[2008-07-29]  Orascom Construction leads Egyptian shares up, OT dips
Orascom Construction Industries (OCI) led Egypt's benchmark stock index slightly higher on Monday, with investors viewing the stock as a safe haven at a time of uncertainty in the market.

Shares in Egypt's largest listed builder rose as high as 406 Egyptian pounds ($76.48) during the session, but crawled back to last trade nearly 1 percent up at 399.90 pounds.

"Many investors see OCI as a safe haven when the market is weak," said Ashraf Akhnoukh, a trader at CIBC brokerage in Cairo.

HSBC raised the price target for Orascom Construction in July to 600 pounds from 590 pounds and reiterated its "overweight" rating on the stock.

The benchmark Case 30 index, which lost 11 percent in the year to Sunday's close, inched 0.37 percent higher to 9,533.54 points. The well watched Hermes index rose 0.9 percent to 829.85 points, while the broader CIBC-100 index rose 0.85 percent to 479.79 points.

Investment services company Al Ahly for Development and Investment jumped nearly 15 percent to 77 pounds a share on market expectations of strong profits in the second half of 2008, said Hashem Ghoneim of El Nour Securities.

"There is a new management and investors expect better profits starting the second quarter of 2008," he said.

Shares in the company have plunged nearly 40 percent from its one-year high of 109.90 pounds on June 25 as Egyptian shares were hit by turmoil in global stock markets.

Traders said a decline in regional mobile phone operator Orascom Telecom (OT) tempered the rise of the Case 30 index.

Shares in OT, which have shed about 35 percent in the year to Sunday, last traded 1.41 percent down at 58.70 pounds. The drop came despite last week's news the group was part of a consortium that provisionally won a license to set up a Canadian wireless operator.

"OT is a question mark. Many people are wondering why the stock is down. It is very cheap," said Ghoneim. Akhnoukh of CIBC said: "No one knows what is going on ... People do not have confidence in OT."

Morgan Stanley this month downgraded the group from "overweight" to "equal-weight" and reduced its price target.

A report by CIBC brokerage in July said Egyptian telecom firms were hit hard by a decline in global telecom stocks and recent government decisions to raise the prices of fuel to finance a 30-percent wage increase for public-sector workers.

"Telecom has been the worst performing sector among all 12 sector indices run by the Egyptian exchange," the report said.

Investment bank EFG-Hermes said this month it expected OT's subscriber additions to slow in the second quarter of 2008 to 3.1 million from 4 million.
Source: © Reuters 2008.