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Tuesday, 12 January 2021

Privatization program coming back to life?

EXCLUSIVE- The state privatization program appears to be on track to shake off its cobwebs as the government committee in charge of it is set to meet later this month, Public Enterprises Minister Hisham Tawfik told Enterprise. The committee could shuffle the planned order of stake sales, Tawfik said, but stressed that all options are on the table and will ultimately be in the committee’s hands to decide.

Is there appetite for the program? Yes, says Tawfik, pointing to turnover on the EGX tripling since the committee’s decision to shelve the program as a key signal that it’s a good time for fresh listings. While the committee has been holding its monthly meetings as normal throughout the pandemic, the improved conditions have created a window to revive the program, the minister said. Tawfik had also said last month that the government is revisiting the program amid an increase in foreign appetite for Egyptian equities.

The only question: How global markets impact sentiment on the EGX.

The program could also see some new entrants, with the Public Enterprises Ministry tapping four new companies — including El Nasr Mining Company — to join the roster, Tawfik told Hapi Journal earlier this week. That doesn’t necessarily mean the companies will be included, but the ministry sees solid potential in offering them up for IPOs or secondary stake sales and will leave it to the committee to decide, Tawfik tells us. The minister declined to disclose any further details.

REFRESHER ON THE PROGRAM: The program, which was first announced in 2018, has been subject to repeated delays, only seeing a single secondary offering when Eastern Tobacco sold a 4.5% stake in March 2019. Alexandria Containers, Abu Qir Fertilizers, and Sidi Kerir Petrochemicals are slated for secondary stake sales. Meanwhile, Banque du Caire and e-payments firm E-Finance are expected to IPO in separately managed processes.

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