Dealers in the Egyptian Exchange (EGX) expect that the government’s announcement to publicly offer the Armed Forces’ Safi and Wataniya on the EGX will have a positive impact on the market in the coming period.
They added that this is contingent on the availability of attractive pricing and that it marks the beginning of a wave of other offerings that support the depth market and attract private companies to offer their shares.
Foreign investors’ transactions tended to sell on the EGX during last week’s transactions at a value of EGP 810m, comprising 18.7% of all trades.
Mohamed Maher — President of the Egyptian Securities Association (ECMA) — stated that the market accommodates proposals with attractive pricing, stressing its importance for local and foreign investments, especially since it can be a test of investors’ appetites.
He also stressed that they guarantee the investor’s presence in the market during the following propositions on an ongoing basis.
Yesterday, the Cabinet approved the qualification of the National Company for the Sale and Distribution of Petroleum Products (Wataniya) and the National Company for Production Projects (Safi) in preparation for being listing on the stock exchange.
The EGX’s indices rose collectively during last week’s trading amid purchases by Egyptian investors.
The main EGX30 index rose by 6% to reach 9,289 points, while the EGX70EWI index of small and medium shares rose 6.1% to 1,798 points, and the broader EGX100EWI index increased by 6.3% to 2,642 points.
The market capitalisation of listed companies’ shares gained about EGP 25bn during the week’s trading, rising by 4.2% to EGP 622.7bn.
Radwa Al-Swaify — Head of Research at Al-Ahly Pharos Securities Brokerage — said that the market is in dire need of these types of large-sized offerings on an ongoing basis to attract foreign capital, however, proposals with strong and influential success stories are necessary to revive the EGX.
After regarding the market’s readiness to receive the proposals, Al-Swaify believes that strong offerings are an influential factor in reviving the market, and it is necessary to increase them to revive it, rather than waiting for the market to improve to complete the offering.
She explained that ensuring the success of the offerings is represented in several factors, including a high free-trading ratio, drawing the company’s story in an attractive way for investment, as well as the availability of transparency in terms of results and growth plans.