With the market's main index hitting the 6,700 points threshold during the week, a downward trend is expected to continue during the coming sessions until the EGX30 reaches 6,600 points. On the macroeconomic plane, the budget deficit for fiscal year 2009/2010 was lower than expected at 8.1 per cent of the gross domestic product (GDP), thanks to an increase in tax receipts. The relevant ministry, whose initial estimate was 8.3 per cent, gave no revenue figure but said the deficit was LE98 billion. Tax revenue reached LE170.5 billion, LE7.3 billion more than in 2008/2009. The government plans to keep the deficit at 7.9 per cent of GDP this fiscal year, and to push it down to between three and 3.5 per cent in 2014/2015. ORASCOM TELECOM HOLDING (OTH): The group did not comment on recent Algerian statements that OTH must settle all its liabilities, including tax claims and fines as well as a hitherto unmentioned debt to former workers, to the Algerian Central Bank, before Algeria nationalises the company's local mobile operation Djezzy. A company spokesperson asserted that the merger with VimpelCom will not be affected by such statements and highlighted VimpelCom's official insistence to complete the deal despite the many obstacles facing Djezzy. Addressing the parliament, Algerian Prime Minister Ahmed Ouyahia said experts were evaluating the value of the unit, after which talks would be held to agree on the sum Algeria will pay OTH to nationalise Djezzy. Ouyahia added that before Algeria buys the unit from OTH, the only Djezzy owner the state recognises, OTH must pay $230 million in back-taxes and penalties along with $190 million in fines to the Central Bank for alleged currency violations and wages he claims OTH did not pay employees who worked at Lacom, the fixed-line OTH and Telecom Egypt joint venture in Algeria, which no longer operates. Speaking to reporters, Algerian Telecommunications Minister Moussa Benhamadi said that if there was no agreement on the price for Djezzy, the Algerian government would seek arbitration. But Benhamadi did not specify whether he meant international arbitration, a forum OTH has said it may eventually turn to itself in order to settle its disputes with the government. The latest Algerian demands are likely to cast fresh doubts on the viability of a $6.6 billion deal for Russia's VimpelCom to buy OTH assets, a deal that would create the world's fifth-biggest mobile telephone operator. AL-ARAFA INVESTMENT AND CONSULTING (AIVC): The company's board of directors approved the establishment of a new firm named Crystal for Shirt Manufacturing in which it will hold 59 per cent of shares. CI Capital Research noted that earnings are expected to increase by four per cent in 2010 and nine per cent in 2011 on the back of the new export stimulus programme, according to which the average rebate rate will hover around six per cent, up from previous rates which ranged between 3.5 and 4.5 per cent. Moreover, the company's CEO Alaa Arafa revealed in a press interview the firm's intention to acquire other companies working in the same field but not until six to 12 months have passed. Arafa also said the company is planning to tap into the French market, given its dominant presence in the Tunisian, Moroccan and Algerian markets. TALAAT MUSTAFA GROUP (TMG): The real estate developer is waiting for the outcome of negotiations between the Arab African International Bank and Commercial International Bank with Ahli United Bank to arrange a $150 million syndicated loan. TMG will use the loan to finance the expansion project at the Four Seasons Hotel at Sharm El-Sheikh. Last month, the group closed a deal with Ahli United Bank to obtain a $135 loan, which it will use to raise its stake in the Four Seasons Cairo Nile Plaza to 100 per cent after it agreed to purchase Saudi Prince Al-Walid Bin Talal's remaining shares. Regarding the Madinaty project, TMG's legal adviser Shawqi Al-Sayed said the legal committee set up by the Ministry of Housing is almost done with the new contract, a development that a recent CI Capital Research report viewed as positive, both for the company and its share performance, as its finalisation will signal the end of a long period of turmoil provided no further court appeals are made in the months to come. AMER GROUP: The touristic spa developer, which is behind projects such as Porto Sokhna and Porto Marina, is planning to launch an initial public offering (IPO) and a private placement this month to raise $300 million. According to financial weekly newspaper Al-Borsa, the firm will issue 400 million shares through a private placement and another 100 million shares in a public offering. The paper also reported that Amer Group is working with investment banks Beltone Financial and Prime Holding on the IPO. Amer Group sells holiday homes on Egypt's coasts and elsewhere. One of its projects is Golf Porto, covering 2.2 million square metres in the mountainous Ain Al-Sokhna area by the Red Sea coast. ORIENTAL WEAVERS (OW): The company has tapped into four African markets in 2010, increasing the number of countries where it has activities in the continent to 28 markets. On a less positive note, the company is currently facing problems because of 1.4 per cent rises in petroleum prices since the last week of August, bringing the cost to $82.39 per barrel last week. This hike has pushed the value of polypropylene imports up to $1,330 per tonne. Polypropylene is the main material needed to produce textiles, and it represents 50 per cent of the company's total expenses. Compiled by Sherine Abdel-Razek
