By Sherine Abdel-Razek The market extended gains through the early sessions of this week on the back of news that the G8 as well as other donors are offering aid packages to the local economy, barely hit by the repercussions of 25 January. The market jumped to a two-month high on Sunday and continued in the green territory on Monday, with the EGX30 closing at 5,590 points. The market losses since the beginning of the year narrowed to 21 per cent compared to 32 per cent soon after the revolution. News on the macroeconomic level is less gloomy than previous weeks. Hisham Ramez, deputy governor of the Central Bank of Egypt (CBE), said that the CBE expects foreign currency reserves to decline at a slower pace this month than April's $2 billion drop. The reserves lost $8 billion since the end of January. On another front, Egypt plans to sell $1 billion in five-year Eurobonds in 2011 to diversify borrowing, and finance a widening budget deficit. Bloomberg reported that the Eurobond will be backed by a US "sovereign guarantee" as part of the aid package announced by US President Barack Obama on 19 May. 6 OCTOBER FOR DEVELOPMENT AND INVESTMENT COMPANY (SODIC): The real estate developer posted a 48 per cent decline in its contracted sales in the first quarter of 2011 compared to the same period last year. Analysts attributed the decline to investors being nervous about buying new units during the political turmoil. SODIC said it is on track to deliver 500 units during 2011. The company reported an increase in its net loss to reach LE16.1 million during the first quarter compared to a loss of LE10.9 million a year before. According to Beltone, the decline in new contracted sales, slower deliveries and net loss is because of the absence of sufficient deliveries in the first quarter as the political uprising in Egypt led to delays in construction and handover of units during February and March 2011. SODIC does not fully recognise its revenues until the company delivers the unit to its clients. Beltone described the company's financial position as strong, with its cash reaching LE816 million at the end of the quarter which witnessed it collecting more than 90 per cent of its receivables. OLYMPIC GROUP (OG): The white goods line of business shouldered a net loss of LE35.8 million as opposed to a net profit of LE56.3 million in the first quarter of 2010, worse than the analysts' expectations which did not foresee losses in the first place. Moreover, it suffered from a 50 per cent drop in sales in Egypt and 36 per cent in export markets due to the events which took place in the region. A number of factors contributed to the loss, including using less than 40 per cent of the group's production capacity, and a sharp rise in commodity prices. Swedish white good manufacturer Electrolux had decided to put its negotiations to buy the group on hold at the outbreak of the revolution, only to resume it two months ago without reaching an agreement. EL-SEWEDY CABLES: The company will distribute a dividend of LE1 per share. This came after it said in April it will be distributing both cash and stock dividends. There is no mention so far of any stock dividends. The cash dividend amounting to LE172 million implies a dividend payout of 22 per cent on fiscal year 2010 earnings. El-Sewedy Cables is used to distributing LE1 per share. The company last week reported its first quarter results which showed a 76 per cent in its net profits when compared with the fourth quarter of 2010 and a 32 per cent decline. Housing Development Bank (HDB): The planned merge between the bank and state-owned Egyptian Arab Land Bank is cancelled. The two banks were both being restructured in preparation for a possible merger sometime before the end of 2012, a move that would have created Egypt's sixth or seventh biggest commercial bank. The government owns over 60 per cent of HDB. The market received the news with content and Beltone noted that the news is positive for HDB as it was starting to reap the fruits of being fully restructured in the past few years, and the merger with would have delayed HDB's progress and burdened it with the ensuing post-merger challenges. EFG-HERMES HOLDING: The region's leading investment bank acquired the approval of the Egyptian Financial Supervisory Authority to raise its capital by LE300 million by issuing one free share for every 10 held. According to an EFG note, it plans to use the funds to finance the acquisition of commercial banking licences in the region. EFG-Hermes bought last year a 65 per cent stake in Credit Libanaise for $542 million to expand its operations in commercial banking, with an option to buy 25 per cent over the following two years. PALM HILLS DEVELOPMENTS (PHD): The company invited other developers in the Egyptian market to bid for executing its project, Village Gardens Katameya, at an area of 285,000 square metres with an expected cost of LE600 million. Companies withdrawing terms of reference included Orascom Construction Industries (OCI), Hassan Allam, and SIAC. According to Arab Finance, today is the deadline for submitting bids from contractors, although some of them requested to extend it until mid-June. ORASCOM TELECOM HOLDING (OTH): The company's soon-to-be-spun-off unit, Orascom Telecom Media & Technology (OTMT), started negotiations with banks, including NSGB, HSBC and CIB, to acquire a $350 million loan, to finance its new obligations. OTMT was established as a part of the merger deal of Wind Telecom, owner of 50 per cent of OTH, and VimpelCom, with the purpose of holding OTH's assets that are not intended as part of the new group. On a different level, Algeria's Prime Minister Ahmed Ouyahia said in a media briefing the valuation of OTH's Algerian unit Djezzy is almost complete and that the Algerian state will buy Djezzy once the valuation is done. Compiled by Sherine Abdel-Razek
