Fears of economic recession in the United States fueled a global sell-off in stocks this week and led to an emergency interest-rate cut by the Federal Reserve Bank on Monday. Foreign portfolio investors were net sellers in most regional bourses. While the CASE 30 lost almost 10 per cent during the first three trading sessions of the week, markets in Abu Dhabi, Kuwait and Saudi Arabia saw even steeper declines with the Saudi Tadawol index shouldering a heavy double digit decline. The local market was already under selling pressure which intensified during the last two trading sessions in the week ending 17 January. The profit-taking wave was expected as investors rushed to liquidate their investments to capitalise on gains made over the previous three buoyant weeks. Tourism arrivals grew by an average 27 per cent in the five months ending November 2007, marking the first five months of fiscal year 2007/2008 -- compared to an increase of 8.1 per cent in the first five months of the previous year. The growth stemmed from better economic conditions in European economies and a boom in Russia and the gulf region. EFG-Hermes, Egypt's leading investment bank, estimates that tourism revenue for the entire fiscal year which began on 1 July 2007, will rise 15 per cent to $9.2 billion. Another positive indicator is the record increase in Suez Canal revenues in December 2007, to reach $426.3 million -- up from $350.2 million one year earlier. Increasing trade between Asia and Europe as well as rising shipping costs have made Suez Canal transit cheaper than rounding Africa and the Cape of Good Hope, thus increasing traffic through the waterway. Suez Canal revenue for the entire year surged by 20.7 per cent to $4.6 billion, up from $3.8 billion in 2006. While Suez Canal revenues represented 3.3 per cent of GDP in FY2006/07, the Suez Canal Authority will raise the transit fee by an average 7.1 per cent starting in April. EGYPTIAN COMPANY FOR MOBILE SERVICES (MobiNil)'s 34.7 per cent owner Orascom Telecom (OT) announced last week that it does not plan to sell its stake in the company. This came after speculations that the pan-African operator MTN group is considering acquiring OT's stake. MobiNil's shares reacted to the news with an instant increase of almost 7.5 per cent during transactions on 15 January. Rumours were based on a report published by ITWeb which said it was not yet clear whether MTN wants to buy OT's entire stake or become a third, minority partner. An MTN spokesman neither confirmed nor denied the report, but he told ITWeb that in line with its vision to be the leading provider of telecommunications services in emerging markets and to consolidate its position, the MTN Group continues to seek appropriate, value-enhancing expansion opportunities which meet its investment criteria. On another front, the National Telecommunications Regulatory Authority (NTRA) has asked the government not to allow current mobile operators to bid for the fixed line license in their own capacity but through their parent companies. This means that while MobiNil, Vodafone Egypt and Etisalat cannot bid for the licence, Orascom Telecom, France Telecom, UAE's Etisalat and Vodafone Group would be allowed to apply for the licence. Meanwhile, MobiNil short-listed three international companies to execute the first phase of its 3G network so it can provide the technology in May. Both Etisalat and Vodafone Egypt already offer 3G services. In a few days, subscribers to the three mobile network operators will be able to switch between the three networks while keeping the same number at a cost of LE75. ORASCOM CONSTRUCTION INDUSTRIES (OCI) has signed a LE560 million contract with West Delta Electricity Production Company to carry out civil work at Sidi Krir Power Station. The package includes building two 250 megawatt turbine generators and cooling systems, which OCI will execute through a joint venture with its subsidiary Besix within 32 months. According to an OCI release, the Sidi Krir contract is OCI's fourth in the power sector within 12 months. OCI won contracts for two 350 megawatt thermal power plants in El-Tebbin and a 62 megawatt solar combined cycle power plant in Kuraymat for a combined value of $230 million. It also won a 560 million euros contract to build the first 1,200 megawatt combined cycle power plant in Algeria in a consortium with the French Alstom. SUEZ CANAL BANK (SCB) is in negotiations to sell its 29.38 per cent stake in the Suez Canal Company for Technology (SCT), the owner of Sixth of October University. SCT's total capital is estimated at LE990.9 million, which puts the value of SCB's share at around LE29 million. The move comes as part of the bank's plan to divest its non-strategic assets to finance its loan loss provisions. Other shareholders in SCT include Misr Insurance Company and the Egyptian United Bank. RAYA HOLDING COMPANY will not apply for Egypt's second fixed-line license, according to its CEO Medhat Khalil. Khalil was quoted in news reports as saying that negotiations with three fixed phone service companies to form a consortium to bid for the licence failed. Meanwhile, the NTRA decided to postpone offering the information memorandum of the licence until March, instead of January. The authority also hinted that Egypt's low fixed-line penetration rate made it feasible for the government to issue a third fixed-line licence at some point. The second operator will be allowed to use Telecom Egypt's (TE) infrastructure in certain areas of the country for a limited period. NILE COTTON GINNING (NCG) will pay Banque Misr LE85 million in return for the bank waiving its right to delayed interest. The bank agreed last week to settle the LE200 million in loans to NCG. In a news, NCG announced that it plans to set up a real estate subsidiary, Nile Real Estate, to buy, divide and sell land. The company was one of five local companies which increased their ginning fees last week, in response to an increase in fuel oil (mazot) prices. Compiled by Sherine Abdel-Razek
