Egypt aims to list four to six state-owned companies in initial public offerings (IPOs) in the period between June 2018 and early 2019, said Prime Minister Sherif Ismail on Monday during the fourth meeting of the ministerial committee overseeing the governmental IPO programme.
With the state offering companies in the sectors of petroleum, industry, and petrochemicals, the government aims to raise a cumulative of EGP 15-18bn from the listings.
Ismail said that the programme will attract equity financing for the companies, stimulate the Egyptian Exchange, and will also help expand the Egyptian stock market’s capitalisation.
Head of macroeconomic analysis at EFG Hermes, Mohamed Abu Basha, told Daily News Egypt that the government IPO programme would carry a positive effect for Egypt’s capital market, as it will increase liquidity and allow the government to allocate such liquidity to other companies.
He added that it will also have an indirect benefit in stimulating investments and in attracting foreign direct investment inflows.
The meeting was attended by the ministers of petroleum, trade, industry, finance, planning, and public sector affairs to discuss the programme and ensure an independent and fair financial assessment.
Furthermore, the programme will expand the companies’ base of ownership and provide the necessary funding for them to expand their activity and achieve greater corporate governance, as well as attract more investment flows and maximise returns on assets.
In March, the government announced a list of 10 companies that will have additional shares listed, with 15-20% of each of the companies to be listed over the next 24 to 30 months. The cumulative value of the listings is expected to rise to EGP 80bn, raising the collective market capitalisation to EGP 450bn
In April, IMF Mission Chief for Egypt Subir Lall welcomed the IPO programme and told Daily News Egypt that the decision will help attract equity financing for the companies and will also help expand the Egyptian stock market’s capitalisation.
