Saudi Aramco’s IPO has had no direct impact on the EGX, exchange boss Mohamed Farid said at a symposium organized by Youm7 to discuss raising listings on the bourse. Aramco had only an indirect impact by changing companies’ relative weight in global market indices such as the MSCI Emerging Markets Index. The remarks downplayed the impact of Aramco’s on-again, off-again, on-again IPO in a year that saw the EGX attract just two new listings. Public Enterprise Minister Hisham Tawfik directly pointed to Aramco, which pulled significant liquidity from regional markets in the run-up to its listing, as one reason Egypt was postponing some transactions under its privatization program. A program to sell stakes in already-listed companies has been dormant since March, when Eastern Tobacco sold a 4.5% stake on the EGX. Meanwhile, state-owned Banque du Caire and ENPPI, long expected to IPO, each delayed their offerings this year, with BdC now scheduled to kick off a roadshow in early 2020.

Background: Farid’s comments come as Egyptian equities are struggling to attract interest, as reflected in low trading volumes and a dearth of IPOs, analysts told Reuters’ Arabic service earlier this month.

Why are volumes so low? Shares worth just EGP 268 mn changed hands on the bourse yesterday, 61% below the trailing 90-day average and well off the EGP 1 bn or so that was considered an “acceptable’ figure last year. Meanwhile, the EGX30 is up just 6% for the year. Farid says it has a lot to do with the relatively few names on offer on the EGX, pointing out, too, that the exchange has seen a number of delistings this year as a result of both acquisitions and listing regulations.

The EGX is headhunting new listings: According to Farid, the EGX is actively looking to bring new listings to the bourse by directly contacting 235 companies to look into potentially listing on the EGX. Out of those, 14 companies have begun to study the feasibility of listing on the EGX. However, 67 companies said that they would consider listing but that now isn’t the right time to pull the trigger. Another 81 outright said they were not interested, while the rest were on the fence about listing.

IPO WATCH- Three sports clubs looking to debut on the bourse? The EGX is currently working with three clubs, Misr El Makasa, FC Masr, and Wadi Degla SC, to prepare for potential listings. The EGX is trying to attract sporting clubs to IPO in light of the Sports Act being amended to allow clubs to be put on the stock exchange.

Farid is encouraged by plans to bring military-owned companies to the EGX: President Abdel Fattah El Sisi has twice mentioned the possibility of listing military-owned companies on the bourse, most recently saying last week that the move would ensure the participation of all sectors in the economy. Farid lauded the prospect of having military companies on the EGX, which he said would send a strong message on their willingness to be fully transparent and adhere to global corporate governance laws. The EGX boss was otherwise mum on the plans, but hinted that things are moving along.