Gov’t is ready to pull the trigger on listings of shares in four firms: The Madbouly government is ready to offer shares in four state-owned firms on the EGX and has eight more listings in the pipeline as it looks to reboot its privatization program, a media report suggests writes, citing the bourse’s annual report. EGX head Ramy El Dokany held a presser yesterday to mark the release of the 2022 report, which is not yet available on the bourse website.

The companies ready to be listed reportedly include Banque du Caire, Misr Life Ins, Egyptian Drilling Company, and Egyptian Linear Alkylbenzene Company (ELAB), according to the report, which doesn’t disclose an expected timeline for the offerings. Egyptian Drilling Co. and ELAB have been in the lineup for the state IPO program since 2018, while Banque du Caire is a perennial IPO prospect.

Eight other state-owned companies will also offer shares on the EGX as part of the privatization program, the report reads. They apparently include:

• Oil Ministry-affiliated contractor Enppi, which has been on the privatization block since 2017, when CI Capital was tapped to quarterback its sale;
• Two refineries: Midor and Assiut Oil Refining Company, both of which have been discussed as potential sale prospects in recent years;
• Petrochem firms eMethanex, Ethydco and WAPHCO;
• Misr Life Ins. parent company Misr Ins (Misr Life itself has long been talked about as an IPO prospect)
• and Alexbank.

Wait — Alexbank and eMethanex? Aren’t they already private-sector companies? Alexbank is 80% owned by Italy’s Intesa Sanpaolo Bank, but the state holds a 20% share and appoints two board members. eMethanex, which the media report refers to as simply “Methanex” is a joint venture between Canadian methanol giant Methanex Corp, which holds a 50% stake and Egyptian state institutions that hold 33%. Saudi-based APICORP owns the remaining 17%.

REFRESHER- Gov’t is hoping this will be the year its privatization strategy springs into action. The state is looking to reduce its involvement in certain sectors of the economy as part of its newly finalized state ownership policy, which aims to more than double the private sector’s role in the economy to 65% and attract USD 40 bn in private investment by 2026. Public share offerings and stake sales to strategic investors will be a key part of seeing that policy through. The government had envisaged selling shares in as many as 10 state-owned companies on the bourse in 2022, either via IPOs or secondary stake sales — but market turmoil amid the fallout from Russia’s invasion of Ukraine saw those plans pushed back.

Other companies could take the plunge: The bourse is in talks with firms in the tourism, tech, and renewable energy sectors over potential listings in 2023, El Dokany reportedly said at the presser.

If the last few months are any indication, conditions on the EGX look promising: El Dokany used the presser to highlight the bourse’s stellar turnaround in the final months of 2022. The EGX outperformed all of its Middle-East peers in 2022 thanks to a bull run in 4Q sparked by October’s currency devaluation and the loan agreement with the IMF. The EGX30 ended 2022 up 22%, a major reversal in fortunes for Egypt’s benchmark index, which by the middle of the year had been deep in bear territory.

Some of the key stats in the EGX 2022 report highlighted by Dokany:

• Turnover on the EGX rose 7.6% y-o-y in 2022 to EGP 1.08 tn;
• Some 175k new investors began trading on the EGX, triple the number of new investors in 2021. Some 43k new investors began trading in October and November alone. The total number of investors now stands at 526k;
• Retail investors accounted for some 53% of overall trading, down from 68% in 2021, Youm7 cites the report as saying;
• Cash-dividend distributions to shareholders by listed companies more than doubled y-o-y in 2022 to reaach EGP 36.3 bn.

EGX ROADSHOW UPDATE-

Bourse officials met with 16 separate investors and investment funds and four “international institutions” as part of its foreign roadshow in recent months, the report is cited as saying. Chief among the obstacles to entering the EGX raised by the investors they spoke to were fluctuations in EGP exchange rates and a lack of fresh offerings. The roadshow, which is being managed with the help of Al Ahly Pharos, was set to visit Dubai and the UAE first when it kicked off in October, with EGX boss Rami El Dokany expected to meet with as many as 100 regional and international financial institutions, a bourse source told us at the time.

WATCH THIS SPACE- The roadshow will visit Saudi Arabia in February, followed by a return to the UAE, Al Dokany is quoted as saying.