Egyptian Exchange (EGX) benchmark EGX30 index dipped by 1.57 % this week, representing a retreat of 70.51 points, ending Thursday transactions at 4,419.04 points compared to 4,489.55 points at the end of last week.
Regarding current week trading, the index hit its highest point on Sunday closing at 4,471.83 points, where its lowest point recorded on Monday at 4,394.32 points.
Egyptian stock exchange main index EGX30 started week in red after fluctuated session and edged lower by 0.39 % on Sunday to close at 4,471.83. Market trade volume reached 48,177,306 shares amounted to EGP 771,430,575.
EGX30 widened red gap and retreated by 1.73 % on Monday to close at 4,394.32. Market trade volume reached 65,054,653 shares amounted to EGP 451,544,290.
The index advanced by 1.24 % on Tuesday to close at 4,448.84. Market trade volume reached 49,812,462 shares amounted to EGP 231,098,550.
EGX30 retreated by 0.62 % on Wednesday to close at 4,421.38. Market trade volume reached 131,244,004 shares amounted to EGP 298,053,961.
EGX30 shrunk early loss and edged 0.05 % lower on Thursday to close at 4,419.04. Market trade volume reached 106,555,663 shares amounted to EGP 1,234,038,572.
Companies’ Weekly Performance:
EFG-Hermes Holding Company – (HRHO.CA) stock closed last week at EGP 10.63, while closed on Thursday at EGP 10.9.99 (lowest close), sinking by 6 % (EGP 0.64).
The highest close during that week came on Sunday closing at EGP 10.54.
On Monday, Egyptian Financial Supervisory Authority (EFSA) announced that EFG – Hermes submitted a request to call for EGM to discuss reducing company’s capital through writing off treasury stocks balance with the company for more than one year.
Also on Monday, Planet IB stated that it is ready to submit copies of investors’ letters of approvals to offer capital investments and finance packages required to complete acquisition deal over Hermes, in order to get BOD approval to start due diligence review before submitting the mandatory offer.
Ahmed El-Houssieny, Planet CEO, stated that Hermes neither requested these letters nor showed interest about the proposed offer.
On Tuesday, A tie-up between Egyptian investment bank EFG Hermes and Qatar’s QInvest, approved by EFG shareholders on June 2, is legally binding and can only be reversed through legal action, EFG said.
After EFG announced plans to fold its main investment banking operation into a joint venture controlled by QInvest, a group of Egyptian and Gulf Arab investors made a buy-out approach for EFG that the bank’s management has rebuffed, Reuters reported.
“With the approval of the company’s general assembly of the agreement signed with QInvest, the agreements have become binding on the two parties,” EFG said in a statement. Backing out of the QInvest deal would amount to a breach of contract, it said.
On Thursday, Planet IB Consortium has gained an initial approval of Arab African International Bank (AAIB) to arrange a loan to finance part of Hermes acquisition deal, Alborsa newspaper reported.
We showed readiness to arrange the loan in case of deal existence adding that we didn’t start studying the loan, an official from the bank said.
When asked about commitments of providing the loan, he said “NO”.
It is worth noting that, the consortium is seeking to collect around $ 700 million loans, in addition to around $ 400 million ownership rights of institutions and investors including Naguib Sawiris.
Orascom Construction Industries (OCI) – (OCIC.CA) closed last week at EGP 249.07, while closed on Thursday at EGP 242.74 (lowest close), dipping by 3 % (6.33).
Stock highest level recorded on Sunday closing at EGP 248.
On Sunday, CI Capital stated that it expects OCI to benefit from infrastructure projects in Libya.
Muhammad El-Ebrashi, analyst at CI Capital, stated that he expects that OCI might have been invited to participate in the Libyan initiative.
Accordingly, its backlog might increase from USD6.4 billion level by 2011 year end. Also, we expect that the Libyan’s EBITDA margin might be as competitive as those of its Iraqi awards and higher than its current guidance of 13%.
On Monday, OCI reported a 54 percent fall in first-quarter net income, partly due to the sale of a stake in U.S. grains merchant Gavilon and also lower sales volumes and a drop in prices at OCI’s fertilizer business.
Net profit fell to $94 million from $206.3 million in the same period a year earlier. That compares to a consensus estimate by 14 analysts of $129.5 million.
Consolidated revenue rose by 1.4 percent to $1.28 billion from $1.26 billion while earnings before interest, tax, depreciation and amortization dropped 24 percent to $255.8 million from $334.8 million in the same period a year earlier.
“Our first quarter results have been impacted by lower selling prices for ammonia and melamine,” Chairman and Chief Executive Officer Nassef Sawiris said in a statement.
“Moving forward, we expect to weather the impacts on the first quarter results with the resurgence in fertilizer prices during late March and increases in production rates from our new fertilizer plants,” Sawiris said. He also said the firm expected an improvement in earnings for the rest of the year.
Also on Monday, CI Capital maintained OCI Strong Buy recommendation, with TP set at EGP 294/share.
CI Capital stated that, OCI 1Q12 earnings came in at $ 94 million, falling short of CI Capital Research estimates (CICRe) and market consensus of EGP123mn and EGP127mn, respectively.
Although OCI’s 1Q12 earnings missed expectations, we believe that the fertilizer price increase in 2Q12 as well as the rebound in contracting activities (notably from Iraq and possibly Libya), might enhance the company’s backlog and margin performance.
Further, management is currently working towards fulfilling GAFI’s requirements to finalize the demerger process by 3Q12.
On Wednesday, Goldman Sachs maintained Orascom Construction Industries price target at 483 EGP; rating buy, Reuters reported.
Orascom Telecom Media And Technology Holding – (OTMT.CA) closed last week at EGP 1.23, while closed on Thursday at EGP 1.32, jumping by 7 % (EGP 0.09).
Stock highest close during the week came on Wednesday closing at EGP 1.35, while the lowest level recorded on Monday closing at EGP 1.18.
OTMT said on Tuesday it would distribute a 1.05 Egyptian pound ($0.17) per share dividend following the sale of its main asset, Egyptian Company for Mobile Services (Mobinil) – (EMOB.CA).
OTMT was formed in November from assets controlled by Egyptian businessman Naguib Sawiris after he sold most of his global telecom interests to Russia’s Vimpelcom.
The company last month sold its stake in Mobinil to France Telecom, netting it about $1 billion.
OTMT said it made a net profit of 4.56 billion Egyptian pounds from its establishment in November until June 7, 2012, and had retained earnings of 1.74 million pounds from before its formation.
Also on Tuesday, OTMT announced that Khaled Bichara, Chief Executive Officer, has submitted his resignation from his position as CEO to the Board of Directors of OTMT during its meeting today, while resuming his role as member of the board.
Mr. Bichara will continue to assume all responsibilities of his current position until the appointment of the new CEO is completed and registered with regulatory authorities.
The Board has approved the nomination of Mr. Karim Bichara as the successor to this position subject to the Shareholders’ approval of his admission to the board of OTMT during the upcoming general assembly meeting scheduled to be held on 28 June 2012.
CI Capital reiterated OTMT Strong Buy recommendation with a TP of EGP 2.1 per share.
Such valuation came after company’s board proposed a DPS of EGP1.05 or EGP5.508bn for distribution, almost the total net proceeds from the sale of 29% of Mobinil.
While OTMT is yet to reveal its strategy, we believe it will continue to target telecom and internet.
El Sewedy Electric – (SWDY.CA) closed last week at EGP 22.04, while closed on Thursday at EGP 22.82 (highest close), upping by 4 % (EGP 0.78).
Stock highest level recorded on Monday closing at EGP 15.93, while the lowest close came on Tuesday closing at EGP 15.24.
Last Friday, Turkey’s Limak Insaat AS and Calik Holding AS made the highest joint offer for the Kosovo Energy Corp.’s distribution and supply unit, Kosovo’s government said Bloomberg reported.
Limak, a builder and energy group, and Calik, a holding with interests in energy, media and telecommunications, offered 26.3 million euros ($28.4 million) for Kosovo Energy Distribution and Supply, part of the company known as KEK. They outbid El Sewedy Electric of Egypt, which offered 22.8 million euros.
The asset sale authorities will review details of the bids and make a final decision “in the coming days,” said Kosovar Minister for Economic Development Besim Beqaj. Kosovo hired the International Finance Corp., the World Bank’s private lending arm, as the sale adviser.
On Sunday, CI Capital stated El Sewedy Electric to benefit from infrastructure projects in Libya.
Muhammad El-Ebrashi, analyst at CI Capital, stated that he expects El Sewedy might benefit indirectly although the IDA’s call might have not include SWDY.
However, he expects that the company might benefit from Libyan’s rehabilitation momentum. We note that the company has activity in the country and has several trading assignments including wind related supplies.
Sectors Performance:
The most active sectors all through the week were Telecommunications, Financial Services, Real Estate, Construction & Material and Banks.
Telecommunications sector achieved total traded value of EGP 336,373,115.
Financial Services came second in terms of performance, as it achieved total traded value of EGP 218,930,078.
Real Estate sector ranked third in terms of performance, as it achieved total traded value of EGP 132,175,428.
Regarding, Construction & Material it achieved total traded value of EGP 110,721,053.
Finally, Banks, as it achieved total traded value of EGP 59,774,628.
Regarding Investors’ Activity:
Local investors led the market activity all through the week, followed by Foreign and Arab investors respectively.
Local investors were the most active buyers this week earning the value of EGP 127,799,138.
Foreign investors were most active sellers this week by the value of EGP 104,918,095.
Arab investors chose also to sell by value of EGP 22,881,042.
Retail & Institutions’ Activity:
Retail activity led the market all through the week as it ranged between 8.25 – 57.68 %.
While Institutions activity ranged during this week between 42.31 – 91.74 %.
