The retreat in regional markets proved to be contagious. The local market failed to maintain the upward trend it followed during the early transactions of the week ending 30 November, as it was reversing its direction by mid-week under the effect of heavy selling by Arab investors. The selling spree stemmed from a similar decline in Arab bourses: both markets in the UAE declined by just a little over a one per cent and Saudi Arabia lost 4.3 per cent through the week as investors sold Egyptian shares to compensate their losses back home. However, strong buying activity by local and foreign non-Arab investors on Thursday limited the decline ensuring the market's main index, CASE30, ended the week 0.7 per cent higher than the level last week Market observers seem to be enthusiastic about the performance of some sectors, especially banking, amid a plethora of positive news. Bank of Alexandria's eight-month profit, ending February 28th 2006, increased twenty- fold to LE2.2 billion. And Bloomberg reported that National Bank of Kuwait is on the hunt for an Egyptian bank with a market value not less than LE 1.7billion. ORASCOM CONSTRUCTION INDUSTRIES (OCI): The construction and cement firm recorded a 58 per cent increase in its net profits for the first nine months of 2006 posting LE2.015 billion on the back of a 44 per cent increase in sales, which reached LE11.9 billion. Cement revenues soared by 63 per cent compared to their level last year, representing 27 per cent of OCI's sales revenues. The upturn in cement revenues was fed by increases in price of cement as well as increased volumes of production. The cement group's annual capacity reached 21 million tons in 2006 after new production facilities became operational in Egypt, Northern Iraq and Pakistan. The company expects to add another 10 million tons over the next 10 months by adding new capacities in Iraq, Nigeria, Algeria and the UAE. ORASCOM HOTELS AND DEVELOPMENT (OHD): the company's Extraordinary General Assembly, held last week, approved increasing the company's authorised share capital to LE5 billion and the paid-in capital by LE80.5 million through the issuance of 16.1 million shares. OHD's chairman Samih Sawiris alone will subscribe to the increase to compensate for the shares he sold to foreign investors last month. Sawiris is buying the shares at the same price he sold them for, that is, LE35.86 per share. Proceeds from the increase, about $100 million, are to be directed to finance the company's regional expansion plans. In a related development, OHD struck a deal to acquire 51 per cent of the local Garana Touristic Group through a share swap. The deal will rank OHD as the largest owner of hotel rooms in Egypt by adding 700 rooms (two hotels) to OHD's holdings in the Red Sea resort of Hurghada. The swap deal will be executed at LE36 for each of OHD shares. During the meeting, OHD has also revealed that it recently was granted 8.5 million square meters of land in 6th of October City from the government to develop more than 30,000 low-income housing units Construction is expected to begin next year. Nasr City Housing (NCH): Only 8.6 per cent of Nasr City shareholders were willing to sell their holdings in the company for the offered price of LE90 per share. A consortium including Beltone, Arab Cotton Ginning and Orascom Hotels Development offered to buy 100 per cent of NCH with a deadline of 27 November. The consortium required firm offers to sell 85 per cent of NCH in order to pursue the deal. According to HC Securities, OHD's management explained during the latter's EGM that future participation in any potential Nasr City deal depends on price as they see the purchase as a short-term investment. ORASCOM TELECOM HOLDING (OTH): The Italian power company Enel agreed to sell its 26.1 per cent stake in Weather Investments, which is the majority shareholder in OTH. Its stake of 50 per cent plus one share was sold to OTH's chairman, Naguib Sawiris, for $2.59 billion. According to the deal, Weather become wholly owned by Sawiris who would pay the amount on two instalments Weather Investments owns Italy's second biggest fixed-line phone operator, Wind. Last year, Enel sold 62.75 per cent of Wind to Weather for almost three billion euros in cash in one of Europe's biggest leveraged buyouts. Earlier this year Enel sold the rest of Wind in return of 328 million euros worth of Weather shares, thus raising its stake in Weather to 26.1 per cent. THE EGYPTIAN COMPANY FOR MOBILE SERVICES (MOBINIL): Egypt's largest mobile phone service provider ruled out any plans to float an additional stake of the company in the local bourse. Industry officials and stock market analysts say MobiNil pointed out that the company would either to issue new shares or acquire bank loans to obtain a 3G license costing LE3.3 billion. MobiNil was set up in 1998 with a capital of LE1 billion. Its eight million subscribers account for 52 percent of the market. The free floated stake counts for 20 per cent of the company.
