Experts comment on acquisition of shares in 7 Egyptian companies by Emirati Holding Company

Cairo, Egypt (CNN) – The Egyptian government has sold interests it owns in 5 companies listed on the Egyptian Stock Exchange to the UAE ADQ Holding Company for $ 1.8 billion, representing the total number of companies listed by the UAE sovereign fund acquired on 7 companies. within a year.

Experts have explained the reasons for these deals within the Egyptian government’s plan to deal with the decline in the dollar’s reserves following the negative effects of the global inflation wave and the Russo-Ukrainian war on tourism and exports and the increase in burdens of imports of basic commodities and oil.

Saudi Arabia, Qatar and the UAE have previously announced the allocation of $ 22 billion in investments and financing to Egypt, divided between $ 5 billion deposited by Saudi Arabia in the Central Bank of Egypt, another $ 10 billion deposited by the Saudi sovereign fund pumped, $ 5 billion that Qatar intends to invest in Egypt, and $ 2 billion from the Abu Dhabi fund. The sovereign will buy shares in companies listed on the Egyptian Stock Exchange, to support Cairo to face the wave of global inflation and the Russo-Ukrainian war.

Mohamed Abdel Hakim, head of the research division at Faisal Securities Brokerage Company, said the main objective of the state’s sale of shares he owns in companies listed on the stock exchange is to increase dollar liquidity from collecting transactions in US dollars. which contributes to the provision of the state’s needs of dollars for the import of basic commodities, pointing out The foreign exchange reserves of Egypt decreased during the month of March to reach the level of 37 billion, which is affected by the exit of indirect foreign investment, and consequently, payment for transactions in dollars which positively affects the supply of the green currency.

The Central Bank of Egypt previously announced a decline in foreign exchange cash reserves to $ 37.082 billion at the end of last March, compared to $ 40.99 billion at the end of last February, and explained the case as the use of a part of the reserve to cover the foreign exchange needs of the Egyptian market and to cover the exit of foreign investments and international portfolios, as well as to ensure the import of strategic goods, in addition to the payment of international obligations relating to the country’s foreign debt.

Abdel Hakim added, in exclusive statements to CNN in Arabic, that the UAE fund has managed to acquire shares in companies operating in key sectors and achieved strong business results, and the Commercial International Bank, which is one of the largest banks in Egypt, and the two companies, MOPCO and Abu Qir Fertilizers, which operate in the fertilizer sector.In this sector, an increase in demand and an increase in exports after the devaluation of the pound against the dollar, in addition Fawry, one of the largest financial technology companies.

Mohamed Abdel Hakim pointed out that the implementation of the Emirati fund’s acquisition transactions confirms that the Egyptian capital market is attractive and that the demand from investors is facing in the face of the decline in share prices to attractive levels, with the expectation that the Egyptian Stock exchange new transactions through the Emirati fund in Egypt during the coming period.

In response to the government’s intention to resume the government presentation program, the head of the research department at Faisal Company linked the resumption of the program to the existence of an attractive foreign investment environment, adding that the Egyptian government is ready for the program and already has companies ready to offer such as Banque du Caire and Enppi, but it remains to facilitate the attraction of investments by providing the opportunity more for the private sector.

Mohamed Hassan, managing director of Bloom Egypt for Financial Investments, agreed with him that the proceeds of the Emirati sovereign fund’s acquisition of shares in companies listed on the Egyptian Stock Exchange are to provide the dollar out of payment in exchange for the sale of government shares in Secondly, it encourages new foreign investors to study investment opportunities in the stock market, and thirdly, it provides liquidity in the market, either to pump it into investments or to buy shares in the stock exchange again.

The UAE Holding Company on Tuesday acquired interests in 5 companies listed on the Egyptian Stock Exchange, which are Commercial International Bank, Fawry for Banking Technology and Electronic Payments, Alexandria Company for Container and Goods Handling, Misr Fertilizer Production Companies – MOPCO, and Abu . Qir Fertilizers and Chemical Industries, two of the major industrial companies in Egypt, brings the total number of companies acquiring interests to 7, having previously acquired Sodic and Amoun Pharmaceuticals.

Hassan expected that in the coming period there would be new acquisitions on the Egyptian Stock Exchange, whether from the UAE sovereign fund or other large investment funds, given the Egyptian capital market’s presence of strong companies, and in return their share prices. very cheap – almost the cheapest in the world – which is considered an Opportunity to buy before the funds.

In exclusive statements to CNN in Arabic, Mohamed Hassan stressed the importance of resuming the government’s offering program following the implementation of the Emirati Fund’s acquisition transactions, as these transactions contribute to the emergence of large investors to acquire interests in the companies operating in the IPO program.

And the Egyptian government previously announced, in March 2018, the implementation of a government offering program that includes 23 companies, to encourage investment in the capital market, and the return of 80 billion Egyptian pounds (about 510 million dollars) from the proceeds in from the sale of their shares in these companies, and a year later it offered 4.5% of the shares of The Eastern Tobacco Company, and also has an interest in the two companies, e-Finance and Abu Qir Fertilizers , offered in recent months.

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