Egypt aims to raise EGP 8-10bn ($450m-$560m) from floating shares in state-owned companies in fiscal year (FY) 2018/2019, Deputy Finance Minister Ahmed Kouchouk told reporters on Thursday.
The government is launching an IPO programme that will offer minority stakes in dozens of state-owned companies over the next three to five years, in areas such as petroleum, services, chemicals, shipping, maritime, and real estate to help boost state finances.
Egypt last week announced the names of the first five state companies that will offer shares this year.
The companies are Alexandria Mineral Oils Company, Eastern Tobacco, Alexandria Container, and Cargo Handling, Abu Qir Fertilisers, and Heliopolis Housing, a cabinet statement read.
The state owns swathes of Egypt’s economy, including three of its largest banks and much of its oil industry and real estate sector.
Egypt in 2016 kicked off an ambitious three-year $12bn IMF loan programme tied to tough economic reforms that have included deep subsidy cuts and tax hikes.
The buzz around initial public offerings in Egypt is growing louder, with more companies announcing plans for share sales.
They join a growing line-up in what could prove the busiest year for new listings in Cairo since the 2011 uprising that ousted former President Hosni Mubarak.
Growing confidence in economic policies introduced since the currency flotation has boosted the Egyptian stock market and is prompting companies to consider share sales.
Property developers Rooya Group and Landmark Sabbour have announced IPO plans, while Carbon Holdings has hired investment bank EFG-Hermes to manage its market debut, Al-Borsa reported on 13 March.
The government is joining the rush to market and is looking to sell stakes in some public-sector companies, with an initial focus on the banking and oil industries. Banque Du Caire and Enppi are among anticipated listings of state-owned entities.
While the potential to increase participation by Egyptians in stock-market investment is large, some of the biggest companies may wait with IPO plans until the central bank fulfils economists’ forecasts of interest-rate cuts, said Allen Sandeep, head of research at Naeem Brokerage, in a recent research note.