Ready and able

The bourse welcomed its new trading system introduced last week, coinciding with a revival in trading activity. Sherine Abdel-Razek reports
The Egyptian stock exchange's new trading system has finally been launched -- a year and half after the originally set date. The new system, installed by the Canadian software company, EFA, is designed to encompass a wider range of traded instruments and facilitate integration with other bourses adopting the same system on both the regional and international levels.
A stock exchange press release points out that the system categorises stocks into liquid and illiquid, which will give a clearer picture of the trends followed by market main players.
A further phase of the system is expected to be launched soon and will open the door for introducing new financial instruments, such as futures and other derivatives. Trade in the Egyptian stock market is currently restricted to shares and bonds, with the former cornering the lion's share of transactions.
In the week ending 11 May, the value of traded securities came to LE427.9 million, LE94 worth of which were bonds transactions.
The value of transactions has picked up compared to the average for the previous eight weeks, a fact mirrored by a 5.99-point gain in the Capital Market Authority (CMA) index throughout the week.
This revival was fed by growing foreign interest. Foreign institutional and individual investors bought LE94.3 million worth of shares, compared to LE64.3 million of selling transactions.
MobiNil profited from the fact that market blue chips attracted many foreign buyers this week -- attributed by observers to a delayed reaction to a global recovery in telecom sectors worldwide -- breaking its share-level of LE60 to LE64 to end at LE68.24. Traders estimate that MobiNil shares could reach a price at the upper end of the LE70s by the end of the month.
The Media Production City's stocks have benefited from renewed rumours concerning the Saudi Arabian government's interest in the company. MPC's Chairman Abdel-Rahman Hafez was quoted as saying negotiations were underway with several international companies which are interested to buy into the company.
News that parliament is preparing to pass the long-awaited mortgage law, which is expected to stimulate the construction and property markets, thrust the housing and cement sectors into the spotlight last week. Members of parliament gave their preliminary backing to a mortgage bill expected to be passed by the third week of May. However, the lack of concrete news about plans to sell stakes in Helwan and Suez Cement have cut some of the cement sectors gains. Helwan ended the week LE4.39 lower at LE41. Suez was luckier, posting a marginal gain of LE0.49. While Helwan is offering an initial 47.9 per cent stake, Suez's tender offer for up to 25 per cent expires on 7 June.
State officials announced at the beginning of the week that four companies, including Portugal's Cimpor and France's Lafarge, have expressed interest in the government's stake in Helwan. This came after other officials were quoted in the previous week as saying that Mexico's Cemex and the Egyptian Cement Company (ECC) were also interested in the sale, and had toured Helwan's facilities ahead of an open offer bidding process which started on 1 May. However, none of the companies have yet made a firm bid for the stake.
ECC's parent company, Orascom Construction Industries (OCI), has announced that it has not submitted a bid for Helwan Cement. "We have requested information and have not made a final decision," OCI Chief Executive Nassef Sawiris said in a company results statement, which brought good news for OCI shareholders. It reported a 23 per cent jump in first-quarter net profits to LE74.0 million, compared to LE60.3 million in the same quarter of the previous year. The company's revenues for the three months ending in March rose to LE520.8, compared to LE458.5 million in the same quarter of 2000. OCI closed at LE34.55, gaining LE0.83.
Egypt's sole brewery, Al-Ahram Beverages (ABC), announced a share-incentive programme for new management with an allocation of up to 10 per cent of the company's 20.49 million outstanding shares. The programme is not expected to create any ownership dilution to existing shareholders as it will be exercised through occasional acquisitions of shares from the market under previously authorised share buy-back programmes.
Commenting on this initiative, EFG Hermes said, "We believe this new programme will have a positive impact on the company, as it will attract new high-caliber staff on the managerial level to join the company, as well as encourage them to enhance future performance." ABC shares closed at LE41.64, compared to LE41.25 at the beginning of the week.
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