• Egypt is expanding its IPO program by offering shares in 10 more companies that are owned by the Armed Forces
  • The expansion of the IPO program is being supported by the Sovereign Fund of Egypt
  • The stock market has been declining owing to contractionary policy stands

Harare-Egypt's stock exchange has been in a constant decline over the past year with -3.5% year to date return. This decline could be attributed to a variety of factors, such as shifts in consumer behaviour or changes in market conditions. Despite this markets’ downturn, the government has been pulling contractionary policies jeopardizing the stock market with rapid currency depericiating and sparing inflation.

Recently, Egypt's government has been planning to expand its initial public offering (IPO) program by offering shares in ten more companies owned by the Armed Forces on the stock exchange, despite the recent downturn in the Communication Services sector.

 The program has already offered shares in army-owned companies Wataniya Petroleum Company and the National Company for Producing and Bottling Water (Safi). The Prime Minister of Egypt, Mostafa Madbouli, announced the plans in a press conference, emphasizing that the state remains committed to carrying out the IPO program. Investors have already shown interest in purchasing shares of Safi and Wataniya as part of this program.

The Sovereign Fund of Egypt (TSFE) initiated the process of offering shares in 32 state-owned companies as part of the IPO program earlier this March, aimed at attracting both individual and strategic investors. This program is a critical component of the State Ownership Policy Document, which was approved by President Abdel Fattah El-Sisi in December 2020, aimed at strengthening the private sector. The IPO program is a part of the government's plan to enhance the private sector and to decrease the state's control over the economy, as state-owned companies account for nearly 30% of the country's gross domestic product (GDP). By increasing access to IPOs, the government hopes to bring in more investors and stimulate economic growth.

 While it remains to be seen exactly how the introduction of shares from 10 additional companies owned by the Armed Forces will impact the market, it is clear that the government remains committed to carrying out its IPO program, and investors are already showing interest in purchasing shares

Equity Axis News