000. OTH will distribute to its shareholders LE275 million in 2004 profits equivalent to LE2.5 dividend per share. The company had retained profits for expansion of its nine operations in the region. Another OTH-related development was its decision to appoint former Egyptian foreign minister Ahmed Maher to its board of directors. "Maher's appointment to the OTH board adds to the company's assets, particularly in light of the minister's connections in the Middle East region," Naguib Sawiris, OTH chairman, said. Meanwhile, the company's expansion plans in Algeria and Tunisia were overshadowed by news of strong competing bids. Two investors have submitted bids to buy the Palestine Investment Fund's (PIF) shareholdings in two Algerian and Tunisian mobile phone firms which OTH has said it has agreed to buy. Investors close to the PIF, the Palestinian Authority's investment arm, said a dispute recently arose among its board members over the Orascom deal. OT's offered $340 million, while the other two bids each exceed $400 million each. Orascom Telecom said last month it was asking the International Chamber of Commerce's arbitration service to enforce its purchase of the PIF stakes, which would increase its controlling stake in Algeria's leading mobile operator Djezzy to 85.21 per cent, from 62.14 per cent, and its holding in Tunisiana to 44.5 per cent, from 22.47 per cent. Company shareholders are also closely watching the news about a Sawiris offer to buy Italian telecoms firm Wind. Reports value the offer, which Sawiris submitted with other investors under the umbrella of a group called Weather group, at 12 billion euros. Traders soon expect a revival in market transactions due to new privatisation plans, together with a plan by Raya Holdings to be listed in May. Investment Minister Mahmoud Mohieddin has said government stakes in the two state-owned refining companies, Midor and Alexandria Petroleum, will be offered through the stock exchange during the next few weeks. Egypt will offer 20 per cent of Midor on 25 April and 20 per cent of Alexandria Petroleum at the end of May. State-owned Egyptian General Petroleum Corporation (EGPC) owns the majority of both firms. Moreover, the Holding Company for Building and Construction announced the sale of its stake in Medinet Nasr Housing representing about 6.1 million shares. At the current market price of about LE66 a share, the sale would be worth about LE400 million. The holding company presently owns around 25 per cent of the firm's shares, with the rest of the 38 per cent held by state banks and insurance companies. The exchange regulators decided last week to exclude five extra shares from the daily price movement ceiling of five per cent, raising the number of freely moving shares to 30. These include shares of Vodafone Egypt, National Societie Generale Bank, Qena Cement, Beni Sweif Cement and ASEC Cement companies. Market regulators, however, may suspend transactions on any of these stocks for 30 minutes if its price moves 10 per cent up or down in single-day trading. The bourse may also suspend trading on a stock if the weighted average of the stock price exceeds its previous day's closing by 20 per cent. Market observers say that the inclusion of three cement shares in the new decision stems from an increasing interest in local cement shares after the takeover deal of Suez Cement by Italceminti.
