Medinet Nasr for Housing and Development said on Monday its board had agreed to convert a third of the Egyptian property developer's shares into Global Depositary Receipts (GDRs). GDRs, which are issued by depository banks that buy shares in foreign firms, make it easier for investors in developed markets to invest in emerging market companies. GDR prices are based on the underlying shares but are traded independently. Medinet Nasr announced the move in a statement on Monday published by the stock exchange but did not give a reason. It also announced first-half net profit of EGP 147.2 million ($16.8 million) versus 105.1 million a year earlier. Monday's announcement came after Egypt's stock exchange changed its rules on GDRs on Aug. 4 to encourage companies to increase their free float, or the portion of their publicly traded shares, at home before looking to raise money abroad. Under the new rules, if the percentage of GDRs exceeds a company's free float, no new GDRs can be issued until the percentage returns to the level set by the new rule, which came into force on Aug. 10. Medinet Nasr has a free float of about 46 percent. The exchange in Cairo has been looking to boost activity as the government struggles to revive overseas and domestic investor confidence following five years of political and economic turmoil since the Arab Spring uprising. There are about 270 companies listed on the Egyptian exchange, of which 14 have GDRs, mainly traded in London. The official exchange rate for $1 = EGP 8.78
