The early days of 2008 witnessed new highs for the Egyptian Bourse. CASE30 ended the week closing on 3 January with a 2.3 per cent gain, exceeding 10,700 points. Statements by Prime Minister Ahmed Nazif through the week marginally calmed unrest stirred by previous talk about cancelling subsidies. Nazif said the government has no intention to reduce subsidies, and that they are expected to reach over LE70 billion this year. AL-EZZ STEEL REBARS made headlines through the week, although the company denied all reports that it plans to merge a number of its subsidiaries to establish a holding company. Moreover, Al-Ezz Steel's extraordinary general assembly meeting approved the issuance of bonds, with a value of LE1.1 billion, to finance the company's long-term debt and part of its short-term loans. However, the most important development related to the company was its decision to increase its steel rebar selling prices by LE250 per tonne, pushing the ex-factory price to LE3,830 per tonne. The increase, already enforced since early January, was expected amid increasing international prices, high demand for steel, an expected increase in the prices of the company's main raw materials, billets and high transportation costs. Another important development was the company's acquiring a licence to establish a new steel plant. Besides Al-Ezz Steel, the General Authority for Industrial Development has granted three local steel producers licences to establish four steel plants. An auction will be launched in three weeks for another licence for the production of Direct Reduced Iron (DRI) to companies bidding for the first time. Offering new licences to start steel companies was triggered by projections that Egypt's need for steel towards 2013 will amount to 12 million tonnes, creating an annual demand-supply gap of 6.4 million tonnes -- given the current production level of 5.4 million tonnes. Al-Ezz Steel's offer to buy a majority stake in the state-owned Arab Steel Company (Arcosteel) was turned down by the Metallurgical Industries Holding Company, due to the low price offered. Al-Ezz Steel was the only bidder after the withdrawal of the Saudi company Al-Toweirky Group. ORASCOM TELECOM HOLDING (OTH)'s sale of its Iraqi business to the Kuwaiti MTC- Atheer was finalised on 31 December, after it met all the obligations pertaining to the transaction. According to the sale agreement, MTC- Atheer will pay 50 per cent of the deal's value on the first anniversary of the completion of the transaction, and the rest will be paid one year later. The company's other recently finalised sale transaction related to divesting its 14.1 per cent stake in Hutchison Telecommunication International Limited (HTIL). OTH announced in the last week of 2007 that it received the entirety of the sale proceeds at $956 million. The company stated that the cash proceeds are going to be used in reducing its debts. TELECOM EGYPT (TE), Egypt's incumbent fixed-line operator, plans to invest between LE1.7 and LE1.8 billion in 2008 to introduce new technologies. This is lower than the LE3 billion the company spent in each of the last few years to stimulate growth. Meanwhile, TE ruled out any plans to lower the local tariff when the new fixed-line company starts operation, since it is already "very low", according to TE Chairman Akil Bashir. Bashir, however, said that the company may decrease international tariffs. On another front, TE has not yet decided if it will inject new capital or sell its Algerian fixed-line joint-venture with Orascom Telecom (OT) Consortium Algerien de Telecommunication (Lacom). Both TE and OT recently showed reluctance to keep the venture due to lack of free competition, and the Algerian government's favourable treatment of competitor Algerie Telecom. RAYA HOLDING's Chairman Medhat Khalil denied news reports that Raya formed an alliance with British Telecom (BT) to bid for Egypt's second fixed-line licence. Khalil said his company is waiting to see the conditions of the licence, especially whether it will include international call services or not, before it decides. Meanwhile, Khalil did not deny that Raya is currently in talks with several international players interested in the licence. DELTA SUGAR is investing LE750 million in a new production line and is studying the possibility of establishing a new unit to produce ethanol, with an investment cost of $30 million. The new line has an initial production capacity of 15,000 tonnes per year which will increase to 60,000 tonnes annually at a later stage. The new unit is expected to push the company's earnings by 33 per cent, with all its production dedicated to external markets. Compiled by Sherine Abdel-Razek
