EGX gets benefit from economic, political reforms: PwC

CAIRO – 6 March 2018: Egypt’s markets have reaped benefits from a comparative improvement in its macroeconomic and political environment from prior years, Pricewaterhousecoopers (PwC) said Tuesday in its 2017 African Capital Markets Watch publication.

The publication added that the Egyptian Exchange (EGX) posted 13 further offerings (FOs) and four initial public offerings (IPOs) in 2017, recording a 70 percent increase in overall equity capital Market (ECM) transaction volume over 2016.

PwC stated that African equity capital market transaction volume and value improved in 2017, referring that 2017 saw the largest IPO over the trailing five-year period, and an increase in the total value of equity capital market (ECM) transactions of 49 percent between 2016 and 2017 in US dollar terms.

Regarding the IPOs, the publication clarified that in 2017, five of the top ten IPOs proceeds were launched on the Johannesburg Stock Exchange (JSE) as well as two on the Egyptian Stock Exchange (EGX) and the BRVM, demonstrating stabilization in the Egyptian market, growth in Francophone West African economic activity, and the continued attraction of the JSE as an investment destination.

PwC said that the IPO activity on the North African stock exchanges – Egypt, Morocco, Tunisia and Algeria – decreased by 61 percent in terms of value of IPO proceeds.

It attributed this decline to the non-recurrence of significant listings on the Casablanca and Algiers exchanges when compared with the prior year.

The publication pointed out that the composition of the top ten African IPOs by value in 2017 was mostly concentrated in South Africa, Egypt, Tanzania and the UEMOA region, represented by the BRVM.

It expected that the market activity recovery seen in 2017 will gain momentum in 2018 against a more stable political and economic backdrop.

Further offers (FOs)

The recent publication said that Egypt accounted for the next-largest amount of FO volume and value for 2017 at 14 percent and for the five-year period 2013- 2017 at 6 percent.

Egypt and Nigeria both experienced a significant increase in FO value and volume; Egypt noted a 117 percent increase in FO volume and a 275 percent increase in value, and Nigeria moved from no activity in 2016 to six FOs, raising $417.8 million, according to the publication.

It added that Egypt accounted for the largest sovereign issuances in 2017 in terms of value, raising a total of $7.2 billion.

“There was also a 68 percent increase in the total value of non-local currency corporate debt issuances from 2016 to 2017 as several first-time issuers, such as Liquid Telecommunications, accessed the market,” the publication added.

“2017 African Capital Markets Watch publication” analyses equity and debt capital market transactions that took place between 2013 and 2017 on exchanges throughout Africa, as well as transactions by African companies on international exchanges.

It listed all new primary market equity initial public offerings (IPOs) and further offers (FOs) by listed companies, in which capital was raised on Africa’s principal stock markets and market segments.

The report also included IPO and FO activity of African companies on international exchanges or non-African companies on African exchanges, on an annual basis.