The stock exchange witnessed the offering of 81% of the subscribed shares of Emaar Misr for Development on the OPR screens until the end of Monday session.
487,31m shares were sold out of the 600m shares issued by the company by increasing its capital in both the private and public sectors.
Thus, the shares were oversold by approximately 5.41 times, and the administration of the stock exchange decided that the execution will take place during the Tuesday, session.
Emaar Misr for Development announced the founding of a fund to support the share price in the stock market, and it is financed by the allocation of 15% of the value of shares offered to increase the company’s capital in the stock exchange.
The fund interfered and bought the shares after a great decline in the price of the Emaar shares, after a 13.4% offering during the first three days of circulation.
Emaar Misr’s shares declined by 2.05% at the end of the Monday session, closing at EGP 3.35 against EGP 3.80 at the time of offering.
Sources at EFG Hermes previously ruled out the possibility that the fund would intervene, expecting the share price to rise again strongly based on the stability of security conditions and the rise of the stock market indicators.
The session at the stock exchange, Monday, was the deadline for investors wishing to sell their shares to the fund for supporting shares at the same value of offering, which is EGP 3.8 per share.
“Demand on the sale of the shares to the fund exceeded all expectations. Even earlier experiences have not witnessed such demand,” said Mohamed Maher, Vice Chairman and CEO of Prime Holding.
According to Maher, there are many reasons for such high demand, on top of which was the huge drop in share price directly after the offering.
“Brokerage companies expanded credit loans to investors, to finance the shares’ subscription, and then they demand that clients sell the shares to repay their credit. This is behind the demand on selling the shares,” said Maher. He also emphasised that some investors are still keeping the purchased shares through credit.
“There are other investors who benefited greatly,” said Maher. They are investors who purchased the shares after the subscription, benefiting from the price decline, then offered their shares to the fund to achieve a profit margin between purchase and sale prices.
