Egypt’s benchmark index, the EGX 30 encountered mixed performance during the reporting period, slipping to 5,579 points on February 24 from 5,685 points on January 21, a decrease of 1.1%.

The political events are still the main mover of market performance. President Mohamed Morsi’s call for parliamentary elections to begin on April 22 outlines a four-stage vote that is hoped to conclude Egypt’s transition to democracy, with the new parliament scheduled to convene on July 6.

The Shura Council’s passing of an electoral law allows Morsi to set a date for the parliamentary elections was received by the market with a drop in the EGX 30.

The top story this month was Orascom Construction Industries (OCI), which declined 1.7% throughout the period to LE 264.90. OCI influenced this month with the news that OCI NV launched an exchange offer to acquire all of the outstanding Regulation S Global Depositary Receipts (GDR) of OCI in exchange for ordinary shares in OCI NV.

Furthermore, the company plans to subsequently launch an ADR program on the New York Stock Exchange. This transaction consists of the two following elements; an offer to acquire all of OCI’s Regulation S GDRs in exchange for OCI NV shares (the GDR exchange offer). This includes a mandatory tender offer to acquire all of OCI’s ordinary shares in exchange for OCI NV shares or cash at LE 280 per OCI share.

The National Société Générale Bank (NSGB) stock ended the period at LE 37.52, indicating an increase of 3.6% m-o-m. After getting the go-ahead from the Egyptian Financial Supervisory Authority, Qatar National Bank (QNB) announced the beginning of its bid for 100% (443.5 million shares) of NSGB on February 26 at LE 38.65 per share for a total of LE 17.1 billion.

Meanwhile, Moody’s credit rating agency has downgraded the stand-alone credit assessment of the National Bank of Egypt, Banque Misr, Banque du Caire, Commercial International Bank – Egypt (CIB) and the Bank of Alexandria.

The first three have been downgraded to Caa2 from B3, while the latter two were downgraded to B2 from B3. The downgrade pushed CIB 9.15% lower at the end of the reporting period to LE 34.27 per share with more than 20 million shares traded for a total turnover worth LE 719.3 million.

The bank had reported a 7% increase in 4Q2012 net profits to LE 588 million toward the end of the period. A statement from the bank showed that CIB had made record revenues totaling LE 5.34 billion during the year. At the end of the period, the bank’s board announced that it would raise legal reserves to LE 380 million for 2012 compared to LE 231 million in 2011 and made a recommendation for a cash dividend of LE 1.25 per share. 

Within the banking sector, Al Watany Bank of Egypt surged 19.6% to LE 19.54 per share. The bank had announced net profits of LE 304.1 million for 2012 which shows a 34.8% year over year increase.

Meanwhile, the Housing and Development Bank stock soared to LE 16.3 on the bank of positive news from its deputy managing director for retail banking who indicated that the bank’s retail portfolio had reached LE 3 billion.

Furthermore, the bank is reported to have signed a cooperation protocol with the housing ministry to facilitate the leasing of more than 2 million vacant residential units.

Within the cement sector, Sinai Cement closed the period 10.4% higher at LE 22.7 with 1.63 million shares traded for a total turnover of LE 37.2 million. The company announced unaudited consolidated financial results for 2012 showing profits of LE 108.4 million, which pale in comparison to 2011 net profits which equalled LE 324.5 million.

A cash dividend of LE 1 per share has been suggested and is pending the board’s approval.

South Valley Cement Company inched up to LE 4.27 with nearly 14 million shares traded for a total value of LE 59.8 million — an increase which can be attributed to the company’s financial results and cash dividends for 2012.

The company’s board of directors had approved increasing issued and paid-up capital by LE 120.5 million by distributing bonus shares at 1-for-20 at par value and without issue premiums or costs.

In the food sector, Delta Sugar closed up at LE 12.60, trading 900,050 shares for a total turnover of LE 11.1 million. The company announced net profits after tax of LE 239.6 million compared to LE 391.8 million reported the year before.

Company officials have made statements lately indicating investments worth LE 500 million in an ethanol production plant.

Juhayna Food Industries soared to LE 8.46 as the company announced a 27% increase in 2012 sales to LE 2.8 billion while it reported consolidated net profit after tax worth LE 325 million, up from LE 186 million a year prior.

Company officials also announced that new production plants in Assiut and Sixth of October City would become operational throughout this year, increasing the company’s capacities and creating new job opportunities. bt