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EGX considers allowing Egyptian investors to obtain sale proceeds of GDR in dollar: chairman We understand investors' demands, coordinating with EFSA to abolish restrictions on international transfers of GDR, says Omran
The Egyptian Stock Exchange (EGX) is studying the possibility of allowing Egyptian investors to obtain sale proceeds of Global Depositary Receipts (GDR) in dollars as well as the double-entry stocks registered in foreign markets, EGX Chairman Mohamed Omran said. The GDR are securities of Egyptian companies registered and traded on the London Stock Exchange. The Egyptian Financial Supervisory Authority (EFSA) prevented the owners of GDR from obtaining the international transfers of their GDR in dollar, obliging them to exchange for the pound since March 2015. Investors demanded freedom of conversion and to obtain sale proceeds of GDRs traded on the London Stock Exchange in foreign currency, rather than obliging them to transfer those profits to their Egyptian bank accounts in pounds. These demands came after the Central Bank of Egypt (CBE) eased restrictions on dollar cash deposits and withdrawals at banks for individuals and companies that import basic goods. Omran said that EGX understands the investors' desire to obtain the sale proceeds in foreign currency, as was the case previously, so as to keep foreign liquidity and take advantage of any movement in the exchange rate. EGX will discuss with EFSA all possible ways to ease the measure imposed on the GDR, he said. He stressed that the goal of all local regulators of the capital market in Egypt such as EFSA is to facilitate trade and enlarge the capital market by attracting new IPOs and more investors to trade in Egypt, while providing transparency in all processes. EFSA chairman Sherif Samy told Daily News Egypt on Sunday that the abolition of these measures is not a priority for the authority during the current phase. He added that the CBE's moves towards removing all restrictions on dollar related transactions does not necessarily mean the abolition of the EFSA's restrictions, as long as they provide investors with freedom of conversion and obtaining sale proceeds in pound. Egypt has about 14 companies which own GDRs, including the Commercial International Bank (CIB), Telecom Egypt, EFG Hermes, Ezz Steel, Global Telecom Holding, and Orascom Telecom Media and Technology Holding (OTMT). They also include Naeem Holding, Lecico Egypt, Suez Cement Company, Pachin for Paints & Chemical Industries, Remco, GB Auto, Edita Food Industries, and Palm Hills Development.
