By: Heba El-Kordy
Cairo – Mubasher: The Egyptian Exchange (EGX) is likely to continue hitting new significant levels in 2018 amid the anticipated initial public offering (IPOs).
IPOs on the EGX are forecast to reach $984 million through 11 offerings, including the listing of two state-run firms, analysts told Mubasher.
Rising 65% year-on-year, the EGX has witnessed six initial public offerings (IPOs) at a total value of EGP 4 billion in 2017.
IPOs of state-owned firms
The EGX is expected to see major IPOs worth $984 million in 2018, said technical analyst at MubasherTrade Research Ahmed Abd El Nabi.
These offerings are projected to stand at 11 IPOs, including Banque du Caire and Engineering for the Petroleum and Process Industries (ENPPI), Abd El Nabi highlighted.
Both Misr Italia Properties and Roaya Group will float around $85 million and $111 million of their shares on the EGX in 2018, he added, pointing out that the IPO vision will be clearer after the government announces the offering scheme this month.
Al-Ahram newspaper is likely to sell a stake of its shares in an IPO on the EGX, he indicated.
Interest rates
Interest rates are likely to decrease by 3%, and firms with foreign-currency debts will be benefited from this decrease, as well as their stocks’ performance on the EGX will revive, the technical analyst projected.
The healthcare sector will witness a robust performance this year, especially after the new health insurance law came into effect, he continued.
Continuous hike
Moreover, analyst Michael Mamdouh Naguib said that most stocks are still traded under its nominal value, despite currency differential at the time of offering these stocks.
The EGX still has stocks with attractive prices, Naguib added, anticipating 2018 to witness higher prices, particularly in retail stocks.
Liquidity is expected to get back to the EGX in light of the new government IPOs, which will boost trading volumes, he continues.
The Central Bank of Egypt’s (CBE) recent decision of keeping interest rates unchanged is a sign of cutting rates over the coming period, which will direct liquidity to the EGX, instead of the banks, the analyst noted.
Translated by: Mai Ezz El-Din
