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Tuesday, 24 April 2018

First companies under state IPO program to list on EGX as early as September or October?

IPO WATCH- First companies under state IPO program to list on EGX as early as September or October? Here we go again. Apparently, the government expects the first batch of companies under its IPO program to list shares on the EGX by the end of the first quarter or beginning of the second quarter of FY2018-19, Finance Minister Amr El Garhy tells Youm7. The committee overseeing the program is still deciding which 4-6 companies (from a list of 23) it intends to offer on the EGX in 2018, according to El Garhy, who adds that companies that are more “ready” than others will receive priority.

Caveat lector: Two things here, folks. Or perhaps three. First, the local press continues to confuse “IPOs” with “stake sales” — the first batch of companies to offer shares could do so as early as fall, as the minister suggests, but we think they’re more likely to be stake sales by already-listed companies via accelerated book builds. Indeed, EGX boss Mohamed Farid had also said that he expects only two IPOs under the program this year and only a few listed state-owned companies offering additional shares on the EGX before the year was up. Second, the local press has done an abysmal job of covering the timeline here, butchering the words of various government officials and generally failing to come up with a coherent narrative. So we’re taking a “we’ll believe it when we see it” approach to coverage of the expected timeline on this story. Third, can we just call this a privatization program? Yeah, we know, “IPO” takes the sting out of it all for our (still-Socialist-at-heart) fellow citizens, but really: This is partial-privatization by another name, and calling it an IPO program is something of a misnomer.

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