Trading suspensions on both Orascom Telecom and Mobinil together with the death sentence passed on real estate tycoon Hisham Talaat Mustafa moved the market through last week. The halt on trading of the two telecommunications companies' shares resulted in a lower volume of transactions through the early trading sessions of the week, back to less than the LE1 billion threshold it had crossed early May. Meanwhile, the four per cent decline caused by news of the death sentence passed Thursday stripped the market of its gains, pushing it away from the 6,000 points level it was steadily heading towards. On the macroeconomic level, news was not positive. Tourism revenues decreased by 13.2 per cent to $3.6 million in the first four months of 2009, the decrease largely attributable to a 60-70 per cent decline in tourism arrivals from Eastern Europe, where local currencies weakened due to the global economic crisis. TALAAT MUSTAFA GROUP HOLDING (TMGH): The company was the market's reluctant star last week with the death sentence of its former chairman and largest shareholder, Hisham Talaat Mustafa, taking the business community by surprise and leading to a downturn in share value of 14 per cent on the day the sentence was announced. A press conference held by TMGH immediately after the sentence was announced did not save share prices on that day but seemed to help share values rebound through the following sessions. During the press conference, Jihad Sawaftah, TMGH's vice president, said the group will not buy back its shares to bolster the market price, adding that the LE2.3 billion available in liquidity will go for finalising outstanding real estate and hotel projects. Swaftah told reporters TMGH is committed to delivering the units as scheduled and that the group will repay debts payable to the government and lenders at their due time. As for future plans, the company is moving on with its Saudi-based projects in Riyadh. The group plans to build 4000-5000 hotel rooms before 2014. The death sentence did not change the outlook for the company with CI Capital, the research arm of CIBC brokerage, putting the stock value at LE11.5, which is 155 per cent higher than its market value, placing a strong "Buy" recommendation for the shares of the developer. Swaftah ruled out the possibility that the group will issue bonds to finance future expansions, saying that the group has enough liquidity to be used in funding ventures. He added that its debt-to-equity ratio is ranging between around 1-12 per cent, enabling the company to secure more loans. ORASCOM TELECOM (OT): The Egyptian stock market decided to suspend transactions on OT's shares as well as its subsidiary Mobinil until the Capital Market Authority (CMA) studies the details of the latest offer by Orange Participation, a unit of France Telecom, to buy shares in Mobinil. The halt was still enforced by the end of Tuesday with the CMA requesting more documents from Orange. The French Telecom Group has submitted a tender offer to buy all the shares of Egyptian mobile operator Mobinil. The CMA refused to reveal the details of the offer. Orange's offer came after the CMA said that France Telecom should tender only to buy all shares in Mobinil as part of a court ruling that it purchase Orascom's stake in a holding company that owns 51 per cent of Mobinil. OT reacted to Orange's offer by appealing to a Cairo court declaring that the share sale agreement arising out of the arbitration award has been cancelled due to France Telecom's failure to pay the price of the shares by the time stipulated in the arbitration award. AL-SEWEDY CABLES: The largest cable producer in the Middle East announced the establishment of a low voltage power cables production facility in Aden, Yemen. The new facility will have a production capacity of 12,000 tonnes of cables per year. The new facility will cost around LE235 million, to be financed through a combination of debt to equity in the ratio of 70:30 per cent. The new facility should have a sales volume of around 6,000 tonnes of cables in 2009. El-Sewedy's new production facility will cater to the local market in Yemen making it the first cable producer in a market that relies totally on imports. Compiled by Sherine Abdel-Razek
