Some perspectives consider that the outcome of the implementation of the first phase of the IPO programme is not the proper measure that can be counted on to evaluate this move.
As for Ehab Saeed, a financial analyst and stock market expert, he told Daily News Egypt that the real beginning of the IPO programme has not yet been embarked on. The five companies that have been prepared to be offered on the EGX are already indexed, and what is happening is offering new stakes– nothing more.
“A matter of record that in order to attract new subscribers and investors you have to offer new companies, new names, which is what really works up the appetite to subscribe and buy its shares. All who make use of this first phase of offers are the actual stakeholders who already won shares, not the new ones,” Saeed clarified.
Yet, on the other hand, according to Saeed, the implementation of the IPO’s first phase is a positive message for all investors and businesspersons indicating that the state is serious, and it is working on gradually offering other companies according to an integrated programme. Thus, the government should accelerate the progress of this programme until it reaches the offering of new companies on the EGX.
Furthermore, Saeed added that Egypt did not list any new companies in the EGX since 14 years ago, that is why this IPO is considered as an important action now, as it will attract more subscribers and investors and position Egypt on the international markets map.
When Saeed was asked when will the IPO pay off, he revealed that it will happen once we enter the phase of offering stakes of national and major banks on the EGX, adding that Egypt until now has a modest share for the banks sector indicator. Only then will the government achieve the IPO’s objectives.
“The Commercial International Bank (CIB) owns the lion’s share in this regard by 93% of the banks sector indicator in the EGX, with only 7% for other banks, and actually the three national major banks are not represented. This situation is unworthy of a major state like Egypt, as all developed countries which have a strong stock exchange list their national major banks,” Saeed stated.