By Mahmoud Hammad
Money market experts have presented five solutions for the return of propositions to the Egyptian Stock Exchange, after the postponement of more than 10 companies of selling shares in the money market, due to unsuitable timings as stock markets suffer from poor liquidity and declining volumes of trading.
The companies which have requested a postponement are namely El Tawfiq Leasing Company, Raya Contact Center, Inter Cairo Aluminum Industry, MOPCO Company for Fertilizers, DBK Pharmaceutical Industries, Alamia Print Shop, Sky Light Tourist Company, Beltone Capital Holding and Egypt for Financial Investments.
EFG – Hermes has postponed putting Domty Company in the stock market until the first quarter of next year. Prime has also postponed putting Egypt Italy Company, while Pioneers has also postponed putting Rouya Company on the Egyptian stock exchange.
Mohamed Said, a financial markets analyst, said the suitable time for putting companies on the stock exchange is when the liquidity and the volume of trading on the market is high. The best example was when Telecom Egypt, AMOC and Sidi Krier companies were put on the Egyptian exchange market.
He explained that it’s an improper time to put companies on the money market due to poor liquidity and trading volumes, therefore, companies will not be able to obtain adequate financing.
He added that preparing the Egyptian exchange to accept new proposals requires that the Egyptian economy receives a good rating from credit rating agencies, as well as, a radical change of the laws and investment legislation in Egypt. A clear improvement in the Egyptian economy is also required through high growth rates and real direct investments on the ground.
“The government should give attention to the money market and the Egyptian Exchange to be among its priorities. It is clear that those in charge of the moneymarket are not informing investors, the companies or the government of the importance of the money market and how much they benefit from the stock exchange.”
Ahmed Zeinhom, a money market expert, said recovery of Egyptian exchange and revitalizing propositions in the market need directives by the president to establish a closed sovereign fund between the Long Live Egypt Fund, the National Investment Bank, public banks, and insurance and social security companies. It has to be done to carry out investments in assets of Egyptian companies listed in the stock exchange, instead of their acquisition by foreigners and Arabs at low prices…
