Capitalising on international recognition of a positive economic outlook, the market closed the week ending 13 September in the black, since the CASE30 gained 1.33 per cent. Capital Intelligence (CI), the international emerging markets rating agency, raised Egypt's long- and short-term foreign currency ratings by one notch to BBB- and A3, respectively. The agency said that the change reflects the "substantial improvement in external solvency and liquidity ratios over the past few years, which indicate strong repayment capacity and an increased resilience to external shocks." Moreover, the IMF released its annual Article IV consultations on Egypt, stating that it expects inflation to remain in the 6-9 per cent range during the fiscal year. Due to a favourable external environment and strong growth, the government had a chance of reducing its deficit faster than it had planned, according to the IMF. IMF projected that with continued growth and rising investments, the current account balance will gradually turn into a deficit of 2-3 per cent of GDP in the medium term. This gap will be filled largely by foreign direct investment. ORASCOM TELECOM HOLDING (OTH) announced that it plans a potential on-market GDR and local repurchase plan of up to five million GDRs (25 million shares) over the next 12 months. This is OTH's second plan to repurchase GDR and local shares. On 22 January, it announced it will repurchase up to five per cent of its outstanding shares (11 million GDRs) -- a goal it completed last month. Meanwhile, Reuters quoted OTH Chairman Naguib Sawiris as saying that he is interested in the French mobile operator Bouygues Telecom if owners put it up for sale. Sawiris also noted that an alliance between OTH and France's Iliad for a fourth mobile phone licence in France was possible. MOBINIL reduced prepaid recharge card prices by 15 per cent. The move had been expected after Etisalat entered the market in May with prices 15 per cent lower than that of its rivals MobiNil and Vodafone Egypt (VFE). VFE had also introduced a similar price last month. MobiNil has also finalised a contract with Alcatel-Lucent to improve the quality of the network and extend its coverage throughout Egypt. In another development, MobiNil CEO Alex Shalabi announced that the company is willing to negotiate with Telecom Egypt (TE) to reduce tariffs from landlines to mobile phones. The agreement between both companies is subject to renewal in May, 2008. Currently, Telecom Egypt receives 40 per cent of the call tariff, whereas mobile operators receive the remaining 60 per cent. TE, Egypt's fixed line incumbent, said last week that it has submitted a request to the NTRA for lower fixed-to-mobile tariffs, and will go to an arbitration committee in case it does not reach agreement with mobile operators. ORASCOM HOTELS & DEVELOPMENT (OHD) executed a share swap with Orascom Hotel Holdings (OHH), where each share of OHH was exchanged for 1.1 shares of OHD. OHD also received good news last week when it got final approval for its Oued Chbika project in Morocco. In January, OHD had signed a memorandum of understanding with the Moroccan government by which it obtained the 15 million square metre-plot of land in Oued Chbika, in southern Morocco. The project, where development is expected to start in early 2008, will include hotels and residential units, a golf course and a town centre. OHD has a 70 per cent share in the project, while the Moroccan Company Caisse des Dépôts et de Gestion (CDG), Morocco's largest financial institution, holding the remaining 30 per cent. ARAB COTTON GINNING's net profit for the year jumped to LE138.4 million from LE46.9 million in the previous year, due to the sale of investments. The company booked LE108 million in investment income emerging from selling 720,000 shares in Modern Nile to Amwal Al-Arabia. Meanwhile, revenues shrank to LE39.5 million from LE133.8 million with the sale of finished goods declining to LE13.3 million from LE104.6 million. Last month, the company's extraordinary general meeting approved increasing its stake in Amwal Al-Arabia to 100, up from the current 43.3 per cent. The acquisition will be done through a swap of one share of Amwal Al-Arabia in exchange for 11.73 shares in Arab Cotton Ginning. AL-EZZ STEEL REBARS, the leading local steel producer, submitted a bid to buy up to 100 per cent of the Arab Company for Special Steel (Arcosteel). Ezz Steel's offer is for a minimum of the 83.1 per cent owned by the state-owned Holding Company for Metallurgical Industries (HCMI) HCMI said in May that around 16 companies from the Middle East, Europe, India and Japan had expressed interest in Arcosteel. Only two companies, Ezz Steel and the Saudi steel company Al-Tuwairqi had submitted bids by the deadline. The government will announce the acceptability of the technical bids on 30 September. In the event that both offers are accepted technically, sealed envelope bidding will occur to acquire the company. Moreover, the winner of the bid is obliged to purchase the remaining 16.9 per cent minority share in case minority shareholders want to sell their stake. Arcosteel is a specialised steel maker based in Sadat City which produced 150,000 tonnes in 2006, mainly directed at the export market. Compiled by Sherine Abdel-Razek
