Etisalat Egypt considers floating in Egyptian Stock Market: CFO

Waad Ahmed
Etisalat

Etisalat Egypt is considering listing its shares on Egypt's stock exchange (EGX), a move that the company's chief financial officer Ehab Rusdhi says would be a vote of confidence in Egypt's economic hopes.

Rushdi said that the mobile services company's inquiries into EGX are due to the Egyptian bourse's recent positive performance.

However, he voiced concerns of unexpected economic turbulence in the future, which would likely see the company list its shares elsewhere, according to Al-Ahram's Arabic news website.

Still, if Etisalat Egypt undertakes its Initial Public Offering (IPO) in the EGX, it would be the only listed mobile service company in the country, after the delisting of telecom company Mobinil, which Rushdi said would be a competitive advantage.

Before the January 2011 uprising, Etisalat Egypt had been consulting with eight investment banks on the public offering, which was intended for capital expansion. 

However, resultant political developments have taken their toll on Egypt's stock exchange, bringing trading volumes to lows not seen in 10 years.

Speaking last month at a conference on Egypt’s financial regulations, EGX head Mohamed Omran said that companies were unable to float as they could not meet the bourse’s requirement of achieving profitability in two consecutive years.

“Most companies have suffered significantly since the eruption of the January 2011 revolution, and hence were unable to meet the bourse’s requirements,” Omran said.

Amr El-Alfy, head of research at Mubasher Financial Services (MFS), told Ahram Online that Etisalat's possible undertaking of its IPO would help raise the market's liquidity.

Karim Awad, co-CEO of Egypt’s largest investment bank EFG-Hermes, told Al-Mal daily business newspaper in January that his company was lining up three market flotations worth more than LE2.1 billion ($300 million) which would see light this year.

A few months earlier, Egyptian Steel chairman Ahmed Abou Hashima announced plans to float the company by 2015, according to reports from Reuters.

Egypt’s bourse has made significant gains in the last few months, achieving record turnover figures exceeding LE1.4 billion ($201 million) for listed stocks and seeing its benchmark index EGX30 return to 2010 levels surpassing 8,000 points.