Egypt Stocks Gain EGP15.3bn in Week, EGX30 Surges 3.4%

In a week, Egypt’s stock Exchange (EGX) gained 15.3 billion Egyptian pounds. In addition, the country’s main stock index, EGX30 inched up by 3.4% in a week, with an increase of 304.37 points, ending Thursday’s transactions at 9420 points, versus 9115.63 points at the end of a week earlier.

The main gauge index registered its highest point on Tuesday closing at 9530.58 points, whereas its lowest point recorded on Sunday at 9306.65 points.

In addition, the mid- and small-cap index, the EGX70 grew in a week by 1.3% closing at 617 points during Thursday’s session, compared to 609 points at the end of a week earlier. The price index, EGX100 also hiked by 1.5% concluding to 1126 points during Thursday’s session, against 1109 points at the end of a week earlier.

Furthermore, the market capitalization closed at EGP 519.542 billion last Thursday, compared to EGP 504.234 billion at the end of a week earlier.

Turnovers: Higher

Through the week, the trading volume hit around 1.4 billion securities, compared to 1.2 securities at the end of a week earlier. For the traded value, it reached EGP 5 billion against EGP 4.8 billion a week earlier.

Investors’ Activity:

Local investors led the market activity all through the week with 81.77%, followed by foreign and Arab investors with 9.99% and 8.24%, respectively, after excluding the deals.

Foreign investors were the most active buyers during the week earning the value of EGP 284.64 million, after excluding the deals.

Arab investors were to sell by value of EGP 12.21 million, after excluding the deals.

Moreover, institutions seized 38.39% of total trading through the week; while individuals attained 61.61%. Institutions were the most active buyers during the week earning the value of EGP 295.57 million, after excluding the deals.

Market Remarks

Orascom Construction Industries Wins Tax Battle with Egypt Authorities

The ongoing tax dispute between Orascom Construction Industries (OCI S.A.E.) ends in favour of OCI Company, parent company OCI N.V. announced today.

In a statement on Tuesday, OCI N.V. said the Egyptian Tax Authority’s (ETA) Independent Appeals Committee, the responsible body overseeing the tax dispute between OCI N.V.’s subsidiary, OCI S.A.E., and the ETA, has ruled in favor of the Company.

The tax dispute was initiated on 6 October 2012, when the former President of the previous regime gave a public speech in which he stated that a number of companies were to be targeted for tax evasion. Shortly thereafter, OCI S.A.E. received an unsubstantiated tax evasion claim related to the sale of its cement assets to Lafarge SA in 2007. This was filed against OCI S.A.E. despite there being no official investigation to support these accusations.

The board, management and auditors KPMG always maintained the view that OCI S.A.E. had soundly applied and followed all laws and regulations at all times. However, given the significant strain and repercussions faced by OCI S.A.E., which would not have been in the best interest of the Company’s stakeholders, a settlement was reached whereby approximately US$ 1 billion would be paid over a five-year period.

All other previous preliminary rulings related to the tax dispute that were appealed and pending the Appeals Committee’s final ruling are expected to be nullified, including all judgments issued against Chief Executive Officer Nassef Sawiris.

OCI N.V. CEO Nassef Sawiris commented: “We are pleased that this dispute has now been resolved. This is not only a victory for the Company and all its stakeholders, but also for the rule of law and the general investment climate in Egypt. The outlook for Egypt is very promising, and we continue to be committed to channeling resources towards growth and new investments in the country.”

OCI CEO Plans ‘Huge’ Investments in Egypt after Tax Victory

Following the resolution of a tax dispute with Egypt’s tax authority, Egyptian billionaire Nassef Sawiris said on Tuesday his company, Orascom Construction Industries (OCI S.A.E.), would make “huge” investments in Egypt.

“Our first investment is going to be presented to the government this week for a multi-billion dollar project related to the power sector in partnership with a prominent Middle Eastern group,” Sawiris, one of the richest men in the country, told Reuters last Tuesday.

Orascom Construction Industries, UAE’s IPIC to Develop Power Plant in Egypt

Orascom Construction, the Engineering & Construction Group wholly owned by OCI N.V. (NYSE Euronext: OCI), and the International Petroleum Investment Company (IPIC), announced Wednesday their intention to jointly and immediately commence studies to develop, construct, and operate a coal-fired power plant in Egypt.

The power plant is expected to have a capacity of up to 2,000 to 3,000 megawatts (MW), utilizing advanced clean-coal technology that complies with EU standards for emission control.

Pending technical studies and governmental and corporate approvals, Orascom Construction and IPIC would aim to develop this project on a fast-track basis in the vicinity of El Hamarawein port on the Red Sea coast, which is currently dedicated to the export of phosphates, to help meet Egypt’s rising demand for electricity.

Orascom Construction’s Chief Executive Officer, Osama Bishai, and IPIC’s Managing Director, His Excellency Khadem Abdulla Al Qubaisi, have met with key members of the Egyptian government, including His Excellency Prime Minister Ibrahim Mahlab, to communicate their interest in pursuing the fast-track development of the proposed project.

Nassef Sawiris, Chief Executive Officer of OCI N.V., commented, “Growth in power generation is crucial to the sustained development of the Egyptian economy. We are pleased that we, in partnership with IPIC, can contribute to this and believe that such joint efforts with IPIC lay a solid foundation for collaboration on future projects. This is also a strategic step in developing Orascom Construction’s infrastructure focus in Egypt and other key regional markets.”

“As a company wholly owned by the Government of Abu Dhabi and under the direction of Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE and Ruler of Abu Dhabi, IPIC is proud to play a role in assisting Egypt in meeting its current and future energy needs,” said His Excellency Khadem Al Qubaisi.

“IPIC and Orascom Construction’s cooperation in this project represents a combination of energy industry expertise, construction capability, and strong local presence in Egypt,” continued His Excellency. “IPIC’s success over 30-years is due to the company’s focus on utilizing synergies within our portfolio of investments, optimizing the expertise within these companies, and investing in projects that act as a catalyst of change.”

OCI N.V. Plans Dual Listing in Egypt, UAE for Construction Business

Orascom Construction Industries’ parent company OCI N.V. reveals today its plans for a dual listing of its shares in both Egypt and UAE markets.

In a statement on Wednesday, OCI N.V. (NYSE Euronext: OCI) announced today its intention to pursue a dual listing of its Engineering & Construction Group in both Egypt and the United Arab Emirates. Preparations for the separation of the Engineering & Construction Group from OCI N.V. are underway and the new company is targeting to list on the two exchanges during the first quarter of 2015, subject to necessary regulatory approvals as well as Board and shareholder approvals.

The company hopes to be among the first companies to benefit from the new dual listing rules that the Egyptian regulatory authorities are currently embarking on.

NASDAQ Dubai, Egypt Clearing House Sign Dual Listing Agreement

NASDAQ Dubai has agreed today with Egypt’s securities clearing house to promote cross-listings of Egyptian firms’ shares in Dubai, a sign of growing investment links between the two economies.

The Share trading in Dubai as well as Cairo will give issuers greater access to international investors.

The deal between NASDAQ Dubai, the smaller of Dubai’s two stock exchanges, and Misr for Central Clearing, Depository and Registry (MCDR) establishes technical ties that will facilitate dual listings, the two bodies said on Thursday.

In a release published on Thursday, MCDR’s chairman Mohamed Soliman Abdel Salam said the agreement would also encourage portfolio investment flows from the United Arab Emirates into Egyptian markets, by allowing UAE investors to clear their trades via NASDAQ Dubai.

“This will reduce risk for investors,” Salam told reporters, estimating that UAE investment in Egypt’s stock market now totalled about 14 billion Egyptian pounds ($2 billion). The market has a capitalisation of around $72 billion.

Hamed Ali, NASDAQ Dubai’s chief executive, said a number of Egyptian companies had expressed interest in the idea of dual listings to increase their access to cash-rich Gulf investors and raise their profile in the region.

UAE investors’ interest in Egypt has been increasing since Islamist President Mohamed Mursi was overthrown by the army last year, prompting the UAE and other Gulf states to provide billions of dollars of aid to Cairo.

Salam said MCDR was also exploring the possibility of a deal to promote dual listings with the Abu Dhabi Securities Exchange.

Leave a comment