The market regained balance once again through the week ending 29 May, with the CASE30 index snatching a 3.5 per cent increase to close at 11,057 points. Rising confidence was apparent in increased buying orders by both locals and foreigners through the week. At the same time, the government announced that economic indicators for the fiscal year 2007/ 08 showed an increase in the average income per person by 14 per cent, to reach LE11,700. Moreover, the unemployment rate declined to 8.8 per cent. AL-EZZ STEEL REBARS expects net profits to grow by more than 12 per cent for 2008 thanks to higher production and rising steel prices. A senior company official made the announcement, amidst accusations against Al-Ezz Steel of monopolising the market and pushing steel prices to unprecedented highs. The official told Reuters news agency that the government's recent decision to reduce electricity and natural gas subsidies for energy-intensive companies would boost costs, but will not significantly dent profit. This is because the cost of energy accounts for 10 per cent of the company's cost of goods, compared to seven per cent in 2007. The company plans to increase production to 5.3 million tonnes by the end of 2009, a year before its regional expansionary plans start pushing local capacity to 6.3 tonnes and three million tonnes in Algeria. TALAAT MUSTAFA GROUP, the leading real estate developer, is expanding internationally and is currently considering building hotels in Ukraine and Montenegro to capitalise on a growing tourism sector in both cities. The move, the company's first outside the Middle East, comes a few weeks after the group announced it is building a residential complex in Saudi Arabia. ORASCOM TELECOM HOLDING (OTH)'s main shareholder Weather Investments announced that it will not sell any of its shares in OTH through the latter's cash purchase offer to buy back treasury shares. Meanwhile, OTH transferred 24.267 million GDRs into 121.338 million local shares as treasury stocks. On another front, OTH and Weather CEO business tycoon Naguib Sawiris said he will sell a 10-15 per cent stake in Weather Investments for $1.4 billion to three private equity firms. Apax Partners, the UK-based private equity group, will take over a five per cent stake in Weather; TA Associates and Madison Dearborn, the US-based groups, together would buy a further five per cent stake between them. Sawiris is considering selling the stake through a convertible bond issue, but said his final decision will be made by the end of the first week of June. ORASCOM CONSTRUCTION INDUSTRIES (OCI) posted a whopping 224 per cent increase in its net profits during the first quarter of 2008, to reach $2.518 billion, compared to the same quarter of last year. The upturn results from including the profits of the newly acquired Egyptian Fertilisers Company (EFC) for the first time. Another factor attributing to the increase is the $255 million capital gain resulting from OCI divesting its 45 per cent stake in Sokhna Port Development Company (SPDC) to Dubai Ports World. HC Securities pointed out that excluding the capital gains, OCI still posted an impressive 186.9 per cent increase in net income. The company's consolidated sales, including those of EFC, grew by 33 per cent to reach $724 million. A quick look at the company's financial statement shows a drop in the company's net receivables, as it received in cash the $14 billion representing the proceeds from the French Lafarge acquisition of its cement transaction. Also during the quarter, OCI completed the acquisition of EFC which led to an increase in net fixed assets and goodwill. Market analysts expect a decline in the company's profits in 2009 since it will pay more than $100 million extra in taxes to the Egyptian government because of recent tax changes. AL-SEWEDY CABLES is planning to build a power cable plant in Qatar with investments worth $150 million. The plant, a joint venture with a Qatari partner, will have an annual production capacity of 30,000 tonnes, mainly directed to Gulf markets to make use of the boom in the construction sector there. Meanwhile, work on the company's new cable factories in Algeria and Saudi Arabia is on track, with operation beginning in the third quarter of 2008 in Algeria, and the fourth quarter in Saudi Arabia. In a conference call with EFG- Hermes, the company's management revealed that the feasibility study of the company's planned copper smelters is expected to be announced within four to five months. This is due to a delay by the company conducting the study. The study will reflect the impact of government policy changes on the cost of production. El Sewedy's management clarified that the company's expansion strategy focuses on green fields, particularly in cables and transformers. Acquisitions, however, will be limited to attractive opportunities such as companies owning advanced technology and with large market shares. Compiled by Sherine Abdel-Razek
