BEIRUT: The Egyptian government is moving away from using stock listings for privatization because of stock-price declines in the Middle East, Investment Minister Mahmoud Mohieddin said on Thursday. Egypt will instead move toward seeking principal investors for some of the major companies on the government s privatization agenda, the minister told Dubai-based Al Arabiya television in an interview. Now we are tending towards allocating to the private sector and not through IPO's (initial public offerings) through the stock exchanges, he said. There is a trend towards principal investors and funds and financial institutions at the expense of looking to stock exchanges, until they recover their health, he added. Speaking on the sidelines of the Arab Economic Forum in Beirut, Mohieddin noted that times had changed since the government could expect an IPO to be subscribed many times over, which was the case through most of 2005. One recent IPO of 7 percent of Egypt Aluminum was postponed in March because demand was so low. The benchmark Hermes index for the Egyptian stock exchange peaked in February and has since fallen 22 percent. Steeper declines in Gulf markets have dragged down the Egyptian market because of the large flows of Gulf investment money. In an interview with Reuters, Mohieddin said Egypt raised LE 14.3 billion ($2.5 billion) from privatization in the first nine months of the financial year and could increase that figure in the weeks ahead. This is more than we were expecting ... this is almost three times the LE 5.6 billion we raised last year and could increase in the coming weeks before the end of the financial year depending on a number of transactions, he said. Mohieddin is one of a core group of economic reformist ministers who took office in mid-2004. His ministry has re-launched a privatization drive as part of measures to liberalize the economy. Until the new cabinet was appointed, Egypt s privatization program had slowed almost to a halt. But in roughly 18 months since taking office, the government has raised more than LE 16.5 billion by selling companies or state-owned stakes. The minister said there had been good demand from investors for the state-owned Bank of Alexandria, which has been preparing for privatization. He said Egypt s central bank would issue a statement on the sale next week but declined to elaborate. The Egyptian government had invited expressions of interest from investors interested in buying 75 to 80 percent of Bank of Alexandria, with a deadline of April 28. EFG Eurobank, Greece s third-largest lender by assets, said on Thursday it was eyeing a stake in the Egyptian bank as part of its plans to expand in other countries. Mohieddin told Al Arabiya that the three privatizations of Bank of Alexandria, Delta Sugar and pharmaceutical company CID, all depended on identifying a principal investor. Reuters
