The Egyptian Exchange’s benchmark EGX 30 index surged by 0.49 % this week, representing an increase of 27.98 points, ending Wednesday’s transactions at 5689.23 points compared to 5661.25 points at the end of last week.
Regarding current week trading, the index hit its highest point on Wednesday closing at 5,689.23 points, where its lowest point recorded on Monday at 5,640.75 points.
It is worth noting that, the EGX management announced that Thursday is an official holiday on the occasion of Prophet’s birth.
Earlier on Wednesday, dozens of the hardcore Ahli fans, or “Ultras”, were gathering outside the Egyptian Exchange’s headquarters in Downtown seeking to disrupt its trading session as a form of expression.
The Ultras groups were gathering as the Egyptian court’s hearing of Port Said football massacre is coming up on Saturday 26 February 2013.
Witnesses said dozens of the hardcore Ahli fans started to mass beside the EGX’s headquarters at around 09:00 a.m. Cairo time (07:00 GMT) noting that the number was still remarkably increasing chanting some slogans demanding severe retribution for the Port Said massacre perpetrators.
EGX sources told ‘Amwal Al Ghad’ that the Ultras’ gathering would not disrupt Wednesday’s trading session noting that the bourse will normally start its operations at 10:30 a.m.
The sources also added that its management was expecting such action as major events such as the second anniversary of the January Revolution and the court’s hearing of Port Said football massacre are coming up very soon. Accordingly, the management has adopted all the necessary procedures to prepare for any potential violence that could disrupt the headquarters’ activities.
Accordingly later on Wednesday, the EGX management had submitted a compliant to the country’s Prosecutor General in regard to the Ultras’ sit-in outside the bourse’s Downtown headquarters seeking towards its security and stability as being one of the country’s vital financial institutions.
Judge Khaled El-Nashar, Vice Chairman of the Egyptian Exchange, said the EGX management has filed a complaint to the Prosecutor General amid the sit-in staged by a group of hardcore fans ‘Ultras’ this morning outside the bourse’s headquarters seeking to disrupt its daily trading session.
El-Nashar asserted that the concerned authorities have to ensure the stability of EGX’s headquarters Downtown as for the bourse is one of the country’s vital financial institutions.
Meanwhile, the country’s Prosecutor General Talaat Abdallah has referred the EGX’s complaint in regard to the Ultras’ sit-in outside the headquarters in Downtown to Central Cairo Prosecution.
Companies’ Weekly Performance Highlights:
Orascom Construction Industries (OCIC.CA) closed last week at EGP 267.17, while closed on Wednesday at EGP 265.94 (lowest close), dipping by EGP 1.23.
Stock highest close during the week came on Sunday at EGP 272.23.
Reuters reported last Friday that Bill Gates is among a group of U.S. investors which has committed $1 billion to buy a stake in Egyptian construction and fertilizer company OCI NV in one of the largest foreign currency inflows to Egypt since the 2011 revolution that swept Hosni Mubarak from power.
OCI NV said on Friday it had launched an exchange offer to acquire all of the outstanding global depositary receipts of parent firm OCI in exchange for ordinary shares in OCI NV.
The transaction also consists of an offer to acquire all of OCI’s ordinary shares in exchange for OCI NV shares or a cash amount of 280 Egyptian pounds ($42.41) per share, a 4 percent premium to Thursday’s closing price.
OCI NV is a wholly owned subsidiary of OCI SAE and the umbrella for OCI’s international operations. It was due to start trading on the NYSE Euronext in Amsterdam on Jan. 25, and plans to subsequently launch an American Depository Receipts program on the New York Stock Exchange, the statement said.
OCI NV said it had obtained commitments in excess of $2 billion from participating investors to pay shareholders who elect to sell their OCI ordinary shares for cash.
This includes $1 billion from U.S. investors comprising Cascade Investment, L.C.C., which is wholly owned by Bill Gates, as well as Southeastern Asset Management and Davis Selected Advisers, it said.
“This transaction is proof of the existing international appetite to invest in Egypt and bodes well for the Egyptian economy with more than $1 billion committed by U.S. investors,” OCI CEO Nassef Sawiris said in a statement.
“We expect our new profile to positively impact the Group’s ability to expand in Egypt and pursue its growth strategy.”
On Monday, OCI expects a transaction backed by Bill Gates for transferring the company’s shares into an Amsterdam-based unit to be concluded within four weeks, an executive told Bloomberg.
The first part of the transaction is an exchange offer of GDRs into Amsterdam-listed shares, and the second part is a tender offer to buy out the 25 percent local shares,” said Omar Darwazah, investor relations manager at Orascom Construction.
“Both are expected to be complete in four weeks.”
The Sawiris family and Dubai-based Abraaj Group, which together own a majority of shares in Orascom Construction, have already submitted their GDRs for exchange. OCI NV will seek the approval of Egypt’s markets regulator today to submit a mandatory offer to exchange all of Orascom Construction’s Cairo- listed shares for either for stock in the Amsterdam-based unit or 280 Egyptian pounds each, Darwazah said.
“In four weeks, we will re-group and see where we are,” Darwazah said. “We might need to do a secondary tender offer, depending on how many shares are left unresponsive.” The stake which investors including Gates will hold in OCI NV would depend on how many local investors opt to exchange their shares for cash, he said.
Also on Monday, OCI announced that negotiations with Taxes Authority over the ongoing dispute over taxes will be continued next Sunday to settle this dispute.
On Tuesday, Naeem stated that it sees OCI’s move to launch an exchange offer for its global depository receipts (GDRs) as an initiative to hasten the demerger between its construction and fertilizer arms, which currently remain stalled pending the resolution of issues over taxes and natural gas pricing in Egypt.
However, looking at the various probable outcomes, a swift EFSA approval (following a possible upward revision in the price from EGP280/share) would be beneficial to Egypt from a macroeconomic perspective (through USD1-2bn of inflows to the CBE).
Although the deal would mean a 6-7% drop in daily market volumes on the EGX, which would impact the brokerage/investment banking industry, we view this as a short-term phenomenon that would ultimately be offset by rebalancing of portfolios into other attractive Egyptian stocks.
As OCI is focused on a demerger, follow-on M&A activity seems likely if the EFSA gives its nod to the current transaction or if it approves the demerger locally.
OCI denied the news published of offering EGP 14 billion for conciliation and rejection of Egyptian Taxes Authority of this offer.
OCI added, in a release sent to EGX that, negotiations still ongoing with Taxes Authority considering this issue.
Orascom Telecom Holding – (ORTE.CA) closed last week at EGP 4.14, while closed on Wednesday at EGP 4.25, upping by EGP 0.11 (3 %).
Stock highest close during the week came on Tuesday at EGP 4.26, while the lowest close came on Monday at EGP 4.24.
On Friday, Orascom Telecom and WIND Mobile’s founder, Chairman and Chief Executive Officer Anthony Lacavera, jointly announce that they have entered into an agreement to transfer Mr. Lacavera’s shares of WIND Mobile Canada to Orascom. Mr. Lacavera, who plans to launch a new initiative, Globalive Capital in 2013, will remain WIND Mobile’s Chairman and CEO until closing, and will continue in a non-operational capacity as WIND Mobile Canada’s Honorary Chair. Upon closing, Orascom will own an indirect 99.3% interest in Globalive Wireless Management Corp. “As an entrepreneur, my vision was to ignite change across the wireless landscape in Canada, bringing more competition, better prices and superior service to Canadians,” said Mr. Lacavera. “And that is exactly what we did.
Now that I am confident WIND Mobile Canada is on a course for long-term success, I can focus on launching Globalive Capital to make targeted investments in companies that share my entrepreneurial vision and continue to support innovation through new and emerging entrepreneurs.”
Under the terms of the signed agreement, upon obtaining certain necessary regulatory approvals, Orascom will indirectly acquire all of AAL Corp.’s interest in Globalive Wireless Management Corp., which operates under the WIND Mobile brand in Canada. AAL Corp. is a holding company that is majority-owned by Anthony Lacavera. As part of the consideration to be paid to AAL Corp. (which includes cash consideration and a continuing economic participation in WIND Mobile for AAL Corp.), the Globalive group’s fixed-line assets (including the Globalive name and trademark) will be transferred to AAL Corp. “Anthony Lacavera has been the face and the voice of WIND Mobile Canada” said Ahmed Abou Doma, Chief Executive Officer of Orascom. “I wish to pay tribute to his leadership in making WIND Mobile the official alternative to the ‘Big Three’
incumbents in Canada.” Completion of the transactions is subject to satisfaction of certain conditions, including Canadian regulatory approval of the conversion of Orascom’s non-voting shares into voting shares, which would result in Orascom holding an indirect 65.1% voting and economic interest in Globalive Wireless Management Corp. immediately before completion of the transactions with AAL Corp. Orascom currently holds an indirect 32% voting interest and 65.1% economic interest in Wind Mobile Canada. AAL Corp. currently holds an indirect 66.7% voting interest and 34.3% economic interest.”
Regarding 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 this week earning the value of EGP 504,567,491.
Local investors chose also to buy by value of EGP 21,080,054.
Arab investors were most active sellers this week by the value of EGP 525,647,546.
Retail & Institutions’ Activity:
Retail activity led the market all through the week as it ranged between 46.32 – 59.72 %. While Institutions activity ranged during this week between 40.27 – 53.67 %.
