Back to the complete issue
Monday, 2 March 2020

Egypt’s FRA suspends 3-day notice requirement for treasury stock purchases

REGULATION WATCH- Market regulator suspends three-day notice requirement for listed companies’ treasury stock purchases: The Financial Regulatory Authority (FRA) introduced a new temporary rule that will allow EGX-listed companies looking to purchase treasury stocks to notify the bourse on the same day they plan to buy the stocks, instead of three days in advance, according to an official statement. The new rule bars majority shareholders from engaging in the sale. The FRA said that the decision is meant to boost trading and hedge against turbulence in the equity markets (see above). The market regulator did not specify how long this measure will be in place.

What exactly are treasury stocks? These are shares that a company had sold on the open market and then bought back from stockholders. Companies usually buy back these shares to reduce their exposure on the open market, which also reduces the chances of a hostile takeover. Holders of treasury stocks do not have voting rights.

Egypt Kuwait Holding was the first to jump on the wagon, announcing in an EGX filing (pdf) yesterday that it will buy USD 20 mn of treasury stocks yesterday.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.