The market is hitting new lows, zigzagging between moderate gains and steep daily declines following an international trend overcast by fears of recession. The current trading week saw the market make serious losses. The CASE 30 index fell by almost 12 per cent in the first trading days of the week, to end Tuesday's transactions at 4205.99 points, the lowest in over three years. Market experts believe the decline through the week took place as a result of foreign investors abandoning the blue chips to balance their positions on local and foreign markets. The week also witnessed the release of the results for the first nine months of a number of the market's heavyweights, which were mostly in the black and surprisingly failed to pull the market out of its seemingly bottomless downward trend. On the macroeconomic level, news was not positive either. The over-publicised new asset management programme remains vague to both experts and laymen, and is adding obscurity to the already tense financial environment. On a further negative note, Ahmed Ali Fadel, chairman of the Suez Canal Authority, declared that traffic through the canal has started to show signs of a global economic slowdown as the volume of goods passing through the water passage fell. Fadel did not give exact figures but asserted recession would not affect the Canal Authority's plans to deepen the canal's navigation channel from 62 to 66 feet, allowing bigger ships to pass. ORASCOM TELECOM HOLDING (OTH): The regional mobile network operator shouldered a 72 per cent decline in its net profits for the quarter ending September 2008, to reach LE414.4 million. Meanwhile, the number of subscribers grew by 22 per cent compared to the same period last year, reaching 79 million subscribers. The number of subscribers in the Bangladeshi network Benglalink recorded the highest increase, at 68 per cent. Meanwhile, MobiNil also succeeded in expanding its subscriber base by 38 per cent. During the third quarter, Benglalink surpassed the 10 million subscriber mark, while Tunisiana managed to expand its subscriber base to become the leading player in Tunisia. In addition, the average revenue per user (ARPU) has increased in Algeria, Egypt and Bangladesh, and was relatively stable in Tunisia during the third quarter. The decrease in ARPU in Pakistan is mainly due to the depreciation in the Pakistani rupee against the US dollar, as well as rising inflation and an increase in sales tax which has further impacted consumer spending, according to an OTH press release. In July 2008, Telecel Globe, a majority- owned subsidiary of OTH, finalised the acquisition of telecom operators U-Com in Burundi and Telecel in the Central African Republic, both with high growth potential. Burundi has a population of approximately 8.7 million, of whom 51 per cent lie in the high usage age group from 15-64 years, and a mobile penetration of four per cent at the end of 2007. Meanwhile, the Central African Republic has a population of 4.4 million and a mobile penetration of 6.2 per cent as at the end of last year. ORASCOM CONSTRUCTION INDUSTRIES (OCI): The regional construction giant posted a near-fourfold increase in third-quarter net profit thanks to higher fertiliser revenues. Revenue for the quarter rose 75 per cent to $991.9 million. Though impressive, the results came to less than analysts' expectations due to a foreign exchange loss and slower-than- expected construction revenues. The company posted a foreign exchange loss of $21.7 million in the third quarter. The company's construction line of business contributes to the sales by $737 million, a figure that is expected to increase by 50 per cent, according the OCI Chairman Nassef Sawiris, fed by more infrastructural spending in the Gulf Arab region. On the other hand, revenue from OCI's fertiliser line of business came at $255 million. The average fertiliser selling price from its subsidiary, Egyptian Fertiliser, surged to $758 per tonne of urea in the third quarter, compared to $515 in the second quarter. OCI divested its cement unit to the French Lafarge group last year to focus on fertiliser production in Egypt, Nigeria and Algeria. TELECOM EGYPT (TE): Egypt's sole fixed line operator posted a 28.5 per cent increase in its profits after tax in the nine- month period ending September to reach LE2.2 billion. More significantly, the company's net profit for the third quarter alone soared by 40 per cent in the second quarter of 2008 compared to its level a year earlier. The company's retail revenue was put under pressure during the first quarter of the current year due to a growing fixed-to- mobile substitution trend amid aggressive campaigns launched by mobile operators. However, the recent tariff-rebalancing programme, introduced in July, has enabled TE to offset the negative impact of competition. Commenting on the results, Beltone financial said that despite the marginal 0.2 per cent increase in sales figures through the nine-month period, "it signifies improved revenue performance since it managed to offset the year on year 1.5 per cent decline in the first half of the year." It further forecasts sales revenues to reach LE10.262 billion by the end of December 2008 and LE12.165 billion by the end of December 2009, as the full effects of the tariff rebalancing takes place and proceeds from TE North, the maritime cable it is currently setting up, start kicking in. NATIONAL SOCIETE GENERALE BANK (NSGB): NSGB realised a 57 per cent increase in its net income in the first nine months of 2008 to reach LE797 million. The nine months' net income was boosted mainly by the recovery from loan and probable tax claim provisions of LE327 million, booked in the second and third quarters. Excluding the recoveries, net income would have declined seven per cent in these nine months, resulting from higher booked provisions and higher income taxes. Compiled by Sherine Abdel Razek
