Beltone Holding played major role in companies’ IPOs during 2017

Daily News Egypt
6 Min Read
Sameh Al-Turgoman, chairperson of Beltone Financial Holding

Sameh Al-Turgoman, chairperson of Beltone Financial Holding, said the company has played a major role in persuading companies to offer some of their shares on the stock market in 2017, most recently Ibn Sina Pharma.

It was proven over recent years that whenever the government initiates a reform programme through offering public companies on the stock market, huge investments are injected in the EGX, thus ensuring liquidity for next offerings, he added.

Turgoman stressed that the economic reforms conducted over the past four years were large in scale and difficult, and to realise what will happen later, we need to review the Egyptian stock market’s situation from 2004 to 2011, which recovered in 2013.

He noted that the initial public offering (IPO) of Ibn Sina Pharma has seen a large influx from investors, making it hard to meet such massive amount of requests.

Turgoman believes that economic reform is like a long marathon that should continue.

Tarek Abd El-Bari, vice president of Misr for Central Clearing, Depository, and Registry (MCDR), said that the amendments made to the Investment Law stipulate that all companies established in accordance with the law must be registered at the Central Depository Centre, on the condition that those companies adjust their conditions within a year since their establishment.

He added that the number of listed companies on the Egyptian Exchange is 240 companies, while the companies registered in MCDR reached 1,600, all of which enjoy the Central Depository Centre’s services.

Abd El-Bari considered that the registration of companies at the Central Depository is a very important process in preparing to list them on the stock market later.

He added that the MCDR has added 400 new companies since the amendments made to the law, expecting this number to reach 30,000 companies within months.

Abd El-Bari stressed that the most important advantage of registering with the MCDR is the classification of companies into separate sectors, and identification of the number of winning and losing companies as well as the sectors that have few companies, and as such, information is not available with the General Authority for Investments (GAFI).

Omar Abd El Gawad, managing director of Ibn Sina Pharma, said that all major investors worldwide are interested, and have a desire to invest, in Egypt.

He explained the private listing of the company was covered 13 times and the public offering 17 times. However, many sectors of the Egyptian economy are not represented on the stock exchange, although they havefive or six active stocks, but that does not represent the sector, which is a large sector with strong growth opportunities.

According to Abd El Gawad, closed companies often have concerns about disclosure, which he sees as a vision and philosophy, especially since IPOs on the stock market turn the companies from the local perspective to a broader framework of thinking.

“One of the main advantages of IPOs is to be with the largest investors around the world, which gives new hope to growth plans, and the presence of global investors in the structures of a company adds a lot to its business,” said Abd El Gawad.

He sees that there are many companies with strong financial fundamentals in Egypt and they have the ability to attract international investors. But the question remains why companies do not open their cards to international investors to build new plans.

The director of media relations of the EGX was asked a question about the required foundations to ensure the success of the proposals.

He pointed out several factors for the success of any IPO, the most prominent of which is the management of the company because the investor buys the future and must be convinced that the existing management can carry out what is promised.

He believes that the sector that invests most is the technology sector because it is the future of the world. Therefore, the sector is important, in addition to the good pricing of its offerings, which leaves room for investors to profit.

He added that rules governing the nature of the and the management of IPOs market under a disciplined legal framework helps IPOs succeed to the extent that this environment is successful.

He pointed out that there is a minimum and maximum price for IPOs. The challenge for promoters is finding the right balance to attract investors, in accordance with a value acceptable to the shareholders of the company.

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