September 2005
As expected last month, the period from July 15 to August 15 proved that all eyes are on small caps. Indeed, the broad-based HFI Index slipped 3.13 percent to 41604.86, while the broader CIBC Index added 6.67 percent to 152.72. Advances continue to lead declines with a ratio close to last period's. By now, the market has digested second-quarter results, yet it is marching towards the September 7 presidential elections and the onset of new initial public offerings in the petrochemical sector.
Almost all large caps, except Orascom Telecom, reported their second-quarter results, which have to be submitted within 45 days of the period close to the Cairo & Alexandria Stock Exchanges (CASE). The results of Mobinil, Vodafone Egypt, Raya Holding and CIB all showed higher profits compared to the same period last year.
Mobinil issued its results in mid-August, well after Vodafone Egypt, exhibiting higher revenues and profits. It reported a jump in the number of subscribers compared to the previous quarter. Meanwhile, Vodafone Egypt reported its results in July, posting higher revenues and profits on the back of a growing prepaid market. Mobinil's price per share slid 1.9 percent to E 178.77, while Vodafone Egypt's firmed 0.3 percent at E 89.17.
Raya Holding filed its first-half results following its IPO on May 16. The company posted a 54-percent increase with net profits of E 10.6 million. Paradoxically, its stock prices fell 10.2 percent to E 16.08.
On the banking front, CIB reported a 22.5-percent increase in net profits of E 282.7 million in its first-half results. The bank's stock price reached E 47.70 , an increase of 1.2 percent. CIB had announced that it is looking to acquire National Bank for Development, perhaps in response to a successful bid by France's Socit Gnrale (SocGen) bank for Misr International Bank (MIBank). Having offered E 43.20 per share for MIBank, SocGen acquired 69.7 percent of the bank. MIBank's stock price dropped 10.8 percent to E 43.11 following the announcement, while National Socit Gnrale Bank (NSGB)'s stock price climbed 11.7 percent to E 67.97. It still remains to be seen whether or not MIBank will be brought under the NSGB umbrella or will be managed separately.
Cement has also been big news as several companies posted double-digit returns, namely Misr Beni Suef Cement, Misr Cement (Qena), National Cement and Sinai Cement. Sinai Cement almost doubled its profits in the first half of the year to E 65.5 million, thanks to an overall up-trend in cement prices.
Perhaps most interesting is the story of Suez Cement, which saw its stock price jump 25.1 percent to E 54.56 (post-split). The company, which swallowed Torah Cement a few years ago, is now looking to fully acquire ASEC Cement, previously the government-owned Helwan Cement, for E 29 a share. The company would have to finance the acquisition though a bridge loan of E 1.5 billion. ASEC Helwan's stock price closed just shy of the offer price at E 28.46.
As the summer season draws to an end, it raises two main questions: "Who will be Egypt's next president?" and "How well will the next IPO do?"
As expected last month, the period from July 15 to August 15 proved that all eyes are on small caps. Indeed, the broad-based HFI Index slipped 3.13 percent to 41604.86, while the broader CIBC Index added 6.67 percent to 152.72. Advances continue to lead declines with a ratio close to last period's. By now, the market has digested second-quarter results, yet it is marching towards the September 7 presidential elections and the onset of new initial public offerings in the petrochemical sector.
Almost all large caps, except Orascom Telecom, reported their second-quarter results, which have to be submitted within 45 days of the period close to the Cairo & Alexandria Stock Exchanges (CASE). The results of Mobinil, Vodafone Egypt, Raya Holding and CIB all showed higher profits compared to the same period last year.
Mobinil issued its results in mid-August, well after Vodafone Egypt, exhibiting higher revenues and profits. It reported a jump in the number of subscribers compared to the previous quarter. Meanwhile, Vodafone Egypt reported its results in July, posting higher revenues and profits on the back of a growing prepaid market. Mobinil's price per share slid 1.9 percent to E 178.77, while Vodafone Egypt's firmed 0.3 percent at E 89.17.
Raya Holding filed its first-half results following its IPO on May 16. The company posted a 54-percent increase with net profits of E 10.6 million. Paradoxically, its stock prices fell 10.2 percent to E 16.08.
On the banking front, CIB reported a 22.5-percent increase in net profits of E 282.7 million in its first-half results. The bank's stock price reached E 47.70 , an increase of 1.2 percent. CIB had announced that it is looking to acquire National Bank for Development, perhaps in response to a successful bid by France's Socit Gnrale (SocGen) bank for Misr International Bank (MIBank). Having offered E 43.20 per share for MIBank, SocGen acquired 69.7 percent of the bank. MIBank's stock price dropped 10.8 percent to E 43.11 following the announcement, while National Socit Gnrale Bank (NSGB)'s stock price climbed 11.7 percent to E 67.97. It still remains to be seen whether or not MIBank will be brought under the NSGB umbrella or will be managed separately.
Cement has also been big news as several companies posted double-digit returns, namely Misr Beni Suef Cement, Misr Cement (Qena), National Cement and Sinai Cement. Sinai Cement almost doubled its profits in the first half of the year to E 65.5 million, thanks to an overall up-trend in cement prices.
Perhaps most interesting is the story of Suez Cement, which saw its stock price jump 25.1 percent to E 54.56 (post-split). The company, which swallowed Torah Cement a few years ago, is now looking to fully acquire ASEC Cement, previously the government-owned Helwan Cement, for E 29 a share. The company would have to finance the acquisition though a bridge loan of E 1.5 billion. ASEC Helwan's stock price closed just shy of the offer price at E 28.46.
As the summer season draws to an end, it raises two main questions: "Who will be Egypt's next president?" and "How well will the next IPO do?"
© Business Monthly 2005
