The market zigzagged in the final trading sessions of last week and the early ones of this week amid a lack of news both on the macro and microeconomic levels. According to the Ministry of Finance, Egyptian government spending fell 6.8 per cent in the last six months of 2009 to LE152.4 billion. However, the budget deficit widened to LE57.5 billion, or 4.9 per cent of gross domestic product, from LE36.1 billion a year earlier. "This rise in the budget deficit reflects a slowdown in local economic activity and the effect of the global financial crisis on the state's general budget," said the ministry in a statement. Public revenues and grants shrank by 25.8 per cent in the second half of fiscal year 2009-10 to LE94.7 billion. On another front, the government said it is planning to lease farmland for agro-business projects during 2010 but is waiting for the Agriculture Ministry to allocate suitable plots. The scheme is expected to yield LE66 billion by 2020. According to Minister of Trade and Industry Rachid Mohamed Rachid, the Agriculture Ministry has notified his ministry that some plots in Sinai, southern Egypt and the Western Desert could be allocated for the project. The project is based on leasing farmland with suitable irrigation facilities and ample space for manufacturing to Egyptian and foreign investors. The duration of the lease contracts will range between 40 and 99 years. The ministry has compiled a list of potential projects ranging from sugar factories to tomato paste manufacturing. THE EGYPTIAN COMPANY FOR MOBILE SERVICES (MOBINIL): The first tranche of the company's LE1.5 billion worth bonds issue was oversubscribed one and a half times. A statement issued by its underwriter, EFG- Hermes, said that institutions and high net worth investors placed orders for 21 million bonds, compared to the 14 million on offer. As for the second tranche, offered to retail investors and with a total value of LE100 million, EFG-Hermes noted that it was oversubscribed by 11.4 times. The bonds, which have a five-year maturity, will be used to finance the expansion of Mobinil's network and have a fixed annual yield of 12.25 per cent, paid on a six monthly basis. EZZ STEEL REBARS: For the third month in a row Egypt's largest steel producer in terms of market share increased its selling price for February contracts. Prices were raised by LE230 per ton to reach LE3,280. Other steel producers followed suit to bring the price in the market to LE3,200-3,400 per ton. The reason behind the increase, according to analysts, is the hike in billet and scrap prices, the raw materials used in steel production, amid a surge in global demand, especially from China. CI Capital saw the move as positive and that will enhance the company's bottom line; thus it maintained its "Strong Buy" recommendation for the company's stock. On another front, the company finalised an agreement with Banque Misr and the National Bank of Egypt to finance the establishment of an iron plant in Suez at an investment cost of $400 million. The production capacity of the new plant will amount to 1.9 million tonnes per year and will commence operations in the second half of 2011. ORIENTAL WEAVERS: Egypt's largest rug producer said in a statement sent to the Egyptian Stock Exchange that it is establishing a new plant for thread at an investment cost of LE250 million with an annual production capacity of 400,000 tonnes. The company said it expects its overall production of carpets to then reach 100 million square metres, compared to 69.65 million square metres at the end of the first nine months of 2009. The company is studying acquiring three Belgian factories. PALM HILLS DEVELOPMENTS (PHD): The local real estate developer signed a memorandum of understanding with Indian company Taj Hotels, Resorts and Palaces, to manage three PHD hotels on the north coast, Ain Al-Sokhna on the Red Sea and Aswan. The hotels will be deluxe five-star establishments, the first of which will be located in the company's north coast resort of Hacienda Bay. ARAB COTTON GINNING (ACG): The company is currently in final negotiations to acquire a number of companies about which no details were given. Hany Olama, the company's head, was quoted in press reports as saying that its financial results will witness a remarkable transformation in the current year after suffering severe losses in 2009. The company's work plan includes selling land plots in addition to seeking an alliance with a prominent real estate developer in order to develop land plots that will not be sold. Compiled by Sherine Abdel-Razek