[2008-07-21]  Uncertainty continues to drive down previous gains on Cairo bourse
The CASE 30 Index is still heading south for the fifth consecutive week to close at 9,356 points, a drop by 2.2%, implying a year to date loss of 11.3%. The index slump came on the back of strong selling from the retail and Arab investors by mid-week, for no obvious reason other than a US$9 drop in oil futures the day before.

Out of 190 stocks traded last week, 152 stocks declined, while only 29 stocks moved ahead and 9 stocks remained unchanged.

The Construction and Materials index, which increased by 2.1% was the only rising index during the week, pushed by the first quarter results of Orascom Construction Industries, whose net income increased by two fold year-on-year.

The Travel and Leisure index was the top loser, dropping by 13.2%, as a result of the 14.4% drop in Egyptian Resorts Company stock, as well as the Orascom Hotels and Development stock by 14.3%. It is worthy to note, that the foreign investors were net buyers throughout the week, as the stocks reached very attractive price levels based on their expected earnings. The lack of confidence is the main reason behind the strong selling waves of local investors. It is going to take sometime until the confidence will be regained, according to a weekly report from Global Investment House. The fear of a downturn in the index trend has overshadowed the current cheaply traded stocks.

Meanwhile, JP Morgan Bank has a positive outlook on the Egyptian economy, confirming that the stabilisation of international prices should be reflected positively on the economic growth going forward. In addition, they stated that the Egyptian economy achieved a growth of 7.4% during the first nine months of financial year 2007-2008.

The ABC Bank announced the issuance of its capital gain fund. The fund will be an open-end fund that will invest in the listed securities on the Egyptian stock exchange, as well as the money market instruments. The fund's total value is LE50 million, distributed over 500,000 certificates with a par value of LE100 per certificate. ABC Bank will subscribe in a minimum of LE5 million of the total value of the fund. Subscription will be at par and will start on 27 July 2008, for a two-month period, where the bank would be able to close subscription after 15 days from the beginning of the subscription, in case of the full coverage of the fund value. The minimum number of certificates set for subscription is five certificates, with no maximum. The fund will be managed by Delta Rasmala Asset Management.

In corporate news of the week, Egypt's Suez Canal generated revenues of US$5.1 billion in the financial year 2007-2008, up by around 22.7% from the year before. The revenues are a major income stream for the government and an indicator of trade.

Orascom Construction Industries (OCI) announced the establishment of a new construction joint venture, 'Emirates Foundation' in Abu Dhabi, UAE. Emirates Foundation will be a partnership between OCI, Hydra Commercial Investments, Sorouh Real Estate and Capital Investment, an Abu Dhabi-based firm. Emirates Foundation will specialize in geotechnical engineering and foundation works including piling, grouting and D-walls. OCI will hold a 50% stake in Emirates Foundation.

Lecico Egypt Company's board of directors approved the purchase of treasury stocks, during the period from 15 July to 14 August 2008, amounting to 3,157,895 shares, equivalent to a 7.89% stake in Lecico, from the current owners, Sugarlop Holding and Sanitec companies, at a price of LE34.775 per share (US$6.5 per share) as reported on the CASE website.

The board of directors of Nile Cotton Ginning announced that it would sell the company's lands in Damanhour and Kafr El Sheikh cities, where the proceeds will be used to invest in certain projects, which have an expected investment cost of LE550 million.

Blom Bank will hold its extraordinary general assembly on 30 July 2008, to discuss increasing the Bank's issued and paid-in capital from LE500 million to LE750 million, through a 1:2 rights issue at par, LE10.

Commercial International Bank (CIB) will increase its issued and paid-in capital from LE1.95 billion to reach LE2.93 billion, through distributing 1:2 stock dividend financed from the Bank’s reserves. The stock dividend will be entitled to shareholders until the end of 30 July 2008 trading session, while the distribution will be on 31 July.

The general assembly of Oriental Weavers Carpets held on 29 March 2008, approved increasing the company's issued and paid-in capital from LE280.95 million to reach LE373.03 million, through distributing 0.33:1 stock dividend financed from the retained earnings. The stock dividend will be entitled to shareholders until the end of 30 July 2008 trading session, while the distribution will be on 31 July 2008.

Six October for Investment and Development (SODIC) granted the infrastructure works contract of the Allegria project to the National Company for Mechanical and Electrical works. The contract has a total value of LE191 million and the project’s infrastructure works will be implemented over 19-month period.

Heliopolis Housing and Development announced that its 5:1 stock split will be effective on 31 July 2008 to shareholders until the end of 30 July 2008. Accordingly, total number of shares will increase to 74,171,400 shares from 14,834,280 shares.

The Managing Director of Upper Egypt General Contracting announced that the company
is seeking to acquire new land plots to increase the company’s assets. In addition, he denied that the
company submitted an offer to acquire a stake in Arab Company for Investment and Development (AIC).

Source: Copyright © 2008 Business Intelligence Middle East.