The market ended most trading sessions last week in the green, with Egyptians seemingly regaining some confidence in the market amid relatively positive 2008 earnings posted by most of the market's heavyweights. By the end of Monday's transactions, EGX 30 -- formerly known as CASE30 -- gained around 12 per cent on its levels at the beginning of March. The average value of daily transactions hovers around LE800 million, exceeding the LE1 billion threshold several times through the last 10 days, a level that had not been seen in the market since mid-2007. Meanwhile, news on the macroeconomic level proves that the global financial crisis has started to hit the local economy hard. Suez Canal revenues declined by 26 per cent in February, as compared to February last year. A production index prepared by the Ministry of Economic Development covers around 60 per cent of total economic activity, according to the ministry. This index retreated 9.5 per cent in January after dropping 4.5 per cent in December, mainly because of contractions in the manufacturing, tourism and Suez Canal sectors. This means that the growth rates of different sectors of the economy are declining. Minister of Investment Mahmoud Mohieldin expected Egypt's real GDP growth to range between three and four per cent in the current fiscal year. However, he stated that the government is implementing an incentives and fiscal stimulus package that targets five per cent growth. ORASCOM CONSTRUCTION INDUSTRIES (OCI): The region's leading contractor was awarded a $285 million contract by the state-owned West Delta Electricity Production Company to build the new Abu Qir thermal power plant. OCI's Construction Group is currently performing construction services on numerous power plants in Egypt and Algeria, with a total power generation capacity of 4,150 Mega Watt. On a separate note, OCI's board of directors approved the distribution of the equivalent of one dollar per ordinary share as a full year dividend for the year ending December 2008. AL-EZZ PORCELAIN: The ceramics and porcelain tiles manufacturing arm of Al-Ezz group posted a 4.6 per cent growth in profits for 2008 to reach LE10.1 million on sales of LE356.5 million, 13.8 per cent higher than its level in 2007. TELECOM EGYPT (TE): The country's fixed line monopoly made an offer to acquire the local payphone company, Menatel, one of the three local payphone companies, with a market share of 57 per cent. TE already owns another payphone company Marhaba, which has a 9.6 per cent share of the market. TE also holds 3.8 per cent of Menatel Equity. If TE's offer is approved by Menatel, which has a network of around 30,000 payphones, the former will have a market share of 67 per cent. Commenting on the news, Ci Capital, said that it anticipates immaterial value added from such acquisition due to fierce competition in the mobile market. However, Ci Capital said that albeit TE could indirectly benefit of mobile-related services provided by Menatel's fully-owned subsidiary Connect, which is a distributor of GSM scratch cards, smart cards and electronics. Menatel's chairman was quoted in the local press as saying that there is another acquisition offer, though he did not provide further details. ORASCOM TELECOM HOLDING (OTH): In a conference call to discuss its results for 2008 the company's management said that the 7.4 per cent overall average return per user decline for year 2008 is due to both an overall increase in OTH's subscriber base and the devaluation of currencies of countries where it operates networks against the US dollar. The management added that it has incurred significant Forex losses of $122 million in the fourth quarter of 2008. However, all of these FX losses were unrealised, since they reflected the market value difference of debt held in currencies other than the US dollar. According to the management, the operational environment in Pakistan remains shaky for the duration of 2009, a fact Beltone Financial attributed to the local currency devaluation against the US dollar, rising utility costs and the challenging economic environment within Pakistan. THE EGYPTIAN COMPANY FOR MOBILE SERVICES (MOBINIL): The company's general assembly decided to distribute a cash dividend of LE3.06 per share for 2008 profits, pushing the overall dividends distributed throughout the year to LE12.68 per share. Mobinil had already paid cash dividends of LE6 per share in September 2008, and LE3.62 per share in January 2009. This pushes the payout ration of distributed dividends as a percentage of posted profits, to 64.4 per cent compared to 91.5 per cent for 2007, a decline that Beltone Financial attributed to "Mobinil adopting a stricter dividend policy and seems to want to conserve its cash given the current trading environment." BANK OF ALEXANDRIA (BA): Egypt's first publicly owned bank to go private witnessed another change in its shareholder structure with the International Finance Corporation (IFC), the investment arm of the World Bank, investing $200 million to buy a 9.75 per cent stake in BA's equity funds. IFC bought the stake from Italy's Intesa Paolo which acquired an 80 per cent stake of the bank in 2006, for $1.6 billion. The equity investment is IFC's largest in Egypt and its second-largest globally. IFC has been involved in the Egyptian financial sector as it helped establish the country's first private housing finance company, its first mortgage refinance company, and its first credit bureau. Compiled by Sherine Abdel-Razek
