Ghabbour extends drop on profit fears, Egypt index downBy ReutersFirst Published: January 25, 2009
CAIRO: Shares of Ghabbour Auto, Egypt's largest car maker by market value, posted their second largest daily fall in two months on Sunday, weighing on Egypt's market, on fears profits could slow.
Shares of the company, which said last year its profit growth could ease as Egypt's economy weakens, shed 6.14 percent to LE 13 ($2.34). It was the tenth straight session of declines for the stock, which has fallen 16.31 percent this year to Thursday's close.
The firm said in November it would not likely continue to match the 88 percent growth in net profit it posted in the third quarter as a worsening economy hits car sales.
"The automotive industry in the world is facing a lot of problems, so this normally has an effect on Ghabbour," said Karim Hosny, trader at Pharos Securities.
Shares of Orascom Construction Industries, Egypt's largest builder by market value, shed 5.42 percent to LE 101.40, extending declines to a fourteenth straight session.
Orascom Construction shares have dropped 23.62 percent this year to Thursday's close, the third worst performers this year on the CASE 30 index.
Shares of Orascom Telecom, the largest Arab mobile operator by market value, shed 8.53 percent to LE 21.23. Down 23.80 percent this year to Thursday's close, they are the second-worst performers on the index.
Shares of both firms were falling to match declines in their global depositary receipts, traded in London, late Thursday and Friday, when Egypt's local bourse was closed, traders said.
"Some investors who want to short Egypt's market have no other means of doing so then selling Orascom Construction and Orascom Telecom, which are the most actively traded," he says. "Some people anticipate the market will go down further."
The CASE 30 index fell 4.38 percent to 3,643.34 points, its thirteenth session of declines. The Hermes index dropped 3.64 percent to 355.60 points and the broader CIBC index shed 2.96 percent to 265.1 points. –Reuters
Monday, January 26, 2009
Thursday, January 15, 2009
Egypt indexes fall on US, European market woes
indexes fall on US, European market woes By Aziz El-Kaissouni First Published: January 15, 2009
CAIRO: Egyptian indexes fell on Thursday led by selling of Orascom Construction Industries and Orascom Telecom, as foreign investors took their lead from US and European markets that declined a day earlier, traders said.
On Wednesday grim US retail sales data and concerns that banks need even more money to save them from collapse pulled US and European share prices down.
"It was a reflection of the sharp decline in the United States and Europe...and once we broke the 4,500-resistance level (on the CASE 30 index), people started selling on stop-losses, which increased today's decline," said Mohamed Tawfiq of Delta Rasmala Securities.
Declining blue chips dominated trade on Thursday, with shares of market heavyweights Orascom Telecom and Orascom Construction Industries the day's first and second most heavily traded shares.
Mohamed Ashmawy of CIBC brokerage said that that although selling was across the board, Orascom Construction Industries and Orascom Telecom contributed significantly to the index's decline because of their weighting on the index.
The two firms together constitute about 35 percent of the benchmark CASE 30 index, and helped pull it down 3.35 percent to 4,327.01 points.
Orascom Telecom, which said on Wednesday that one of its subsidiaries would buy a Namibian mobile operator for $59 million, and would sell its M-link unit for $77 million, was the day's most heavily traded share by turnover.
Its shares last traded 5.53 percent down at LE 27 per share.
Shares in Orascom Construction Industries, which said on Wednesday it planned to buy back up to 0.9 percent of its shares, fell 4.52 percent to LE 127.49 per share.
The Hermes index lost 2.58 percent to 413.12 points. The broader CIBC index fell 2.30 percent to 297.2 points.
CAIRO: Egyptian indexes fell on Thursday led by selling of Orascom Construction Industries and Orascom Telecom, as foreign investors took their lead from US and European markets that declined a day earlier, traders said.
On Wednesday grim US retail sales data and concerns that banks need even more money to save them from collapse pulled US and European share prices down.
"It was a reflection of the sharp decline in the United States and Europe...and once we broke the 4,500-resistance level (on the CASE 30 index), people started selling on stop-losses, which increased today's decline," said Mohamed Tawfiq of Delta Rasmala Securities.
Declining blue chips dominated trade on Thursday, with shares of market heavyweights Orascom Telecom and Orascom Construction Industries the day's first and second most heavily traded shares.
Mohamed Ashmawy of CIBC brokerage said that that although selling was across the board, Orascom Construction Industries and Orascom Telecom contributed significantly to the index's decline because of their weighting on the index.
The two firms together constitute about 35 percent of the benchmark CASE 30 index, and helped pull it down 3.35 percent to 4,327.01 points.
Orascom Telecom, which said on Wednesday that one of its subsidiaries would buy a Namibian mobile operator for $59 million, and would sell its M-link unit for $77 million, was the day's most heavily traded share by turnover.
Its shares last traded 5.53 percent down at LE 27 per share.
Shares in Orascom Construction Industries, which said on Wednesday it planned to buy back up to 0.9 percent of its shares, fell 4.52 percent to LE 127.49 per share.
The Hermes index lost 2.58 percent to 413.12 points. The broader CIBC index fell 2.30 percent to 297.2 points.
Biting the billet: Kharafi ups Egypt investments with second billet license
Biting the billet: Kharafi ups Egypt investments with second billet licenseBy Theodore MayFirst Published: January 15, 2009
CAIRO: It’s a bold move at a time when the global economy seems have ground to a screeching halt: Al-Kharafi Group announced this week that it was awarded a contract by the Industrial Development Authority to produce an additional 6 million tons of steel billets annually.
This comes less than a year after Al-Kharafi, a privately owned Kuwaiti company, was awarded the first contract for producing steel billets in Egypt.
The newly awarded license is in line with the company’s plans to boost its investments in Egypt.
"We expect to inject new investments worth not less than $3 billion in the tourism sector and the majority will be in the industrial sector," Ibrahim Saleh, the company’s vice chairman, told Reuters late last December.
Al-Kharafi has agreed to pay LE 108 million in licensing fees as part of the deal, which is expected to bring somewhere around $800 billion in investment to the country.
Despite the roiled economic waters, steel industry experts anticipate that the length of time it takes for a steel plant to come online could help companies like Al-Kharafi miss the worst of the storm.
"There is a very long lead time with these plants,” said Patrick Gaffney, vice president for equity research at investment bank EFG-Hermes. “The earliest they could start production would be by late 2011, but I wouldn't be surprised if they didn't start production until 2013 for this second plant.”
Also boosting hopes that the Al-Kharafi project may be successful is that the company plans to produce billets rather than finished steel.
"They're doing billets, which is an input into the steel making process,” explained Gaffney.
Even if the demand for finished steel decreases, production of it is likely to exceed demand. Al-Kharafi will have the opportunity to sell billets for use in all finished steel products.
"As long as there is demand for steel products, then there will be demand for billets,” added Gaffney.
Steel prices have fallen precipitously in the last few months. "Prices have fallen since August of last year,” said Gaffney.
Even with prices low in Egypt, they’re even lower on the international market.
"If you look at where [steel on the international market] is trading, it's below Egyptian prices,” said Gaffney. “But if you include taxes and shipping, Egyptian prices are not too much higher."
Daily News Egypt reported earlier this week that with cheap prices internationally, steel traders are planning to import up to 100,000 tons in the coming months from the Ukraine, Turkey and Greece at a price range of between LE 3,500 and LE 3,700 per ton
The Managing Director of Ezz El Dekheila told Al-Alam Al-Youm earlier this week that he sees stability in steel prices in the Egyptian market and that current demand on steel has increased from the same period last year. This, he says, is an indicator that the Egyptian construction industry has not yet been affected by the global economic slowdown given increasing demand on building units, especially among low- and medium-cost housing.
Prices on the London exchange fell dramatically over the second half of the year, down 70 percent between June and December of last year.
Al-Kharafi’s investment was a bold one given the economic climate and the slumping steel prices. But since it will take several years for the new plants to come online, the markets may have plenty of time to recover
CAIRO: It’s a bold move at a time when the global economy seems have ground to a screeching halt: Al-Kharafi Group announced this week that it was awarded a contract by the Industrial Development Authority to produce an additional 6 million tons of steel billets annually.
This comes less than a year after Al-Kharafi, a privately owned Kuwaiti company, was awarded the first contract for producing steel billets in Egypt.
The newly awarded license is in line with the company’s plans to boost its investments in Egypt.
"We expect to inject new investments worth not less than $3 billion in the tourism sector and the majority will be in the industrial sector," Ibrahim Saleh, the company’s vice chairman, told Reuters late last December.
Al-Kharafi has agreed to pay LE 108 million in licensing fees as part of the deal, which is expected to bring somewhere around $800 billion in investment to the country.
Despite the roiled economic waters, steel industry experts anticipate that the length of time it takes for a steel plant to come online could help companies like Al-Kharafi miss the worst of the storm.
"There is a very long lead time with these plants,” said Patrick Gaffney, vice president for equity research at investment bank EFG-Hermes. “The earliest they could start production would be by late 2011, but I wouldn't be surprised if they didn't start production until 2013 for this second plant.”
Also boosting hopes that the Al-Kharafi project may be successful is that the company plans to produce billets rather than finished steel.
"They're doing billets, which is an input into the steel making process,” explained Gaffney.
Even if the demand for finished steel decreases, production of it is likely to exceed demand. Al-Kharafi will have the opportunity to sell billets for use in all finished steel products.
"As long as there is demand for steel products, then there will be demand for billets,” added Gaffney.
Steel prices have fallen precipitously in the last few months. "Prices have fallen since August of last year,” said Gaffney.
Even with prices low in Egypt, they’re even lower on the international market.
"If you look at where [steel on the international market] is trading, it's below Egyptian prices,” said Gaffney. “But if you include taxes and shipping, Egyptian prices are not too much higher."
Daily News Egypt reported earlier this week that with cheap prices internationally, steel traders are planning to import up to 100,000 tons in the coming months from the Ukraine, Turkey and Greece at a price range of between LE 3,500 and LE 3,700 per ton
The Managing Director of Ezz El Dekheila told Al-Alam Al-Youm earlier this week that he sees stability in steel prices in the Egyptian market and that current demand on steel has increased from the same period last year. This, he says, is an indicator that the Egyptian construction industry has not yet been affected by the global economic slowdown given increasing demand on building units, especially among low- and medium-cost housing.
Prices on the London exchange fell dramatically over the second half of the year, down 70 percent between June and December of last year.
Al-Kharafi’s investment was a bold one given the economic climate and the slumping steel prices. But since it will take several years for the new plants to come online, the markets may have plenty of time to recover
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