With the yearend coming to a close and the Christmas season here, the market is witnessing a lot of selling orders with both local and foreign investors liquidating their positions before the seasonal lull usually seen in all stock markets at this time. While news on the micro level was scant last week, many developments occurred on the macro level. Egypt's main water gateway, the Suez Canal, said it will keep its transit tolls unchanged in 2010 for the second straight year, as a result of the global financial crisis. Reuters quoted an unnamed source from the Suez Canal Authority as saying that "most of the members of the board decided to leave the transit tolls unchanged. Suez Canal authorities will continue to give discounts and other advantages to some types of ships, such as oil and gas tankers, tourist boats and long line vessels," the source said. Meanwhile, the state-owned Transport and Engineering Company (Trenco) is planning to build the biggest car tire factory in the Middle East at a cost of LE600 million. The new factory will be capable of producing half a million tires annually. It will take two years to be built and will be located in Amerya, west of the Mediterranean city of Alexandria. Another industry-related development was Egypt inviting India's Tata Motors to build a factory to make the Nano, the world's cheapest car. Tata launched the Nano in March and is expected to take it to Europe by 2011 and to the United States thereafter. TELECOM EGYPT (TE): The country's fixed line monopoly needs to provide mobile services to compensate for declining landline subscriptions, according to press reports quoting the company's vice-president. The company's fixed line subscribers fell 15 per cent to 9.6 million by the end of September with the three currently operating mobile companies attracting more customers with attractive and inexpensive packages. The number of mobile subscribers in Egypt surged to 53 million in October from 39.1 million a year earlier. To compensate, TE is offering a further reduction in its long distance call fees. On another front, Tareq Kamel, minister of communications, said Egypt is working on a $1 billion plan that will include increasing broadband penetration fourfold in the next four years to four million households. Most of the investment, according to Kamel, will be allocated to increasing local capacity. The investment would include a combination of wireless, wired and mobile services in both rural and urban areas, Kamel said. Egypt has invested in international broadband cables that will double or triple capacity coming into the country starting in the second half of 2010. BELTONE CAPITAL: The private equity unit of Beltone Financial said it would double its capital to LE932 million in four stages to support investments and expansion, a company statement noted. The first stage of the capital increase will be conducted through a subscription of old shareholders of "25 per cent of their existing paid-in shares," the statement added. The company also announced that this first tranche would be used in buying a tourism company. THE EGYPTIAN COMPANY FOR MOBILE SERVICES (MOBINIL): The company has appointed Prime Capital as an independent financial advisor to evaluate France Telecom's offer to buy the company, statements said. Prime Capital is to submit an evaluation of the offer before 5 January. Mobinil will then announce the results of the evaluation before 9 January. The company is at the centre of a long dispute between its two main shareholders, Orascom Telecom and France Telecom, which led to an international arbitration ruling in April that France Telecom buys the stake of Orascom Telecom (OT) in Mobinil. The last six months witnessed the French group submitting four tender offers to buy OT's as well as free floated shares in Mobinil. The Egyptian stock market regulator rejected the first three offers and approved the last, which valued Mobinil shares at LE245. The offer for the shares ends at the close of trading 14 January. The price that the arbitration court set for Mobinil's shares was LE274. Executives from both companies met at the end of last week to discuss the ownership row, and Orascom issued an appeal later saying the price differential was based on false assumptions. "[Orascom Telecom] has requested the annulment of the authority's decision because it is not made in accordance with the law and contradicts the principles of equality and equal opportunity between the shareholders," Orascom said in a statement. ARAFA HOLDING FOR INVESTMENT AND CONSULTANCIES: Egypt's largest garment exporter reported a consolidated net profit of $5.99 million for the nine months ending 31 October. As the company changed its financial year to end in January instead of March, there is no direct comparison. For the nine months to 30 December, Arafa reported net profits of $26.9 million. Commenting on the results, CI Capital said that the company realised growth in turnover on all its lines, but mainly through a rise in the retail and textile segments by 18.1 per cent and 25.5 per cent respectively. "We believe that the market has been improving slightly from the beginning of the year, which had witnessed a decline in consumer spending following the [global economic] crisis. The fourth quarter of the company's fiscal year, ending in January 2010, should be the strongest quarter as it incorporates the strongest two months of the year, where sales should be boosted by Christmas and vacation offers," stated a CI Capital report on the company's results. THE COMMERCIAL INTERNATIONAL BANK (CIB): The leading private commercial bank is witnessing another change in its shareholders' structure. New York-based Ripplewood has sold its remaining 4.7 per cent stake in the bank. This move follows it selling 50 per cent of the stake originally held by the Ripplewood consortium to the private equity firm Actis in July 2009. Actis is now the single largest shareholder in CIB with a 9.3 per cent stake. ORASCOM DEVELOPMENT HOLDING (ODH): The Swiss-based company will establish two new hotels with a total investment cost of LE200 million each. The new hotels are expected to cover an area of 2,000-2,500 square metres each with one located near Cairo International Airport, while the other will be in 6 October governorate. Compiled by Sherine Abdel-Razek
