By: Heba El Kordi
Cairo – Mubasher: As the New Year approaches, analysts denote the success seen on the Egyptian Exchange (EGX) during 2017, particularly over the last four months of the year.
The EGX reflects the Egyptian economy, which has been growing steadily since the flotation of the Egyptian pound and the beginning of the economic reform programme, analysts told Mubasher, noting that increase in companies’ capitals over the year has been a major indicator of this success.
Over 2017, over 46 companies hiked their respective capital, registering a combined EGP 9.7 billion, through the issuance of more than 3 billion shares, which has attracted investors.
Compared to 2016, capital hikes were 86% higher in 2017, while the last four months of the year alone saw EGP 4.2 billion in capital increases, the analysts added.
Flotation
Since the flotation of the local currency, the EGX has succeeded in building a strong base that allows it to diversify its tools and activities, something it has lacked in previous years, commented head of technical analysis at Acumen Hesham Hassan.
This improvement was clear in the increased number of initial public offerings (IPOs) and mergers and acquisitions, the analyst noted, indicating that the tools added to the bourse confirm the return of investor confidence to the Egyptian market and economy.
Following the recent economic decisions, the EGX has resumed its position as a mirror that reflects the economy, the head of technical analysis at Acumen stressed, indicating the near EGP 10 billion capital hikes carried out on the bourse this year.
Such a value in terms of capital increases has not been seen on the EGX for several years, he added in a statement.
Hassan forecast a “leap” in capital hikes in 2018, citing a continuation of the positive performance on the back of the economic reform programme.
Among the companies which have submitted requests to the Financial Regulatory Authority (FRA) was Orange, which requested bolstering its capital to EGP 16.4 billion from EGP 1 billion by inviting older shareholders to subscribe to the capital top-up.
EGX boosters
The decisions taken, the rules set, and new mechanisms and options added to the EGX have helped companies increase their capital and adjust their financial position, in addition to raising the number of IPOs this year, said economic and market analyst Safaa Fares.
The volume of capital hikes and IPOs surged in 2017 to records not seen since 2008, bringing market capitalisation to EGP 824.9 billion.
Translated by: Nada Adel Sobhi
