The first week of July, marking the start of summer holidays and usually showing a slowdown in transactions, witnessed robust activity pushing the CASE30 up by 4.7 per cent to close at 8,167 points this week, its highest in almost two years. The healthy performance coincided with, and may be was even driven by, the announcement of a decline in the inflation rate. Egypt's inflation rate dropped to 8.5 per cent in June 2007 from 10.5 per cent in May 2007, mainly due to declines in food and beverage prices. The retreat in the rate and pushed the Central Bank of Egypt's (CBE) Monetary Policy Committee (MPC) to keep the overnight deposit and lending rates at 8.75 per cent and 10.75 per cent respectively. The CBE nevertheless warned that inflationary demand pressures from current economic growth remains a concern. "The MPC will continue to closely monitor all economic developments, especially the factors underlying inflation, and will not hesitate to adjust the key CBE rates to ensure price stability over the medium-term", said the CBE statement. The inflation rate was a main concern for the government after it soared to 12 per cent in February The Ministry of Investment announced that the stock market's capitalisation rose to more than 90 per cent of GDP in the begining of July 2007 compared to 35 per cent in April 2004. ORASCOM TELECOM HOLDING (OTH), the regional mobile operator, is eyeing the Gulf market as it is being short-listed among 12 international companies and consortia to bid for Qatar's second mobile licence. The Qatari cellular market is currently monopolised by Qtel. According to HC Securities, the hike in oil and gas prices accelerated the mobile penetration rate in Qatar over the last year. Qtel was able to increase its number of wireless subscribers from 757,000 by the end of the first quarter of fiscal year 2006 to 1.023 million in the corresponding period of 2007. Furthermore, OTH received $793 million from Hutchison Telecom representing its share of the capital gains realised from the sale of Hutch Isaar. The company's 29 June deadline to buy back up to 37.7 million of its traded shares passed with a total of 2.2 million shares bought within a price range of between LE69.9 and LE75.2. On another front, OTH Chairman Naguib Sawiris is bidding for a majority stake in the Saudi Pak Bank which is a joint venture between the governments of Pakistan and Saudi Arabia. Other competitors for the bank are the Commercial Bank of Kuwait, Pakistan's KASB Bank, and a consortium of Bank Muscat, ACTIS Capital of the UK and Nomura Securities. GHABBOUR AUTO COMPANY Chairman and CEO Raouf Ghabbour was quoted by Reuters as saying that the private placement and initial public offering of 30 million of his company's shares ended with the private placement covered seven times and the IPO four times. More than 12,000 people subscribed to 29.7 million shares while the offered shares through the IPO were 7.5 million; accordingly 150 shares will be allocated to each subscriber, and for those subscribed for more than 150 shares the allocation ratio will be 20.23 per cent. Ghabbour revealed a plan to set up an automobile finance unit with a global bank as a part of the company's expansion schemes. ETISALAT MISR, Egypt's third mobile network operator, announced it would bid for Egypt's second fixed-line network licence in 2008. The second fixed-line network, which will compete with that of Telecom Egypt, will start operating in early 2009. The National Telecommunications Regulatory Authority (NTRA) is studying the possibility of granting a WiMAX licence to the buyer of the second fixed-line licence. The NTRA is also considering offering a WiMAX licence to Telecom Egypt if it matches all the conditions in the second licence. Etisalat Misr has attracted 400,000 subscribers by the end of its first month of operation in Egypt. It has an original target of three million subscribers by the end of 2007. NILE COTTON GINNING will start production using new capacity costing LE300 million by the end of this year. The company's current production capacity reached 5,000 tons per year with 80 per cent directed to exports to European countries. Compiled by Sherine Abdel-Razek
