The market is showing evidence of recovery with its main index EGX30 breaking resistance levels and hovering around 5,600 points, its highest level since the end of October 2008. In its regional monthly report, EFG-Hermes noted that the local market rallied in March and April with its Hermes Financial Index rising by 40 per cent. Average daily value of transactions, according to the report, rose sharply in April to LE1.36 billion, up from LE626 million in the first quarter of 2009. Activity in smaller caps doubled in both March and April, reflecting the increase in individual transactions, or retail activity. ORASCOM DEVELOPMENT HOLDING (ODH), the Swiss parent company of Egypt- based Orascom Hotels Development, held its first general assembly meeting last week. The meeting decided to reduce the share par value to 24.5 Swiss Francs from 25 Swiss Francs and to return the difference to shareholders as dividends. The dividend is the first to be distributed by ODH, incorporated last year and listed in the Swiss Stock Exchange, which refrained in the past to distribute profits while it had several projects under development. Commenting on the move, EFG-Hermes said that the overall amount of the dividend would put no pressure on ODH's cash balance that reached 177 million Swiss Francs at the end of December 2008. The meeting also decided to create and list local depository receipts for shares listed in Switzerland, denominated in Egyptian pounds -- what it dubbed Egyptian Depository Receipts (EDR). The move aims at increasing the liquidity of ODH traded shares by providing Egyptian holders of the company shares to trade in pounds rather than Swiss Francs. ORASCOM CONSTRUCTION INDUSTRIES (OCI), the regional construction company, was awarded a $280 million contract for construction work on Al-Merk gas processing facility in Algeria. In a statement, OCI said a joint venture with Bentini of Italy had won the contract for infrastructure and building at the plant. OCI separately won a $170 million contract for civil and structural steelwork there. The required steel will be supplied by National Steel Fabrication, a subsidiary of OCI, from its production plants in both Egypt and Algeria. THE HOUSING AND DEVELOPMENT BANK (HDB) extended the due diligence deadline to Damac-Egypt to the end of May. The delay followed a lack of clarity on specific issues in due diligence, according to local newspapers. The concerned consortium with HDB holding 30 per cent stake also includes the Egyptian Arab Land Bank at 20 per cent and the Holding Company for Investment & Development (majority owned by HDB) at 10 per cent. The proposal of due diligence, which commenced the end of February, is the potential acquisition of a 60 per cent stake in the shares of Damac's subsidiary. THE EGYPTIAN COMPANY FOR MOBILE SERVICES (MOBINIL) is offering a new business scheme called "Business Buckets", which provides five different packages -- or "buckets" -- called "100", "250", "500", "1,000" and "2,000" for monthly fees ranging from LE25 to LE500. The offers come after MobiNil's usage levels declined by 10 per cent in the first quarter of 2009, especially at the corporate level, due to the slowdown in economic activity in Egypt. CI Capital issued a report last week advising investors in MobiNil to shift to Telecom Egypt whose fourth quarter results, to be announced today, are expected to be better than that of MobiNil as Telecom Egypt will benefit from Vodafone Egypt's higher profit margins compared to that of MobiNil. A Reuters report quoted an EFG-Hermes senior analyst as saying that mobile telecom firms in Egypt will see growth in subscriber numbers cut by a third this year as the market for mobile phones approaches saturation. The analyst expected eight million new subscribers to be added to Egypt's three mobile operators in 2009, after 12 million subscribers were added in 2008. "We assume market saturation in Egypt will be at 80 to 85 per cent [of the population]. The mobile penetration rate was at 55 per cent at the end of 2008, and there is still room for growth but it will take until 2015 or 2016," the analyst told Reuters. EASTERN TOBACCO: CI Capital cut the stock long-term fair value by 11 per cent from LE306 to LE273, due to the increase in its capital expenditures by LE1.8 billion. However, the company kept its buy recommendation for the stock. On the other hand, HC Securities fixed target prices at LE240.9, which is 45.9 per cent higher than its market price of LE165.1. Compiled by Sherine Abdel-Razek
