Egypt index edges to another year high Egypt s main index gained less than 1 percent, buoyed by foreign buyers expecting strong quarterly results, with Orascom Construction (OCI) extending its rally to a third day. The main index ended at 7,250 points, adding 61 points to Sunday s 13-month high. The secondary index inched down 0.6 percent to 1,337 points. Osama Mourad, CEO of Arab Finance Brokerage, said the decline was due to regional investors taking profits and others switching from small to big caps. The retail investors are all taking their profits at the 7,200 level, which was a level now talked about for four or five months as the resistance level, he said. The institutional investors are more focused on the quarter earnings announcements which are expected to be positive in Egypt. OCI is gaining from contracts in Algeria and rising oil prices, and investors are optimistic about Talaat Moustafa (TMG) after it announced a new project in Saudi Arabia, he added. Orascom ended up 1.9 percent at LE 276.70. TMG closed up 3.2 percent at LE 7.48 per share. El Sewedy Cables dipped 1.8 percent to LE 75.83. Investment bank Beltone Financial downgraded the stock s target price to LE 72.22 per share from LE 78.71 earlier this month. -Reuters CIB sees organic growth for now Commercial International Bank (CIB) said on Monday it would focus on organic growth, not acquisitions for now, as it expands its modest retail business and meets renewed corporate demand for borrowing. Hisham Ezz Al-Arab, the chairman of Egypt s biggest private bank by assets, also said he saw a breakthrough in demand for consumer banking within five years in the most populous Arab country, and was expanding CIB s capacity to capitalize on this. Our focus really is using our resources organically for the time being, he said at the Reuters Middle East Investment Summit. CIB broke off talks in 2008 on a merger with Cairo-based Arab African International Bank. So far, we can t see something that is screaming cheap and has a low integration cost. Pre-2008, we were seeing the world differently, Ezz al-Arab said, adding that the bank had since reassessed priorities and how to target its financial resources. CIB, which has long focused on corporate customers, has been building up its retail business, although consumer lending still makes up only about 10 percent of total assets, reported as LE 63 billion ($11.5 billion) as of June 30. Household debt was equivalent to just 10 percent of Egypt s gross domestic product, while some comparable emerging markets which had already been through an expansion in retail banking had levels of 40 to 60 percent, Ezz Al-Arab said. If the breakthrough happens today, in three to five years time we could have 20 percent. But it takes time, he said. The natural progression that happened in other emerging markets and in mature markets in consumer lending is happening here, he said, adding that his bank was investing in technology and training to have new retail processes in place by late 2010. Analysts say Egypt, with 77 million people and a cash-dominated economy, is ripe for expanding retail banking. Speaking about the bank s corporate business, Ezz al-Arab said appetite for borrowing by Egyptian firms was returning. The financial crisis stopped corporates from making investments in late 2008 and early part of 2009, he said. Now we see them back ... Loan applications are growing. This means they feel much more confident about the future, but not like back in 2007, he said, adding that non-performing loans at his bank had decreased. -Reuters Citadel eyes investments in Kenya, Uganda Egypt-based private equity firm Citadel Capital is considering investing in Kenya and Uganda in the next six to 12 months, an executive said on Sunday. Citadel, which has investments worth $8.3 billion, previously said it planned to invest $200 million to $400 million in 2010, with an eye on Africa. We re spending some time in Kenya, we re spending some time in Uganda, and hence, I think these are the places we ll invest in next, naturally, Managing Director Abdalla El Ebiary said on the sidelines of a conference on private equity in Africa. Probably in six to 12 months, you ll hear of a new investment, he told Reuters. Ebiary declined to elaborate on the East African projects until any deals were complete, but added that the firm was considering expanding into new sectors. Citadel invests across the Middle East and North Africa through 19 platform companies in sectors including energy, mining, agriculture and cement. The growth rates in Africa are extremely attractive. One of the statistics that really interested me is that Africa is going to grow at four percent next year, which will be the fastest-growing continent, Ebiary said. We re looking at new industries where we can come in and play, he said. Stephen Murphy, managing director of institutional fundraising, said the firm had eyed agriculture and infrastructure investments in Uganda. Logistics across Africa is an area we re very interested in, and you ll see us do more, Murphy added. Citadel s investments include a company developing Nile river barges and ports. -Reuters Mobinil may issue local bonds The Egyptian Company for Mobile Services (Mobinil) said it is considering the issuance of local bonds in order to further finance its network expansion plans, the company said in a statement on the stock exchange website. The matter of issuing bonds will be presented to the company s board of directors. If the board approves such an initiative, it will be announced immediately by Mobinil to the stock exchange. Egypt finalizes microfinance law The Ministry of Investment finalized a law approving the establishing of microfinance companies. The companies approved are to have a minimal capital of LE 5 million, while they are prohibited from accepting deposits and transferring or exchanging money. Around 21 million people are expected to benefit from the new microfinance program, according to estimates from the ministry.
