Stock market surge THE STOCK market continued to surge upwards following the Eid Al-Adha holiday. Pushed by the solid performance of telecoms and optimistic predictions of improved end of year results for the big caps, indices surged to record levels. The Hermes index, the benchmark for Egypt's big caps, rose 1,051.68 points, or four per cent, to 27,611.24, an all-time high for the index that has climbed 15.5 per cent since the start of 2005 after doubling in value in 2004. The broader CIBC index finished 1.85 points up at 117.78. Mobinil climbed LE13.91, or 10.5 per cent, to reach LE147.02 on the back of better than expected full-year results to be posted next month and Merrill Lynch's raising of its price target on Mobinil to LE165. The company announced last week that it had more than four million subscribers by the end of 2004. Other stocks also surged, including rival mobile operator Vodafone Egypt. There were also strong performers from other sectors. Oriental Weavers also climbed five per cent to end trading at LE70.21 while Orascom Construction Industries (OCI) climbed 7.6 per cent, also on the back of better than expected final year figures. Gas to Spain A CARRIER left the port of Damietta for Spain last Sunday carrying Egypt's first ever exports of liquefied natural gas (LNG). Officials hailed the shipment as a seminal moment in the development of the hydrocarbon industry, revenues from which the government is hoping to finance its economic reforms. The shipment belongs to Union Fenosa, the Spanish oil and gas firm which helped build the Damietta facility. It is the first part of a 25-year deal, signed with the Egyptian General Petroleum Corporation in 2000, to deliver 4.4 billion cubic metres (155 billion cubic feet) annually to Spain. Egypt's only gas exports so far have been to Jordan through a pipeline inaugurated in July 2003. Plans are in place to extend the pipeline to service markets in Lebanon, Syria, Cyprus and, by 2006, Turkey. LNG will also be shipped to the United States through a deal with British Gas, while French gas giant Gaz de France has contracted 4.8 billion cubic metres (169 billion cubic feet) annually over 20 years, beginning in 2006. Egypt's proven natural gas reserves are estimated to be approximately 1.87 trillion cubic metres (66 trillion cubic feet). Customs dollar modified CALCULATIONS of the Egyptian pound equivalent of customs charged on imports will now be based on the value of the Egyptian pound on the day goods enter their port of destination. The new arrangements, which came into force last week, replace the scheme under which the figure was calculated on the basis of the previous month's average exchange rate. The new system follows the continuing downward slide of the dollar which has fallen from LE6.2 in December 2004 to LE5.85. EU spin THE FIRST instalment of an 80 million euro grant to support the spinning and weaving industry has been paid by the EU. The first 19.5 million euros have been earmarked by the Ministry of Investment to help restructure the sector and retrain workers. According to Diego Melado, head of the EU delegation in Cairo's industrial modernisation unit, the Egyptian government has chosen to prioritise the restructuring of public companies within the sector. The 80 million euro grant will be paid in four instalments, ending in 2008. No place for monopolies THE MINISTER of foreign trade and industry said last week there is no place for monopolistic practices in the Egyptian cement market. The Egyptian market supports 12 cement producers with a combined annual production of 35 million tonnes, of which no more than 24 million tonnes are consumed locally. The removal of tariffs on both packed and unpacked cement imports would, said the minister, act as a disincentive to cartel-like arrangements. Speaking at a meeting with members of the Federation of Egyptian Industries' Cement Producers' Division, he argued that local consumption would have to be boosted to make up for the drop in exports expected by mid-2006, when several newly- established cement factories in neighbouring Arab countries and the Gulf are expected to begin producing. Local production has dropped in the last two years owing to a sluggish construction sector. Untying red tape "INSTITUTIONAL alternatives to reforming the government's supervisory role: lifting obstacles to economic activity", a report prepared by Mona El- Garf, professor of economics at Cairo University, was presented at the Egyptian Centre for Economic Studies last week. El-Garf identified high levels of centralisation in the decision-making process and a lack of transparency and disclosure as among the factors restricting investment flows in Egypt. The costs of bureaucratic interference, she said, are largely borne by investors. "In Egypt the number of procedures needed to initiate any activity is 13, compared to nine in countries with similar income levels and five in best- practice countries," said El-Garf. The result of this red-tape, she argued, was to boost the informal sector and increase unemployment levels, particularly among women. To tackle these problems she suggested a regulatory reform committee (RRC) be set up along the lines of those established in Korea and Mexico. The RRC would review government procedures as well as coordinate between the various regulatory bodies -- sector supervisory authorities, local development ministries and governorates -- through a technical secretariat who would report to the RRC. The RRC would, in turn, work closely with the competition commission and several ad-hoc working groups and report directly to the Prime Minister. El-Garf recommended that the RRC should be comprised of 20 members, no more than a third from government bodies and the rest from non- governmental organisations, including chambers of commerce and the Federation of Industries. New WTO head CARLOS Perez del Casillo of Uruguay, Jaya Krishna Cuttaree of Mauritius, Luiz Felipe de Seixas Correa of Brazil and Pascal Lamy of France have all been nominated to succeed WTO Director-General Supachai Panichpakdi, whose term in office expires next August. The four candidates presented themselves to members of the WTO during a formal General Council meeting on 26 January. A final decision on who will succeed Panichpakdi is expected by the end of May.
