Following the Egyptian Exchange’s (EGX) announcement that the first Summit for the Initial Public Offerings (IPOs) will take place 6 May, Daily News Egypt reached out to experts to define and has analysed Egyptian companies’ listing in the stock market.
Mohsen Adel, a member of the board of directors of the Egyptian stock market, said IPOs allow companies to have an opportunity to trade in the Egyptian stock market and increase their ownership bases. In other words, he said, an IPO allows a company to increase its number of shareholders.
Listing in the stock market can give companies access to financing, provide critical evaluation for mergers and acquisitions, and act as an exit strategy if a company’s main shareholder plans to sell a whole company, the EGX said.
The summit aims to gather “all the decision makers in the world of business and finance locally and regionally to enhance the growth opportunities for companies by raising capital through IPOs”, the EGX said.
In 2005, only three companies had IPOs that amounted to EGP 7.6bn. That number surged to 22 companies in 2006; however, the offerings amounted to EGP 3.7bn. In 2007, 20 companies were listed, totaling EGP 21.4bn, while in 2008, the amount of offerings for 24 companies was EGP 6.4bn.
Between 2009 and 2011, 30 companies were listed on the stock market with a total value of EGP 5.7bn, with 2011 contributing eight companies and EGP 0.5bn to those figures.
Listings surged in 2012 to total 11 companies and value EGP 2.5bn only to drop in 2013 with nine companies entering the stock market with a total value of EGP 0.2bn.
The Arabian Cement Company was the latest company to announce that it will begin trading in the Egyptian stock market on 21 May, according to Reuters. The company has set an indicative price range that will vary between EGP 8.45 and EGP 9.55.
For more on the IPOs conference coverage, please check:
First IPOs summit sheds light on companies’ listings in stock market
Consultations underway with public companies to increase capital, boost trading: EGX chairman
Petroleum ministry prepares bourse listing of new petrochemicals companies
Current conditions unfavourable to head the stock exchange: Tourism companies
State owned companies’ IPOs: Disguised privatisation or economic solution?