Provided By:
Egypt’s stock exchange weekly report (1-5 Nov 2009)
Released on - Thursday,05 November , 2009 -18:24 29
Arab Finance: Egypt’s stock exchange benchmark EGX 30 index retreated by 6.32 % this week, representing a retreat of 414.6 points, ending Thursday transactions at 6,551.65 points compared to 6,966.25 points at the end of last week.
Regarding current week trading, the index hit its highest point on Monday closing at 6,849.06 points, where its lowest point was on Thursday, at 6,551.65 points.
Egypt’s stock exchange benchmark “EGX 30 index” started the week on sharp declines and retreated by 2.6% on Sunday to close at 6,784.89 points. Market trade volume reached 106,358 transactions amounted to L.E 1,230,477.
EGX 30 index ended four sessions of sharp declines and rose by 0.95 % on Monday to close at 6,849.06 points. Market trade volume reached 99,613 transactions amounted to L.E 1,415,705.
On Tuesday EGX 30 index suffered the biggest one-day decline since 17 August (lost 3.47 %) and retreated by 3.38 % to close at 6,617.55 points. Market trade volume reached 123,652 transactions amounted to L.E 1,320,689.
Egypt’s index revived slightly after suffering the biggest one-day decline since 17 August on Tuesday’s session and rose by 0.53 % on Wednesday to close at 6,652.58 points. Market trade volume reached 92,436 transactions amounted to L.E 1,915,967.
Finally, Egypt’s index returned to the red area after Wednesday’s slight increase and retreated by 1.52 % on Thursday to close at 6,551.65 points, in low volumes session. Market trade volume reached 100,984 transactions amounted to L.E 909,107.
Companies’ weekly performance highlights:
Orascom Telecom Holding (OT) - (ORTE) stock closed on Sunday at LE 36.12, while closed on Thursday at LE 34.76 losing 4% ( valued by L.E 1.36).
The highest price for the stock during the week came on Monday when it closed at LE 36.78, while the lowest price for the stock during the week came on Thursday at LE 34.76.
On Sunday, OT said it would support Globalive, in which OT had an indirect stake, to operate in Canada after a ruling Globalive said would delay the launch of its service.
The Canadian Radio-television and Telecommunications Commission said Globalive, which will operate under the Wind brand, did not comply with Canada's foreign ownership rules because it was effectively under OT control.
OT will support Wind Mobile's management in its efforts to explore all avenues to obtain clearance to operate in Canada and launch operations at the earliest possible time," Orascom said.
The CRTC had said OT, owned 65.1 percent of Globalive's equity, had entered into a strategic technical arrangement with Globalive, and controlled and held the Wind brand under which Globalive had been set to operate.
Orascom said it had indirect equity ownership in Globalive Wireless (Wind Canada), which was granted spectrum licences.
On Monday, Tamer El Mahdy, CEO at OT subsidiary (Djezzy) stated that Algerian Tax Authority is still examining company books over the past five years.
El Mahdy expected that Algerian Authorities procedures will end soon to allow Djezzy to add profits to its parent OT.
He added that Tax regulations in Algeria have been amended in 2008 to stipulate that all companies must get Tax Authority approval on profit transfer and consequently books of that companies shall be audited, noting that Djezzy has tax exemption (from 2002 to 2007).
Algerian government has permitted Djezzy to transfer 50% of profits to OT.
On Wednesday, OT affiliate Wind Telecomunicazioni SpA said nine-month profit rose 2.2 percent and that it’s paying back ahead of schedule 336 million Euros ($493 million) of debt.
Net income advanced to 281 million Euros from 275 million Euros a year earlier, it said. Sales gained 4.7 percent to 4.23 billion Euros and earnings before interest and tax rose 11 percent to 816 million Euros.
On Thursday, Globalive Communications said talks with new financial backers have stalled and its entire business is in danger following a ruling by Canadian regulators that found the company was controlled by foreigners.
"The whole business has been put at risk by this decision," Globalive chairman and founder Anthony Lacavera said. "We're not near resolving the financing issue and I don't see how we resolve it with this kind of pressure."
Egyptian Company for Mobile Services (Mobinil) - (EMOB) stock closed on Sunday at LE 206.14 while closed on Thursday at LE 199.39, down 3%, representing a LE 6.75 drop.
The highest price for the stock during the week was on Monday when it closed at LE 209.97, while the lowest price for the stock this week came on Thursday, at LE 199.39.
On Sunday, Alex Shalaby, company chairman reported that the company will submit a request to NTRA to get a license of Internet Service Provider (ISP) if it fails to acquire LINKdotNET deal.
Moreover, Hassan Kabbani Company CEO asserted Mobinil intention to provide internet services in the local market through LINKdotNET or through ISP license.
Meanwhile, Mobinil submitted a request to CBE to link between the company and its France Telecom regarding credit ceiling limit to borrow from banks.
On Monday, Alex Shalaby, company chairman excluded capital increase option as it is not important in the time being but said that Mobinil is still eying foreign loans.
Shalaby highlighted that value of Mobinil 11%-interest bonds might hit around L.E 1 billion, adding that company general assembly will say the final word.
Later on the day, Mobinil said it made a profit of L.E 497 million in Q3, down 8.1% on a year earlier and at the low end of expectations from six analysts.
The reported figures show 30% subscribers increase (hit 24.625 million). Subscribers’ additions reached 4.509 million subscribers in comparison to 1.064 million in 1Q, 1.674 million in 2Q, and 1.771 million in 3Q.
9-month net revenues reached L.E 8,008 billion representing an increase of 9% over the same period last year
Alex Shalaby commented on Q3 figures that Mobinil still in first place in spite of extreme competition in the market.
“The Egyptian market witnessed very aggressive competitive price moves during Q3, but Mobinil still maintained its leadership position through providing a unique and diversified portfolio of products to serve its customers” Shalaby said.
On Tuesday, CI Capital upgraded Mobinil stock target price at LE 213, with sell recommendation.
CI Capital stated that this estimation is based mainly on company’s performance in Q3 2009, as it contemplated better performance due to seasonality. Adding that, however, Ramadan on-net aggressive promotions curtailed revenue growth q/q. Having grown by just 5% y/y in 3Q09, revenues might miss management’s 10% growth target for 2009.
On Wednesday, Mobinil CFO, Khalid Ellaicy said that Mobinil will see slowing subscriber growth in the fourth quarter, with ARPU declining "for the foreseeable future.
"We are talking about ending the year a little bit over the 25 million subscriber mark," Ellaicy said after the firm posted an 8% decline in Q3 profits, towards the lower end of expectations.
Promotions offered over the summer period and during the Muslim holy month of Ramadan hit the firm's third quarter numbers. Pricing has returned to pre-Ramadan levels, but Ellaicy said average customer spending would likely keep falling.
"We are talking about ending the year a little bit over the 25 million subscriber mark," Khalid Ellaicy noted.
On Thursday, Credit Suisse raised its price target on Mobinil by 7 % and said it now assumes the company will pay out a much reduced dividend for this year and next as it looks to finance its licence fee payments in 2010.
The brokerage raised its target to L.E 230, but lowered its 2009 earnings forecast by about 2 percent, after Mobinil reported an 8.1 percent fall in third-quarter net profit.
Credit Suisse said it assumes the company will pay out a dividend of L.E 5 per share for this year and next, compared with its prior view of L.E 11 and L.E 13, respectively.
Pioneers Holding - (PIOH) stock closed on Sunday at LE 6.58, while closed on Thursday at LE 6.68 with 2% increase (L.E 0.1).
The highest price for the stock during the week came on Monday when it closed at LE 6.71, while the lowest price for the stock during the week came on Tuesday, at LE 6.38.
On Wednesday, EGX reported that Pioneers is in talks to buy a stake in investment bank Beltone Financial.
Pioneers confirmed the statement issued by the exchange but declined to give details of the deal.
"Pioneers Holding said there was contact between the company and Beltone for acquiring a percentage of the capital (of Beltone)," the exchange statement said, adding that the firms had not reached an agreement.
Beltone declined to comment immediately but said a statement regarding the talks would be issued early next week.
On Thursday, the company explained that its negotiation with Belton to acquire a stake do not include any share of Beltone direct investment arm “Beltone capital investment”.
It added that current negotiation is limited to Beltone brokerage activities, financing consultations and portfolio and funds management.
It is notable that, Beltone expected to conclude its negotiation with Pioneers in the next three days. It sets Sunday 8/11/2009 (before start of trading session) as maximum deadline.
EGX administration suspended trading on companies’ shares until being notified with negotiation outcomes.
Al Arafa Investment and Consulting - (AIVC) stock closed on Sunday at $ 0.76, while closed on Thursday at $ 0.72. The stock dipped 5% representing $ 0.04 this week.
The highest price for the stock during the week came on Monday when it closed at LE 5.65, while the lowest price for the stock during the week came on Thursday at LE 5.24.
On Sunday, Al Arafa said it will produce 12,000 men's suits in 2010 for French fashion brand Cerruti 1881 on behalf of Italian textiles firm Forall Group.
Arafa Holding would be designing, manufacturing and marketing Cerruti 1881 men's suits for the company.
Forall Group, which owns various fashion brands, won a renewable five-year licence in July 2009 to produce and distribute Cerruti 1881 across the Middle East, North Africa, Latin America and Asia, a statement from Arafa Holding said.
Arafa said that Forall had signed a new agreement to expand European coverage of the Cerruti 1881 licence with exclusive presence in the United Kingdom, France, Spain, Germany, Eastern Europe, Scandinavia and in countries of the former Soviet Union.
On Monday, CI Capital described Arafa production of 12,000 men's suits for Cerruti 1881 as positive and added that this agreement will support the company’s vertically integrated strategy.
The brokerage believed that suits manufacturing within the company’s production lines would enhance the company's margins given that the EBITDA margin of the manufacturing line of business is higher than that of the retail segment.
On Tuesday, CI Capital cut Al Arafa target price to $ 0.79, while it raised company LTFV to US$1.28/share due to lower outstanding net debt, with Underweight recommendation.
The brokerage explained that despite the solid strategy of the company, the industry is not immune to the global economic downturn. Company performance this year has been hit by the global economic meltdown, especially the UK.
However, CI Capital expressed optimism over company performance in 2H/09 due to recent evidence of a recovery in the British economy as well as the appreciating value of the GBP.
T M G Holding - (TMGH) stock closed on Sunday at LE 7.06, while closed on Thursday at LE 6.98, lower by 1 % (about L.E 0.08).
The highest price for the stock during the week came on Monday when it closed at LE 7.23, while the lowest price for the stock during the week came on Thursday at LE 6.98.
It is worth mentioning that, T M G has earlier announced that construction process in KSA project will begin next year with a total investments value ranging between 6 billion and 7.5 billion Saudi riyals.
Moreover, the project, which spreads over 4 million, is expected to generate revenues of 8 billion to 10 billion Saudi riyals and will be completed within six years.
Orascom Construction Industries (OCI) - (OCIC) stock closed on Sunday at LE 253.59, while closed on Thursday at LE 241.02, lower by 5 % (about L.E 12.67).
The highest price for the stock during the week came on Monday when it closed at LE 255.28, while the lowest price for the stock during the week came on Thursday at LE 241.02.
On Thursday, Citigroup raises Orascom Construction Industries (OCIC) price target to LE 270 from LE 240; keeps Buy rating.
Sectors performance:
The most active sectors all through the week were Real Estate, Construction and materials, Financial Services excluding Banks, Food and Beverage and Telecommunications.
Real Estate sector came first in terms of performance, as it achieved total traded value of LE 777,989,812.
The sector closed last week at 1282 points, while it closed today session at 1184 points, representing a retreat of 98 points.
Construction and materials sector came second in terms of performance; it achieved total traded value of LE 550,608,703.
The sector closed last week at 1569 points, while it closed today session at 1439 points, representing a retreat of 130 points.
Regarding Financial Services Excluding Banks second, as it achieved total traded value of LE 432,772,689.
The sector closed last week at 893 points, while it closed today session at 847 points, representing a retreat of 46 points.
Considering Food and Beverage sector, it achieved total traded value of LE 368,125,634.
The sector closed last week at 1220 points, while it closed today session at 1085 points, representing a retreat by 135 points.
Finally, Telecommunications sector achieved total traded value of LE 347,170,489.
The sector closed last week at 593 points, while it closed today session at 560 points, down by 33 points.
Regarding the investors’ activity:
-Local investors led the market activity all through the week, followed by Foreign and Arab investors respectively.
-Foreign investors were the most active buyers all through the week as they dominated the market by the value of LE 130,686,024.
-Arab investors were also net buyers by the value of LE 17,608,230.
-Local investors were best sellers through this week by the value of LE 157,294,254.
Retail and Institutions’ activity:
Retail activity led the market all through the week as it ranged between 45.53 % –70.80 %.
While Institutions activity ranged during this week between 29.19 % – 54.46 %.