EGX30 dips 3.94 % this week amid political tensions [Arab Finance (Egypt)]
(Arab Finance (Egypt) Via Acquire Media NewsEdge) Arab Finance : Egypt's stock exchange benchmark EGX 30 index dipped by 3.94 % this week, representing a decline of 223.1 points, ending Thursday's transactions at 5,439.29 points compared to 5,662.39 points at the end of last week. Regarding current week trading, the index hit its highest point on Wednesday closing at 5,482.13 points, where its lowest point recorded on Tuesday at 5,409.89 points. Egyptian stock exchange main index EGX30 started week in hash slide and sunk by 3.25 to close at 5,478.38 points on Sunday. Market trade volume reached 101,125,617 shares amounted to LE 775,804,225. Egyptian stock exchange main index EGX30 retreated by 1.18 % to close at 5,413.78 points on Monday. Market trade volume reached 149,194,481 shares amounted to LE 759,242,876.
Egypt's EGX30 Egyptian stock exchange main index EGX30 shrunk early loss and edged lower by 0.07 % to close at 5,409.89 points on Tuesday. Market trade volume reached 128,427,067 shares amounted to LE 939,059,568.
Egyptian stock exchange main index EGX30 reversed downside trend and advanced by 1.34 % to close at 5,482.13 points on Wednesday. Market trade volume reached 97,620,862 shares amounted to LE 523,043,506. The index returned to red area after fluctuated performance all over the trading session and retreated by 0.78 % to close at 5,439.29 points on Thursday. Market trade volume reached 139,902,388 shares amounted to LE 887,190,701. Companies' weekly performance highlights: Orascom Telecom Holding - ( ) ORTE closed last week at LE 3.73, while closed on Thursday at LE 3.62, dipping by LE 0.11 (3 %). Stock highest close during the week came on Sunday closing at LE 3.64, while the lowest close came on Monday at LE 3.53. On Sunday, Orascom Telecom Media and Technology Holding S.A.E. (OTMT) announced the completion of the negotiations with Orascom Telecom to sell its entire stake in MedCable, its fully owned subsidiary.
Both companies agreed the transfer by OTMT to OTH of MedCable would be affected at an enterprise value of Euro 12.3 million.
The decision to divest MedCable will serve to strengthen OTMT's profitability position and support its strategy to develop higher-growth / higher-yield businesses. On Monday, Weather Investments, chaired by Egyptian telecoms magnate Naguib Sawiris, launched its $5 billion claim against Algeria for allegedly inflicting damages to stakes it owned in the Egyptian Orascom Telecom Algerie, most popularly known as Djezzy, Al Arabiya reported. "The Algerian Government committed to a number of protections, including a promise to refrain from arbitrary interference in our operations, but has since 2008 pursued a campaign of interference and harassment which has cost Weather Investments over $5 billion in damages," Sawiris said in a statement. According to the statement released by Weather Investments, Algeria implicated breaches that range from imposing unjustified tax reassessments, a customs blockade preventing it from importing goods and network equipment, to imposing unjustified fines worth $1.3 billion among others.
"This is a bad development not just for us, but for all foreign investors in Algeria. The Algerian regime stands as a stark exception to a region which, on the whole, is beginning to engage global investors, pursue economic development and implement reforms attractive to the international business community," Sawiris said. Emmanuel Gaillard, head of Shearman & Sterling, the firm that is representing the Algerian government in the dispute, confirmed that Weather Investments initiated arbitration proceedings. "We intend to vigorously defend the case. We think the claimant has no case," said Gaillard, as quoted by Financial Times on Monday.
Gaillard explained that Weather Investment, as an indirect minority shareholder in Orascom Telecoms Algerie, cannot pursue the case.
"We don't see any room for a treaty breach," said Gaillard. On Wednesday, Audi Bank downgraded, in a recent study, Orascom Telecom fair value by 10% from EGP 5.00/share to EGP 4.49/share and adjusted rating from BUY to ACCUMULATE as a reflection of the 26% upside potential from the current price.
Audi stated that, this lower fair value is the direct result of two main reasons, the first is lower EBITDA margins for DJEZZY and further overhang regarding the resolution, and the second is due to higher net debt position at the firm level (USD 2.98 bn as of Q3-12 vs. USD 2.67 bn as of Q3-11 utilized in our initial valuation. Egyptian Financial Group - Hermes - ( ) HRHO closed last week at LE 11.25, while closed on Thursday at LE 10.71 (lowest close), dipping by 5 % (LE 0.54). Stock highest close during the week came on Sunday at LE 10.91. On Monday, Hermes reported consolidated financial results posting a net profit of LE 232,089,765 for the period from 01/01/2012 till 30/09/2012.
Noting that, it posted net profits of LE 286,014,466 for the same period of the previous year. Also on Monday, Hermes, the leading investment bank in the Arab world, released its consolidated financial results for the third quarter of 2012, reporting net income of EGP 45 million on total consolidated operating revenues of EGP 471 million. Group revenues rose 19% Y-o-Y in 3Q2012, driven by an 18% rise in Investment Bank revenue to EGP 176 million, reflecting an increase in revenues booked by capital market and treasury operations in 3Q2012.
Commercial Bank revenue rose 20% Y-o-Y to EGP 295 million in 3Q2012, driven by growth in net interest income and trading income. In 9M2012, Group revenue rose 9% Y-o-Y to EGP 1.4 billion.
Revenues for the quarter split as 63% contributed by the Commercial Bank and 37% by the Investment Bank. National Societe Generale Bank (NSGB) - ( ) NSGB stock closed last week at LE 44.65, while closed on Thursday at LE 39.25 (lowest close), sinking by LE 5.4 (12 %). Stock highest close during the week came on Wednesday at LE 41.35. On Thursday, NSGB announced that it has purchased 15990 shares of National Bank of Egypt's (NBE) stake in Sogolease Egypt Financial Lease. NSGB added, in a release sent to EGX that, such stake reaches 19.99 % of Sogolease to hike its stake to 59.99 % of its capital. Also on Thursday, Egyptian Financial Supervisory Authority (EFSA) announced that it has extended deadline of announcing Qatar National Bank – QNB tender offer to buy all shares of NSGB for 60 days starting from 27/11/2012 till 20/02/2013. Telecom Egypt - ( ) ETEL stock closed last week at LE 14.02, while closed on Thursday at LE 13.55, dipping by LE 0.47 (3 %). Stock highest close during the week came on Sunday at LE 13.55, while the lowest close came on Tuesday at LE 13.05. On Wednesday, Telecom Egypt announced that it is close to obtain an integrated telecom license which will benefit Egyptian telecom sector and the whole economy in general.
The company confirmed, in a release responding to EGX inquiries, its readiness to implement its strategy, which is coherent with its large base of subscribers, to transform to an integrated telecom provider. Ezz Steel - ( ) ESRS stock closed last week at LE 9.37, while closed on Thursday at LE 9.28, retreating by LE 0.09 (1 %). Stock highest close during the week came on Wednesday at LE 9.3, while the lowest close came on Monday at LE 9.02. On Sunday, Ezz Steel has regained one of two production licenses withdrawn by court order last year and is in advanced talks to secure the second, a company spokesman told Bloomberg. The company, Egypt's biggest publicly traded manufacturer of the metal, has paid 50 million pounds upon signing the Nov. 14 agreement with the Industrial Development Authority and will pay the government 330 million pounds more in five equal annual installments after an 18-month grace period, Kamel Galal, head of investor relations, said by phone. The license is for Ezz Rolling Mills, a 99 percent unit of the company. "The company has enough liquidity to pay this off so this is very positive for them," said Heba Sherif, analyst at Prime Securities SAE who has a buy recommendation on the stock with a 12.8 pound price estimate. "It brings down their cost per ton because it reduces their reliance on imported scrap metal." On Monday, Kamel Galal, Chief Financial Officer of Ezz Steel, revealed that Ezz paid LE 50 million (15 % of the license) out of LE 330 million total value, Almal newspaper reported..
He pointed out that, Ezz agreed with IDA to pay the remaining LE 280 million in 5 years after 18 months grace period from the first installment. Sectors performance: The most active sectors all through the week were Real Estate, Financial Services, Banks, Telecommunications and Construction and Materials. Real Estate sector achieved total traded value of L.E 421,397,625. Financial Services came second in terms of performance, as it achieved total traded value of L.E 281,254,099. Banks sector ranked third in terms of performance, as it achieved total traded value of LE 196,461,758. Regarding, Telecommunications it achieved total traded value of L.E 186,004,053. Finally, Construction and Materials, as it achieved total traded value of LE 136,588,795. Regarding the 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 L.E 88,998,378. - Arab investors chose also to buy by value of L.E 13,683,553. - Foreign investors were most active sellers this week by the value of L.E 126,778,592. Retail and Institutions' activity: Retail activity led the market all through the week as it ranged between 27.9 – 39.07 %.
While Institutions activity ranged during this week between 60.92 – 72.09 %.
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