Activity on EGX Decreased by 72% in 2016: PwC Report

CAIRO – 19 Feb. 2017: Business consultancy firm PricewaterhouseCoopers (PwC) said in a report published in February that IPO activity on the Egyptian Stock Exchange (EGX) decreased significantly.

The PwC 2016 Africa Capital Markets Watch report added that IPO activity on the EGX decreased significantly by 72 percent in terms of value of IPO proceeds, as companies delayed listing plans in anticipation of a potential stabilization program by the International Monetary Fund (IMF) and the flotation of the Egyptian Pound last November.

The Central Bank of Egypt had liberated the exchange rate last November. This came as a part of the government's reform plan aimed at securing a three-year $12 billion loan from the IMF in an attempt to revitalize the Egyptian economy, which has been on the decline over the past six years following the January 25 Revolution.

The report focused on equity and debt capital markets transactions that took place between 2012 and 2016 on exchanges throughout Africa, as well as transactions by African companies on international exchanges.

“Many African economies, in particular those dependent on resources suffered in a low growth environment, significantly reducing ECM activity, and a continued lack of clarity around foreign exchange risk in Nigeria further discouraged foreign investment,” the report said citing its Capital Markets partner based in Lagos, Darrell McGraw.

The report further indicated that there were some significant increases in IPO capital raised on exchanges in Ghana, Morocco and Botswana compared to 2015, due to partial privatizations of state-owned entities.

PwC has been operating in Egypt and the Middle East for 40 years.