In a week, Egyptian shares attained gains totaled EGP 6.3 billion despite lackluster performance. The capital market reached EGP 423.135 billion last Thursday, compared to EGP 416.881 billion at the end of a week earlier. Accordingly, the Egyptian Exchange's benchmark index EGX 30 index surged by 2.17% this week, registering a surge of 143.42 points, ending Thursday's transactions at 6748.07 points compared to 6604.65 points at the end of a week earlier. The main gauge index hit its highest point on Thursday's closing at 6748.07 points, where its lowest point recorded on Monday at 6644.27 points. Meanwhile, the mid- and small-cap index, the EGX70 inched up by 0.34% closing at 535.19 points during Thursday's session, compared to 533.4 points at the end of a week earlier. The price index, EGX100 also increased by 0.92% concluding by 910.96 points during Thursday's session, against 902.69 points at the end of a week earlier. Companies' Weekly Performance Highlights: Orascom Telecom Media And Technology Holding - (OTMT.CA) closed last week at EGP 0.72, while closed on Thursday at EGP 0.77, upping by EGP 0.05 (7%). Stock highest close during the week came on Wednesday at EGP 0.77, while the lowest close came on Sunday at EGP 0.74. On Tuesday, EFG-Hermes raised OTMT FV to EGP 0.88/share (USD0.64/GDR) as we modify the structure of the valuation components in our sum-of-the-parts (SOTP) model for OTMT. Hermes stated that, it maintained Buy rating on the stock, and see an arbitrage opportunity as the GDR lags the local listing by 16%. Hermes added that, the stock has rallied in the past few months on what we think is speculation about the impending exercise window of France Telecom's (FT) call option on OTMT's 5% stake in Mobinil. For various reasons, we do not believe it is favourable for FT to exercise its option in 2014, but we rather expect an exercise of the put option by OTMT on one third of its stake in 2015 (January - February). We believe OTMT will continue to attempt selling the remaining assets it holds after demerging from GTH (previously OTH) and return cash to shareholders. Management will only do so if it receives the right price, as OTMT is not distressed to carry out a fire sale, in our view. Despite the conservative valuation assumptions we employ, and despite continuing absence of strategy in the company, in our view, our FV still offers an attractive upside potential of 23% to the local share price and 42% to the GDR. We use EGP6.90 per USD as an FX rate in our model, while the current price differential between both listings implies cEGP8.00 per USD. The largest contributor to our total valuation of OTMT is still Koryolink (North Korea), with 47%. We believe our valuation for this asset captures the risk it bears, as we value it at 1.8x 2013e EBITDA given political uncertainty and repatriation difficulty. We do not account for the unit's restricted cash of USD422 million, which we see as an area of upside potential to our valuation. Another source of upside to our valuation is the MENA submarine cable, which we account for at 50% of its net book value. Investors' Activity: Local investors led the market activity all through the week, followed by Foreign and Arab investors respectively. Local investors were the most active buyers this week earning the value of EGP 130,049,744. Arab investors chose also to buy by value of EGP 4,404,165. Foreign investors were most active sellers this week by the value of EGP 134,453,910. Retail & Institutions' Activity: Retail activity led the market all through the week as it ranged between 24.78 – 69.14 %. While Institutions activity ranged during this week between 30.85 – 75.21 %.
