Egypt's central bank extends operating hours at selected bank branches    Egypt implements 'alternative solutions' to Cairo Airport tech disruption – Cabinet    NDB expands to 11 members, raises $16.1bn in 2024, says Rousseff    Egypt, Somalia leaders discuss strategic partnership, counterterrorism in New Alamein    Egypt, UNDP discuss expanded cooperation on medical waste management, human development    CIB finances Giza Pyramids Sound and Light Show redevelopment with EGP 963m loan    EGX closes mixed on July 7th    Egypt calls for stronger central bank cooperation, local currency use at BRICS summit    Egypt's PM, Uruguay's president discuss Gaza, trade at BRICS summit    Egypt's Talaat Moustafa Group H1 sales jump 59% to EGP 211bn    Egypt, Uruguay eager to expand trade across key sectors    Egypt accelerates coastal protection projects amid rising climate threats    Deadly Israeli airstrikes pound Gaza as Doha talks raise hopes for ceasefire    Egypt, Norway hold informal talks ahead of global plastic treaty negotiations    Greco-Roman tombs with hieroglyphic inscriptions discovered in Aswan    Global tour for Korean 'K-Comics' launches in Cairo with 'Hellbound' exhibition    Egypt teams up with private sector to boost university rankings    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Egypt condemns deadly terrorist attack in Niger        Egypt's EHA, Schneider Electric sign MoU on sustainable infrastructure    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's EDA joins high-level Africa-Europe medicines regulatory talks    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    Egypt's Democratic Generation Party Evaluates 84 Candidates Ahead of Parliamentary Vote    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Cabinet approves establishment of national medical tourism council to boost healthcare sector    Egypt's PM follows up on Julius Nyerere dam project in Tanzania    Egypt's FM inspects Julius Nyerere Dam project in Tanzania    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Weighing up on IPOs
Published in Al-Ahram Weekly on 17 - 01 - 2019

Official statements are indicating that the government's initial public offerings (IPOs) programme to privatise some state-owned companies may be inching towards take-off. Head of Egypt's stock market Mohamed Farid also anticipated earlier this month that the IPOs of public-sector companies would kick off in the first quarter of 2019.
The government decided in October to postpone selling off shares in some 23 companies slated for privatisation on the back of the volatility in global stock markets since the outbreak of the emerging markets crisis.
A government source in the committee supervising the offerings programme was quoted last week as saying that the IPOs were expected to be launched in early March. The committee has been regularly meeting to select an ideal time to announce the launch of the IPOs in cooperation with the investment banks participating in the programme, the source added.
The investment banks that will handle some of the IPOs include a consortium made up of EFG-Hermes and Citibank, which were awarded the responsibility of selling an additional stake in Alexandria Container and Cargo Handling. Another consortium formed of CI Capital and Renaissance Capital will manage the sale of an additional stake in Abu Qir Fertilisers.
However, “the programme may be postponed again,” said Ibrahim Al-Nemr, head of technical analysis at Naeem Brokerage.
The government has stated that the offer price of the shares will be based on their average price a month before the offering is made, plus or minus 10 per cent. Therefore, the targeted revenue announced by the government will currently be difficult to achieve, he explained.
He added that the government had targeted collecting LE2 billion from the sale of 4.5 per cent of Eastern Tobacco, which meant that the offer price would be set at LE20, more than the currently trading price of shares at approximately LE16. The figures indicate that it could be difficult to reach the target price in March.
Launching the IPOs programme in March depends on whether the sales could achieve the targeted sum or not, Al-Nemr stated.
The IPOs programme aims to expand the ownership base and increase the market capitalisation of the Egyptian Stock Exchange, in addition to raising the value and amount of daily trading.
The Ministry of Finance announced in March last year that 23 public-sector companies would be offered through IPOs on the stock market, to a total value of LE80 billion, in the first phase of the government's IPOs programme.
Hisham Tawfik, minister of public enterprise, said that the committee supervising the offerings had begun reviewing the list of 23 companies slated to be offered through IPOs to weigh up the possibility of adding other companies.
The committee released a statement in October 2018 announcing it had decided to shelve its share offerings because the trading price of Eastern Tobacco shares had fallen below the margin stated in Cabinet Decree 926/2018 governing the programme to divest publicly owned shares.
However, inflation rates should drop in the coming months, resulting in a decrease in interest rates and encouraging the investment banks to increase their investments in the stock market, said Radwa Al-Sweifi, head of research at Pharos Holding, a consultancy.
A Ministry of Public Enterprise statement explained that the delay in offering shares in Eastern Tobacco had been the result of fluctuations sweeping the financial markets, which had coincided with factors including an increase in protectionist policies worldwide, the trade war between the US and China, and the difficulties of emerging markets in the light of increased interest rates on US and European treasury bonds.
Al-Sweifi believes the share prices of the Alexandria Mineral Oils Company (AMOC) and Eastern Tobacco have not yet reached the target range, unlike shares in the Alexandria Container and Cargo Handling Company, which have reached the target price.
The government is planning to offer shares in five public-sector companies — AMOC, Eastern Companies, Alexandria Container and Cargo Handling, Abu Qir Fertilisers and the Heliopolis Company for Housing and Development — on the stock market.
Al-Nemr said that since AMOC's share price was currently trading at LE6.3 and the target price was LE10, reaching the target price by March would be difficult.


Clic here to read the story from its source.