Official sources at major investment banks working in the Egyptian market have ruled out any new offerings on the Egyptian Exchange (EGX) in the rest of 2020.
This includes offerings at the level of private sector companies or government tenders. As a result, this will entail only two IPOs have been made over 2020, for the Tenth of Ramadan for Pharmaceutical Industries and Diagnostic Reagents Company (Rameda) and the Emerald Real Estate Investment.
Chairperson of Banque du Caire, Tarek Fayed, excluded an IPO of the bank this year. He attributed this to the repercussions of the novel coronavirus (COVID-19) pandemic, despite the bank’s initial plans to offer shares within the $500m range in mid-April.
“The bank had started the offering process, but it was stopped due to the global conditions,” Fayed told Reuters news agency. “Global markets are unstable and are still troubled by the coronavirus, although the offering will be reconsidered.”
He added, “It is difficult for the offering to take place this year, however, this all depends on the improvement of global conditions.”
In previous statements, Minister of Business Enterprise Sector Hisham Tawfik said that plans to offer shares in government companies were postponed, due to the current market conditions resulting from the coronavirus. The minister has yet to specify a date for the resumption of the IPO programme.
The Egyptian government was planning to sell additional stakes in more than 20 state-owned banks and fertiliser companies, as part of reforms to the public sector. The shares sale was also aimed at reviving the local economy after years of stagnation.
Sources said that a group of private sector companies is expected to take the initiative to restore IPO activity at the beginning of 2021. Some of these companies include Masary and Bee, following their merger under a holding company for electronic payment services. The natural gas distribution company TAQA Arabia has similar plans. EFG Hermes to manage the two offerings.
Moreover, the investment bank CI Capital is preparing to offer Taaleem company, the owner of Nahda University in Beni Suef, early next year. Furthermore, Beltone Financial is managing another undisclosed offering that is expected to be implemented during the first quarter of 2021.