Driven by a bearish sentiment, big caps pulled Egyptian indexes down on Wednesday, traders said. The country's main index EGX30 shed 172 points, or 2.34 per cent, as Orascom Telecom, the largest Arab mobile operator by subscribers, took a dive by 5.81 per cent to LE6.49 per share ($1.2). Orascom Construction Industries (OCI), Egypt's largest builder by market value, dipped by 2.41 per cent, closing at LE256.72 per share. Pioneers Holding shed 6.11 per cent to LE4.76 per share. Egyptians made net sell-offs worth LE255 million, they added. The North African country's benchmark index EGX 30 ended the day's trading at 7,176.83 points. The EGX 70 index, which measures 70 of the country's small and mid caps, plunged by 2.05 per cent to 688.61 points. Volume hit LE1.3 billion, according to the Egyptian Exchange. In a related event, the board of OCI approved the sale of LE1.65 billion in five-year bonds to finance acquisitions, the firm said. The funds would also be used to refinance its balance sheet, OCI said in a statement released by the Egyptian Exchange. The bonds, which will be tradeable but not nonconvertible into shares, will be offered in public and private tranches, the statement said. On Tuesday, an Algerian minister said that his country might consider buying Orascom Telecom's Algerian unit directly or purchasing it via another body, complicating a planned sale to South Africa's MTN. Orascom is in talks to sell some or all of its assets to MTN but Algeria has said it would block a deal by resorting to what it says is its right of first refusal to buy Djezzy, Reuters reported. Algeria has increased pressure on Djezzy since last year, claiming more than $700 million in back taxes and penalties for 2004 to 2007, years when Orascom claims it had a tax holiday. Orascom has paid the tax bill for 2005-2007 and most of the penalties but continues to dispute the bill in Algerian courts. Algerian sources told Reuters in February that the government wanted the Egyptian firm out, while last month a central bank source said it had been blocked from transferring profit out of the country. Orascom and its parent Weather Investments confirmed MTN talks on April 27, but a day later Algiers said it could withdraw Djezzy's licence if the deal proceeded. Djezzy is seen as the jewel in the MTN deal, which might also include some smaller Orascom units in sub-Saharan Africa. Asked whether the government might now buy Djezzy, Algerian Telecommunications Minister Hamid Bessallah told Al Arabiya satellite television: "We will negotiate. The Algerian government is ready to buy any organisation. "But perhaps (the purchase) could be through another organisation to facilitate the deal," he added. He did not mention a price the government or any government-linked entity might pay for the unit. Analysts say Djezzy is worth up to $7 billion, but could fetch much less if a sale is forced. Algerian media has speculated that Sonatrach, the state energy firm, could be a vehicle to buy Djezzy. The smallest of Djezzy's two competitors is Mobilis, a state-owned company. The other competitor is Nedjma, majority held by Kuwait's Wataniya. In a response to Egypt's stock exchange, Orascom said on Tuesday Algeria had not demanded $250 million in back taxes for 2008 and 2009, as reported by an Algerian newspaper. The firm was allowed to repatriate half its 2008 dividends from Djezzy in September, with the remainder withheld pending a resolution to the tax dispute. Djezzy, with 2009 revenue of more than $1.8 billion, accounted for almost 37 per cent of Orascom's top line. Bessallah said Orascom had shown a lack of respect for the Algerian government by not discussing its intent to sell with authorities before entering talks with MTN. Orascom's chairman, Naguib Sawiris, has said he has requested a meeting with senior Algerian ministers, including Bessallah, the prime minister and the finance minister. An Orascom Telecom spokeswoman said no date has been set for a meeting. The Algerian ambassador to Egypt said he had not been asked to arrange a meeting. Meanwhile, world stocks fell to eight-week lows and the euro hit a one-year trough as investors fretted that a debt crisis would spread to other euro zone countries, following a massive bail-out for Greece. The European Union and International Monetary Fund agreed a 110 billion euro aid package for Greece at the weekend, but the promise has failed to calm markets. Shares in Spain and Portugal, two of the weaker euro zone members, fell two per cent, and the FTSEurofirst 300 index of leading European shares dropped 0.75 per cent to two-month lows. The euro, which suffered its steepest one-day loss since last June on Tuesday, notched up another one-year low at $1.2936. World stocks as measured by the Morgan Stanley Capital International (MSCI) fell half a per cent to their lowest since early March, while the more volatile emerging equities index fell 1.5 per cent. Asian markets also weakened. Shanghai's key index fell as much as two per cent to its lowest in seven months, suffering from Beijing's weekend moves to tighten policy. Investors found harbor in the dollar. The dollar index was steady after gaining 1.4 per cent on Tuesday, its biggest daily gain this year, and the US currency tested eight-month highs against the yen near 95. Oil extended losses toward $82, following the steepest one-day percentage loss in three months on Tuesday, on rising inventories and a firm dollar.
