The market's small shares index, EGX70, was hit hard last week, registering its highest daily decline in two months after Stock Exchange management suspended trading on 26 small- and medium-sized companies for unjustified hikes in their prices. The suspension, which included Egypt Contracting, Mokhtar Ibrahim, Rakta Paper Manufacturing, GMC Group for Industrial Commercial and Financial Investments, and Nile Matches, was attributed by the Exchange to a "lack of material events" justifying the gains in share values. Price increases for some shares exceeded 120 per cent, as was the case of Mokhtar Ibrahim, which soared by 127 per cent while Rakta soared almost threefold. "We have some cases of speculation and some cases of manipulation," Maged Shawki, head of the Cairo and Alexandria Stock Exchange told the Bloomberg News Agency. The suspended companies were required by the bourse to disclose their future plans and submit reports by independent financial advisers on the fair value of their shares in order to trade again. The second requirement raised reservations among market observers and analysts, given that such a procedure could take up to two months to complete. While regaining some ground by the end of the week, the index on Monday was 2.1 per cent lower than its opening level on 11 October, when the bourse started to suspend share trading. On the other hand, the EGX30 jumped to 7,119 points Monday to reach its highest closing level since the beginning of the year. ASEC MINING: The mining arm of the private equity group Citadel Capital bought 10 per cent of the London-listed GMA Resources that explores for gold and runs mines in Algeria. "This agreement follows the company's policy on precious metals, which includes a plan to explore for gold in Ethiopia," Asec said in a statement sent to the Egyptian Exchange. The deal, valued at 1.9 million pounds Sterling, will give the Egyptian company the right to manage the operation of an Algerian gold mine held by GMA Resources. The mine produced 510.3 kilogrammes of gold in the first half of 2009. An Asec Mining senior official was quoted by news agencies as saying, "[GMA] doesn't have enough money, and they don't have a mining plan, and we are specialised in this." Asec has broad operations in geology, mining and manufacturing across the Middle East and North Africa. It manages gold mining and exploration projects in Sudan, Ethiopia and Libya. TALAAT MUSTAFA GROUP (TMG): The largest listed real estate developer revealed plans that it will start construction of its Saudi based project, Nasmat Al-Riyadh, in 2010, putting the value of expected sales at 10 billion riyals by 2015. The project is a compound, similar to TMG's Cairo-based Al-Rehab area, and the currently under construction Madinaty, and will include villas and apartments along with community services such as schools and clinics. TMG's chief financial officer, Jihad Al-Sawaftah, told Bloomberg last week that prospects for growth in Saudi Arabia are strong, partly because only 25 per cent of residents in the kingdom are homeowners, and young people represent more than 65 per cent of the population. Al-Sawaftah expects TMG's sales and net income in the fourth quarter of 2009 to be better than the same period a year earlier, noting that the results of the third quarter will be similar to the preceding three months. The company reported revenue of LE1.6 billion for the second quarter of 2009, with LE320.5 million in net profits during this period. GHABBOUR AUTO (GB AUTO): The biggest independent automotive assembler and distributor in the Middle East plans to issue LE1 billion worth of bonds. The purpose of issuing the bonds is to fund capital expansion and the company's investments in the transport sector in Egypt and countries in the region, according to a statement sent to the local exchange. The company, the wholesale distributor of Hyundai cars in Egypt, has also decided to set up a subsidiary to finance the acquisition of three-wheeled hybrid vehicles (Tuk-Tuks). Ghabbour Auto sells cars, buses, trucks, trailers, motorbikes and tires. It reported a 72 per cent decline in second quarter net income in August, based on low car sales. Compiled by Sherine Abdel-Razek
