After showing limited signs of recovery on Thursday and Sunday -- thanks to positive results by a handful of listed companies and an increased demand on shares of the Talaat Mustafa Group -- the market headed south again on Monday, with CASE30 closing with 8,233 points. The short-lived revival raised hopes after the market shouldered its heaviest loss in a year during the trading week ending 14 August. The CASE30 index, tracking the performance of the 30 most actively traded companies, lost 7.3 per cent during its last week, to reach its lowest ever level since September 2007. The decline came on the back of a selling spree by foreign investors which were net sellers through the week, with a net selling value of LE402 million. Wafd Party MP Mohamed Mustafa Sherdi last week made a petition to the prime minister and minister of finance's offices, calling for investigations into the reasons behind the market's nose dive. CASE30 has lost more than 25 per cent of its value since May. Initial analyses indicate that Monday's decline is partly attributed to Fitch Ratings downgrading its outlook for Egypt's long-term foreign currency Issuer Default Rating, from positive to stable, reflecting the challenges facing Egypt due to inflation pressures and the slow- down in fiscal deficit reduction. The move is feared to increase downward pressures on the market, especially from foreigners who depend on such ratings. The macroeconomic level, however, delivered some positive results through the week. Total tax revenues increased to 116.2 billion in fiscal year 2007-2008 ending June. Sales tax contributed to the sum with LE40 billion, while income tax revenues came to LE76.2 billion. Moreover, Egypt's Suez Canal revenues rose from $406.3 million in July 2007 to $490 million in July 2008, marking a 21 per cent increase. COMMERCIAL INTERNATIONAL BANK (CIB): Egypt's leading private sector bank posted a 45 per cent increase in its net profits in the first half of 2008 to reach LE961.7 million. Results were inflated by a one-off LE50.3 million income from selling the bank's subsidiary Contact Cars in addition to cancelling LE95.1 million of obsolete provisions and a LE148.9 million boost from selling financial investments. Moreover, the hike was fed by an impressive 53.3 per cent increase in the bank's net interest income during the past six months, compared to the corresponding period last year. According to a note issued by HC Securities, a regional investment bank, CIB's net interest income strength is rooted in the fact that it has managed to maintain a fairly stable level of interest expenses over consecutive quarters, while growing its deposit base. Deposits from other banks alone grew by 40 per cent, reaching LE14.7 billion. In related news, Sahar El-Sallab, CIB's vice- chairman, managing director and one of the bank's most prominent officials will retire effective 30 September this year. TELECOM EGYPT (TE): Egypt's sole fixed line operator released its results for the first half of 2008, realising a net income of LE1.24 billion compared to LE1 billion in the first half of 2007. The company's total subscriber base reached 11.27 million, recording a 2.8 per cent increase from the first half of 2007. The increased Egyptian dependence on mobile communications was reflected in a 1.5 per cent drop in total consolidated revenues, totalling LE4.8 billion, as it affected retail revenue negatively. However, the increase in mobile traffic has benefited TE due to the ongoing demand from mobile operators on TE's leased infrastructure. Accordingly, wholesale revenue increased by 3.7 per cent from LE1.83 billion to LE1.9 billion. VODAFONE EGYPT (VFE) which is 25 per cent owned by TE, has contributed 49.1 per cent to TE's bottom line. TE's investment income from Vodafone was LE607.4 million in the first half of 2008. Vodafone Egypt's subscriber base reached 15.2 million in June 2008, compared to 11 million subscribers in June 2007. In related news, Aqil Beshir, TE's CEO, announced that TE will not merge with its Internet services subsidiary TE Data. Beshir was also quoted as saying the company is willing to spend at least $1 billion to acquire an existing mobile and fixed line operator in the Middle East, Africa or Eastern Europe. EFG-HERMES: A joint venture of EFG-Hermes and Kuwait Investment Holding acquired a 90 per cent stake in Kuwait's Gulf Brokerage. The deal is valued at $252 million, while EFG-Hermes's stake is worth $126 million. Gulf Brokerage is ranked second among Kuwaiti brokerage companies with a market share of 26 per cent and a net income of $11.1 million in the first half of 2008. Moreover, the investment bank acquired a 9.06 per cent stake in the UK-based brokerage and investment bank Panmure Gordon & Company in a deal worth �16 million. EFG posted a 34.2 per cent increase in its net income during the first half of 2008, compared to the first six months of 2007, to reach LE757.7 million. Growth stemmed from a 7.9 per cent increase in operating revenues to LE1.26 billion, boosted by improvements in its asset management line of business. ORASCOM TELECOM HOLDING (OTH): Investing more money in its own shares, the company is planning to repurchase up to 44.97 million shares (8.9 million GDRs) from the local market and London Stock Exchange over the period from 14 August through 19 September. This follows the share buy-backs performed by OTH during 2008, including the May and June 2008 tender offers. EGYPTIAN KUWAITI HOLDING: The company posted $60 million in first half net profits with a 22 per cent surge from the first half of last year. This pushes the overall profits realised by the company since its inception 10 years ago to $393 million, with an investment yield of paid-in capital of 296 per cent. Compiled by Sherine Abdel-Razek
