A set of welcome amendments to the capital market law, together with other positive macroeconomic news, did not offset an overall cautious sentiment overshadowing the market during the week ending 5 June. Overall trading came at LE10 billion, with the CASE 30 index inching down 0.2 per cent to close the week at 11,032 points. Foreigners were net buyers. The People's Assembly approved the amendments to the capital market law with the aim of widening the base of investments in the local capital market. This included lowering the minimum nominal share value for joint stock companies from LE1 to LE0.1. In addition, there will be a list for auditors authorised to audit the results of both listed entities and companies working in the sector. The Ministry of Economic Development said that unemployment reached eight per cent in the first nine months of 2007/2008, compared to the previous year. Meanwhile, the annual average income rose by 14 per cent to reach LE11,700. On another positive note, Egypt's revenues from the Suez Canal rose to a monthly record of $487 million in May 2008, from $384 million in May 2007, and 449 million in April 2008, when the Canal Authority raised the transit fees. ORASCOM DEVELOPMENT HOLDING (ODH)'s 86 per cent-owned mortgage finance subsidiary Tamweel will double its paid-in capital to LE100 million. The capital increase, already approved by the company's shareholders, is to accommodate the rise in Tamweel's offered services. Tamweel offers financing to both high- end real estate seekers and to low-income budget housing buyers who are clients of Orascom Housing Communities (OHC). OHC is 58 per cent owned by ODH and specialises in building low-budget housing. Meanwhile, Tamweel agreed to sell its loan portfolio to the Egyptian Mortgage Refinance Company (EMRC) to ensure long- term financing. According to press reports, Tamweel had initially agreed to pay the refinancing company a 9.5 per cent interest on its low-budget housing loans and 10.5 per cent on the remaining loans. However, it decided to add two per cent margins to all loans. Tamweel's loans portfolio reached LE90 million in March this year, and is expected to rise to LE150 million by the end of this month. EGYPT KUWAIT HOLDING's 76.87 per cent-owned subsidiary Tri-Ocean Energy has agreed in principle to an Australian offer to buy a 20 per cent stake in an oil concession in North Shadwan, on the Gulf of Suez. Tri-Ocean owns 50 per cent of the concession, while the rest is held by BP Egypt. The offer issued by the Australian Beach Petroleum company is valued at $110 million and is pending the approval of the General Authority for Petroleum and the Ministry of Petroleum. BP and Tri-Ocean have signed a cooperation agreement for investments in the oil field in the Middle East and Africa. In related news, EgyptianKuwaiti Holding denied taking any steps towards establishing a paints factory in Sudan with an investment cost of $15 million. A press release sent to CASE stated that the company was only studying possible investments in the Sudanese market. AL-EZZ STEEL REBARS's second bond issue was approved by the Capital Market Authority (CMA), which includes 11 million bonds with an overall value of LE1.1 billion. The bond issue has a maturity of seven years and has a semi-annual coupon of 11.5 per cent. Holders of the bonds cannot change it into equity, and the issue is callable starting on 30 June 2010. Proceeds from the bond issue will be used to repay the company's long-term debts and a portion of short-term debts. The company is working on the procedures to list the bonds, and the issue is being arranged by Arab African International Bank. ORASCOM TELECOM HOLDING (OTH) expressed interest in buying a 93.8 per cent stake in Pakistan's SME Bank limited. Dow Jones Newswire quoted the Pakistani government as saying that, in general, 29 companies and financial units showed interest in the bank. SME Bank has 630 employees and 27 branches, among which 13 are active commercial branches. The news came a few weeks after OTH's CEO Naguib Sawiris said he wants his company to invest in the banking sector in a country other than Egypt, and that he was already considering buying a bank or a banking licence in Bangladesh. On another issue, Sawiris said he will sell bonds convertible into 13 per cent of Weather Investments to three private equity firms for approximately 1 billion euros. The buyers are Apax Partners Worldwide, TA Associates, and Madison Dearborn Partners PALM HILLS DEVELOPMENT (PHD), a leading local real estate developer, established a joint venture with an unnamed Saudi partner to invest in the property market in Saudi Arabia. The joint venture, in which PHD owns a 51 per cent stake, bought 6.7 million square metres in Riyadh and Jeddah for residential and commercial projects. The joint venture will invest $561 million to finance its first Saudi project. Reuters quoted PHD Chairman Yaseen Mansour as saying that the project represented the starting point for the company's regional expansion strategy. SUEZ INDUSTRIAL DEVELOPMENT COMPANY (SIDC), which is 60.5 per cent owned by Orascom Construction Industries (OCI), has purchased the conditions booklet for the second phase of the Industrial Developers Programme. In the second phase, the Industrial Development Authority is offering 22 million square metres to be developed into 13 industrial plots, with a total investment cost of LE37 billion. The 13 plots are divided among three industrial areas; SIDC is interested in the four plots of land in the 6th of October area. Overall, some 26 local, Arab and international companies have bought the booklet. Interested parties must submit a bid by mid-July; the deadline for financial bids is 15 June. SIDC is on the industrial developers' list and has the right to participate in industrial development in any area offered by the authority. Compiled by Sherine Abdel-Razek
