The market's performance is mixed. A handful of negative news related to the traded companies stripped the EGX30 of a painful six per cent during the first two sessions of the week. However, it started to reverse its trend on Tuesday. The week started with the death of Kuwaiti billionaire Nasser Al-Kharafi, a big investor in Egypt and a major shareholder in the EgyptKuwait Holding Company. Then the index fell to a three-week low on Monday as a widening crackdown on graft by officials of former president Hosni Mubarak's government triggered further concerns for investment in the country. The prosecutor-general decided to put ex- prime minister Ahmed Nazif and former finance minister Youssef Boutros Ghali on trial after being charged with irregularities in procuring vehicle licences, costing the state about LE92 million in lost revenue. ORASCOM TELECOM HOLDING (OTH): The fourth quarter results of the company showed an increase in its net losses to reach $178.8 million compared to almost a third of this sum, $46.4 million, during the same period of the previous year. A statement issued by OTH attributed the loss to the impact of restrictions by the Algerian government on OTH's Algerian unit, Djezzy, as well as impairment losses related to its investment in Namibia, and its MedCable business in Algeria, the firm's trans-Mediterranean undersea cable. As for the 2010 full year results, OTH posted revenues of $3.8 billion with Djezzy, its biggest single source of revenue, posting a 6.5 per cent drop in its revenues to $1.747 billion. According to the statement, the Algerian government placed restrictions on Djezzy's operations including hindrance of promotions and a ban on imports including of SIM cards. The dispute over Djezzy has complicated a $6 billion- plus deal in which Russia's VimpelCom is taking control of OT and its parent, Wind Telecom, from Egyptian tycoon Naguib Sawiris. The deal was finalised on Friday creating the world's sixth-largest mobile provider. The company whose subscribers in December reached 101 million across the globe said it had an increase in revenues in its units in Pakistan, Bangladesh, Africa and North Korea as their subscriber bases grew. ORASCOM DEVELOPMENT: The Real estate and hotels firm expected hotel revenues to drop by about a third in 2011 partly due to unrest in Egypt and elsewhere in the Arab world. "The turmoil in Egypt and the Arab world reduced visibility of the business in 2011. The number of flight connections offered is still subdued and only to change over time," the firm said in its annual earnings statement. "As a consequence, we expect to see hotel revenues to drop by around 30 per cent year-on-year in 2011." Orascom, which is listed on the Swiss exchange, witnessed an 11 per cent year-on-year decline in its net profits to 94.9 million Swiss francs. The largest contributor of revenue in 2010 was Egypt, representing 74 per cent, followed by Oman at 16 per cent. Hotels made up 37.4 per cent of total revenue in 2010 and real estate and construction 44.4 per cent. Moreover, appreciation in the Swiss franc reduced total sales by five per cent, according to the company's earnings statement. Orascom has proposed paying a dividend of 0.65 francs per share. The firm expected its international operations to continue without interruption, cushioning declines from the Middle East region. Its first quarter real estate pre-sales were in line with the same period last year. The firm, which has projects in the Middle East and Europe in addition to its main base in Egypt, uses the pre-sale of homes as a main source of finance. In 2010, its hotel revenues rose five per cent to 193.1 million francs mainly due to higher occupancy rates and increased turnover per customer. EGYPTIAN COMPANY FOR TOURISM RESORTS (ECTR): The company decided to remove Ibrahim Kamel, a senior member of Mubarak's National Democratic Party, from its board, without citing a reason. Kamel is now under detention on charges of inciting thugs to attack protesters in Tahrir Square, the site of demonstrations that ousted Mubarak. Kamel used to represent Kato Investment, which he chairs, on ECTR board. Kato has a 12 per cent stake in ECTR. Kamel previously served as the chairman of Egyptian Resorts and is the father of the chief executive, Mohamed Ibrahim Kamel. The company's stock has lost over 47 per cent of its value since the start of the year as the company reels under a legal challenge over a state land sale for its main plot of land on the Red Sea. On Thursday, the Tourism Development Authority withdrew its approval for a project Egyptian Resorts is developing at Sahl Hasheesh along the Red Sea coast. The firm said it would contest the decision. Egyptian Resorts paid $7.6 million, or 27 per cent of the land's contract value and paid a further $5.3 million in rent and other costs. According to Reuters, the firm, which makes most of its money selling land to developers, has not sold any since the third quarter of 2008, when the global financial crisis dampened appetite for big real estate purchases in Egypt. CITADEL CAPITAL: The company's stock has been reacting negatively to news of banning its chairman, Ahmed Heikal, from travel pending a probe of corruption allegations. As a means to contain the losses, the company released a statement clarifying that it did not purchase Helwan Portland Cement Company (HPCC) from the government of Egypt or any entity related to it. There are accusations that Citadel bought the cement company when privatised with a very cheap price. The statement clarifies that Citadel bought 50 per cent of the company in 2004 from the Arab Swiss Engineering Company which had bought it three years earlier from the government. Moreover, the statement added that Citadel Capital did not exist as a firm when Helwan Portland Cement Company was privatised. Citadel Capital was formed on 13 April 2004, while Helwan Portland Cement Company was sold to the Arab Swiss Engineering Company in September 2001. EFG-HERMES: The investment bank's board member and head of brokerage Sherif Cararah resigned for what a statement sent to the stock exchange called family reasons. The resignation comes as widening investigations into charges of corruption by businessmen and government officials under the previous government are causing fears through the local bourse and observers say that EFG-Hermes might face allegations as it has been involved in a number of the country's privatisation deals thought to be executed at very low prices. EFG-Hermes has come under the spotlight for its association with Mubarak's son Gamal, who owns 18 per cent of the investment bank's subsidiary EFG-Hermes Private Equity. The subsidiary generates no more than seven per cent of EFG-Hermes Holding's total revenue, EFG has said. Chief Executive Yasser El-Mallawany confirmed Cararah's resignation, saying it would help reduce costs. "It was a normal succession. It was planned last year," he said. "He managed to make EFG- Hermes a better place during his 15 years here."
