EGX 30 Ends At 5510 Pts; Wednesday
During Wednesday closing session, the Egyptian Exchange (EGX) has trimmed its early losses to eventually reach EGP 1.6 billion as the capital market has amounted to EGP 380.452 billion.
The main index, EGX30 fell by 0.56% to close at 5510.56 p. EGX20 dived by 0.73% to finish at 6463.03 p.
Meanwhile, the mid- and small-cap index, the EGX70 inched lower by 0.47% to end at 502.79 pts. Price index EGX100 declined by 0.36% to conclude at 852.07 p.
Egypt’s benchmark share index rose 1.7% during Tuesday’s early session to its highest since June 2011.
Egypt’s Prime Minister Hesham Kandil has opened Tuesday’s early trading session. Kandil’s visit aims to convey a message to all investors that the Egyptian government’s top priority is to achieve economic growth. The prime minister also wants to explain that the government is seeking to improve and upgrade the capital market so that it would help to push the economic growth wheel forward.
Kandil has also emphasized on the key role played by the Egyptian Exchange’s plans for the firms to stimulate economic growth.
Osama Saleh – Minister of Investment, Dr. Ashraf Al-Sharkawy – the Chairman of the Egyptian Financial Supervisory Authority (EFSA), and Dr. Mohamed Omran – the EGX chairman had also attended EGX’s opening session.
“The EGX is actually a vivid stream of financing and pushing firms towards growth and expansions. It annually contributes with billions of Egyptian pounds towards supporting the development plans.” Kandil noted
Traded volume reached 153.116 million securities worth EGP 681.735 million, exchanged 33.734 thousand transactions.
This was after trading in 179 listed securities; 108 declined 63 advanced while 8 keeping their previous levels.
Egyptian and Arabs were net buyers seizing 63.31% and 8.32% respectively, of the total markets, with a net equity of EGP 33.726 million and EGP 7.990 million excluding the deals.
The main reason behind the EGX 30’s early slump was that non-Arab Foreigners net sellers seizing 28.38% of the total markets, with a net equity of EGP 41.717 million excluding the deals.
Leading Shares:
EGX’s leading shares witnessed unsteady performance.
Orascom Telecom Media & Technology Holding:
Orascom Telecom Media & Technology Holding (OTMT.CA) maintained Tuesday’s levels at EGP 0.58.
El Sewedy Electric:
El Sewedy Electric (SWDY.CA) rose by 0.51% to conclude at EGP 25.50.
This was after El Sewedy Electric had announced Wednesday that it signed a $56 million cable supply deal with the Iraqi Ministry of Electricity. The company said the deal will be for one year.
The company reported Monday a consolidated net profit of EGP 133.293 million during the first half of 2012, 62.2% down from a net profit of EGP 352.297 million a year earlier.
El Sewedy revenues during H1/2012 went down by 5% to EGP 7.13 billion, compared to EGP 7.49 billion during H1/2011.
Analysts say political turmoil in Sewedy’s main Middle East markets, especially Syria, has led to weaker demand that forced it to cut some production.
EFG-Hermes issued a report Wednesday on Elsewedy Electric, defining the stock’s fair value at EGP 30, compared to its market price of EGP 25.4, and recommending a “Buy”.
On the other hand, NBK Capital issued a report also Wednesday on El Sewedy Electric, fixing the stock’s 12-month fair value at EGP 23.0 with ‘Hold’ recommendation.
Orascom Construction Industries:
Orascom Construction Industries (OCIC.CA) went up by 0.04% to end at EGP 284.15.
Mona El Shazly, analyst at Pharos Research, commented on the news that the Investors Relations of Orascom Construction Industries (OCI) stated that the methanol production line of OCI Beaumont in North America has commenced operations. The company will start selling its methanol production locally in the US as of September 2012.
El Shazly said this news is positive, adding that the new line is part of OCI’s expansion plan in the fertilizers segment in North America. OCI Beaumont is an integrated ammonia and methanol production facility located in Texas, North America. The ammonia plant has already commenced production in Q1-12 on low capacity, and is on track to reach its full capacity of 0.25m tons per annum (tpa).
The analyst indicated that the methanol plant has a production capacity of 0.75m tpa and was scheduled to commence operations in June 2012. However, the production has been delayed to Q3-12. OCI has signed a long-term off take agreement with Methanex Corporation, the world’s largest supplier of methanol, to sell a portion of its methanol production from the new line.
Talaat Moustafa Group:
Shares of Talaat Moustafa Group (TMGH.CA) led the downwards as they dived by 1.68% to close at EGP 4.69.
Orascom Telecom Holding:
Orascom Telecom Holding (OTH) (ORTE.CA) fell 1.34% to finish at EGP 3.69.
Orascom Telecom Holding (OTH) (ORTE.CA) announced that it will go on completing the necessary procedures to go for the international arbitration against People’s Democratic Republic of Algeria in respect of the unlawful actions taken since 2008 by the Algerian government against Orascom Telecom Algerie (OTA) – Djezzy.
Khalid Al Leithy, Deputy Chief Finance Officer of Orascom Telecom – OT, said the company will continue completing the arbitration procedures so as to reach a solution with the Algerian government.
“If Vimpelcom reaches a settlement with the Algerian government, Orascom will not go for the International arbitration.” Al Leithy added
Leithy said talks between Vimplecom and the Algerian government on acquiring a controlling stake in Djezzy are continuing, but he noted that: “Orascom will not accept to give up the group’s right to manage its Algerian unit.”
Al Leithy also mentioned that both Orascom and Vimplecom seek to end all the pending issues with the Algerian government without giving up their legal and financial rights to manage Djezzy.
Citadel Capital:
Citadel Capital (CCAP.CA) inched lower by 0.83% to conclude at EGP 3.58.
Commercial International Bank:
Commercial International Bank- Egypt (CIB) (COMI.CA) went down by 0.79% to close at EGP 31.42.
Capital Intelligence (CI), the international credit rating agency, announced Wednesday that it has affirmed Commercial International Bank (CIB)’s Long and Short-Term Foreign Currency Ratings (FCR) at ‘BB+’ and ‘B’, respectively.
EFG-Hermes:
EFG-Hermes Holding (HRHO.CA) dipped by 0.24% to conclude at EGP 12.62.
EFG-Hermes board of directors announced the date of the shareholders’ extraordinary meeting.
The board of EFG-Hermes Holding invited Thursday shareholders to attend an extraordinary general meeting on Sunday, 16/09/2012. EFG-Hermes had said Sunday it will announce the date of its extraordinary shareholders meeting with a week.
Shareholders will discuss the board’s report on strategic partnership with Qatari QInvest . They will also look into the fair value report by Grant Thornton, as regards defining fair values of the companies subject to the partnership.
The meeting will be discuss selling Hermes’ brokerage stake to EFG-Hermes Qatar for $250 million.
A dividend plan at EGP 4 per share will also be discussed in the meeting, taking into consideration the relevant stock split or treasury shares repurchase.
The company’s shareholders will further discuss waiving trade mark EFG-Hermes to Hermes Qatar and other relevant activities.
Pharos commented on the news that EFG-Hermes Holding will hold its 2nd extraordinary shareholder meeting (EGM) on Sept. 16th.
Hany Genena, CFA, Head of Research, Pharos Securities Brokerage, stated, “We reiterate our negative views on the deal for current shareholders”. Genena stated that the cash dividend is akin to a liquidation dividend and any possible upgrade in the valuation of the cyclical investment banking, asset management and brokerage businesses due to the recent improvement in market conditions has already been capped by the deal terms and the call option held by QInvest on the remaining 40.0% stake.
