Egypt expected to launch IPO program in September

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The head of Egypt’s Financial Regulation Authority (FRA) said on Tuesday he expected the government to start its program of initial public offerings in September, and that two or three companies should be listed by the end of the year.

The country’s first offering of green bonds by a private company is expected to take place on Wednesday with value of $100 million, FRA Chairman Mohamed Omran also told a news conference.

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Omran did not name the companies expected to issue shares this year, or the company due offer green bonds. An FRA official and a banking source said the bond offer would be made by Egypt’s Commercial International Bank.

International financial institutions have praised Egypt’s macro-economic reforms but say the presence of the state has hampered private-sector growth.

As part of structural reform plans, Egypt had informed the International Monetary Fund of its intention to relaunch its IPO
program, IMF Mission Chief for Egypt Celine Allard said on Monday, after the fund allowed the release of the final installment of a $5.4 billion loan to Egypt.

The state retained a “relatively significant” role in the economy, and “sometimes those state-owned enterprises have benefited from advantages,” Allard said.

“Our recommendation is to gradually reduce the role of the state in the economy to allow the private sector to unleash Egypt’s growth potential.”

FRA sources previously told Reuters that state-owned Banque du Caire was one of four listed companies instructed to sell shares by the end of the year.

In Egypt, companies are allowed to list before actually offering shares to be traded.

Egypt’s government said in March 2018 it would sell stakes in 23 companies, but sold only a 4.5 percent stake in Eastern Tobacco .

Egyptian officials say market turbulence and the coronavirus pandemic have delayed planned share sales.

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