Prime Minister Calin Popescu Tariceanu said that the government encouraged the involvement of Romanian companies in the privatisation of the Romanian Savings House (CEC) as the future sell-offs should take into account Romanian capital too and not only foreign strategic investors. According to Tariceanu, CEC has been not very well protected against market fluctuations. In addition, considering the fact that there have not been any tempting offers received, CEC would be turned into a banking institution used for accessing and distributing European funds for agriculture. CEC head Radu Gratian Ghetea announced CEC intends to offer 20% of loans for rural areas by 2020 as, until now, the bank offered just 12% of the rural loans. CEC's privatization was stopped in December 2006 after the only financial offer made by National Bank of Greece (EUR 560mn for 69.9% of CEC shares) was considered under the expectations. The finance and economy ministry last year said CEC would stay as a state property for another year. CEC's assets exceeded RON 10bn at the end of January, up by 37% y/y against the RON 7.1bn posted in 2006.

New car sales reported a hike of 26.3% y/y in February due to better-than-expected sales of domestic brand Dacia, according to data released by the Association of Car Producers and Importers (APIA). Car sales reached 27,817 units, by 4,448 more against January. Out of the total figure, commercial vehicle sales went up to 3,341 units. Meanwhile, imported car sales increased by 21.9% y/y to 12,210 units. Another reason was the fact that the market continues to grow despite pessimist forecasts. Dacia sold 7,725 units, ranking at the first position. Dacia holds almost a quarter of the market (28%), followed by Skoda with 8% of the market, and Volkswagen (7.3%). The new car and commercial vehicle sales grew by 33.3% y/y in January and February up to 51,000 units.

Meanwhile, car exports advanced by 54% y/y in February. Thus, car sales grew by 28% y/y to over 42,300 units in the same period and commercial vehicle sales increased by 62% y/y, exceeding 8,150 units. Bus sales also grew by 103% reaching 650 units sold. Romania's domestic production also grew by 51% to 48,000 cars in the first two months of the year, while exports increased by 54% and import sales increased by 38% to a little over 39,500 units. Nevertheless, forecast over the evolution of the market remains pessimist, says APIA's vice-president Brent Valmar. According to him, the local car market is likely to witness a 5% increase at the most this year, remain the same or even drop.

Qatar Islamic Bank, the fifth-largest GCC Sharia-compliant lender by market value, is currently performing feasibility studies on three Egyptian banks, ahead of acquiring one of them and restructuring it into an Islamic bank, local media reported on Wednesday. Egypt is not awarding any new banking licenses, part of its medium term plan to trim the banking sector down to a maximum of 30 banks from current 57 operating banks. Therefore regional and foreign banks seeking to expand into the Arab world’s most populous country usually acquire a majority stake or 100% of an already established entity. According to media reports QIB will launch Islamic banking operation in Egypt within the next six to twelve months.

The growing demand from Muslims for investments that comply with the Sharia has spurred several global banking institutions to tap this lucrative market and the Egyptian market offers bright potential for such industry. Moreover, the current credit crunch has in someway benefited the Islamic banking industry which is currently seen as a safe haven with solid and virtually risk-free fundamentals, mainly when it comes to raising funds and issuing bonds. Sukuk are Islamic bonds - generally backed by physical assets - that pay holders rent or a share of profit, though they are priced like conventional bonds.

Retail investors have stepped up equity sales n the local stock exchange, positioning for the forthcoming Safaricom IPO. This is having an adverse impact on prices with the benchmark NSE20 share index dropping steadily during the last week despite generally positive developments on the political front. This has been the common trend in the NSE pre-IPO’s in the past as well. The Safaricom IPO is expected to attract new investors and it promises to be a key test of investor confidence in East Africa’s biggest economy after a damaging post-election crisis. Governance issues in the capital markets have also come to the fore with the placement of Nyaga stockbrokers under statutory management.

The UK-based DLA Piper LLP was selected go seek investors for a coal mine and iron ore projects in southern Tanzania. The company signed a contract with Tanzania’s National Development Corporation (NDC) which is local custodian of the project. The two projects are the development of Mchuchuma coal and Liganga iron ore deposits. The appointment of DLA Piper as transaction advisor for the two anchor projects of the Mtwara Development Corridor (MtDC) was made possible through a USD 600,000 grant. Under the contract, DLA Piper will provide advisory services to the government of Tanzania, through NDC, that will guide the procurement of investors for the two projects which are capable of producing power supply and essential steels bars for construction. Experts estimate that the Mchuchuma coal project can support a power plant with capacity of 400MW.