"February syndrome" is what analysts call the seasonal decline in the market during the second month of the year, where economic activity is slow and the market is driven by sentiment. Trading sessions in the last week of February -- as well as those in early March -- reveal that the market is undergoing this syndrome. Closing in the red in most of trading sessions, the market returned to around 6,500 points after touching the 7,000-point threshold several times at the beginning of the month. On the macroeconomic level, the outcome of the International monetary fund's annual consultations with the Egyptian government, known as Article 5 consultation, came positive as shown by the IMF's report on the economy. "Economic performance was better than expected, although headline inflation remains elevated," noted the report which highlighted the fact that the authorities' objective of reducing the fiscal deficit to about three per cent by fiscal year 2014-2015 is critical to achieving private sector-led growth. To reach this end, the IMF advised Egypt to prioritise adopting the value added tax as early as possible, complementing energy subsidy reform with better-targeted transfers to the most needy, and containing the fiscal cost of the pension and health reforms. And while the report pointed that the adoption of such social-related reforms could be challenging with the approaching elections, It "encourages the authorities to continue taking measures such as strengthening tax compliance and reducing the cost of subsidy abuse, and also to resist pressures for additional spending. ORASCOM TELECOM: Naguib Sawiris, chairman of Orascom Telecom, told Al-Ahram newspaper that he explored the telecommunication market in Serbia during his visit to the East European country with Trade and Industry Minister Rachid Mohamed Rachid last week. Sawiris said he expressed his intention to join the market, due to good growth opportunities, in case of privatisation. As for negotiations with France Telecom (FT) over Mobinil, Sawiris said that, "unfortunately, talks with FT are on hold," stating that the continued dispute hit Mobinil's financial results, though he did not elaborate. PALM HILLS DEVELOPMENTS: The real estate developer posted better than expected results for its fourth-quarter profits and revenues. On the back of strong local demand, the company's net sales jumped more than threefold year-on-year to LE470.8 million, while net profits rose 63 per cent to LE185.1 million. New reservations stood at LE580 million in the fourth quarter of 2009, 31 per cent higher than a year earlier, when the global economic downturn slowed real estate sales in Egypt. Palm Hills, which builds mostly in Egypt's luxury segment, said last year it is tapping the economy housing market, in addition to expanding hotel and retail property ownership. AL-ARAFA INVESTMENT AND CONSULTING: The company sent a release to the Egyptian Stock Exchange on its new company, Swiss Company for Cotton Garments (SCG) located in the industrial zone in Beni Sweif and inaugurated this week by President Hosni Mubarak. According to the release, moving to Beni Sweif is part of the company's strategy to move gradually its factories to Upper Egypt. The initial phase will shift the group's casual wear production followed by formal operations as well. Phase one should also witness the inauguration of a shirt factory during the third quarter of 2010, with an annual capacity of three million units of high quality fine Egyptian cotton. The project's investment cost is LE50 million. Estimated revenue at project completion should be approximately $45 million. The release stated that company's revenues during the nine months ending in December 2009 hit $255 million, 22 per cent less than the corresponding period one year earlier, attributed in the release to the seasonality of the retail segment as well as the currency devaluation of the pound Sterling against the dollar. UK retail operations account for approximately 65 per cent of Al-Arafa's consolidated revenues. ORIENTAL WEAVERS: The leading carpet maker will be paying LE39.5 million for the land and assets of a local start-up textile firm to meet the recovery of demand in its export markets. The board of Oriental Weavers, the world's biggest machine woven carpet producer, approved the acquisition of Rosetex during a meeting last week. Rosetex's 65,000 square metres of land are located near Oriental's main facility in 10 Ramadan city. The company will finance the acquisition with its own resources and expects Rosetex's operations to start next year. Oriental Weavers sells 45 per cent of its goods on the local market and has an 85 per cent share of Egypt's carpet industry. It exports the remainder to more than 100 countries. MARIDIVE AND OIL SERVICES: The oil services company's 2009 net profit fell 2.3 per cent to $80.3 million. The results were better than expected with analysts projecting that sluggishness in the oil market would weigh down heavily on the company. For the fourth quarter alone, the company posted $26.1 million in profits. According to Reuters, the average forecast from five analysts was a profit of $20 million. The company's financial performance is expected to be better in the coming period due to the increase in oil prices. Analysts say most oilfield service companies have improved their cash positions after being hit last year by a collapse in drilling. The company reported earlier this week that it is searching for investment opportunities in West African regions and seeking to increase its business volume in North Africa. The company began work on contracts in India worth $180 million and on procurement for a $380 million Aramco contract at the Manifa offshore oilfield in Saudi Arabia. Compiled by Sherine Abdel-Razek
