The CASE reached an all-time high of 2,153.50 points on 9 November, only to drop by more than 100 points as investors started selling other stocks to raise liquidity for the upcoming TE transaction. 'Everyone knew that TE was going to be offered so a lot of people liquidated their investments in anticipation of the IPO,' says Ahmed el-Ashram, financial analyst at the local HC Brokerage. 'People were not ready to take any new positions until then.'

Subscription for a total of 341 million shares, offered in two equal tranches and making up 20 per cent of TE's share capital, opened on 29 November for a period of two weeks. The first tranche, covering 170 million shares, is being offered to the public. Investors will have to subscribe to a minimum of 100 shares but not more than 10,000 shares, with shares priced at £E 14.80 ($2.90) each.

A second tranche is being offered locally and through global depositary receipts (GDRs) to be listed at the London Stock Exchange (LSE) through a private placement. Minimum subscription is 1 million shares and the maximum is 17 million shares, at a minimum offering price of £E 13.30 ($2.30). Shares and GDRs are scheduled to start trading on the CASE and the LSE on 14 December, TE said in an announcement on 28 November.

The IPO, the last of several offerings in 2005, is expected to provide a renewed boost to Egypt's bourse, which has put in a strong overall performance since the beginning of the year. The CMA index has risen by 64 per cent since January, while the broad-based Hermes Financial Index (HFI) is up by an impressive 117 per cent. Monthly trading volumes have been high, at levels above £E 12,000 million ($2,100 million) in the past five months, and market capitalisation now stands at £E 323,766 million ($56,307 million).

The market's overall positive trend is expected to continue well into 2006, driven by general economic recovery - particularly in the private sector - increased bank lending, expectations of continuing government reform initiatives, strong company performances and comparatively cheap valuations. Ongoing high oil prices, which have led to an influx of money from the Gulf, will support the trend.

Developments in the political arena, notably ongoing parliamentary elections, have not had a major impact on market activity. With the third and final round of parliamentary elections scheduled for 1 December, however, it remains to be seen what the market's sentiment will eventually be.

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