Ibnsina’s IPO may drag EGX down – Analysis

By: Heba El-Kordy

Cairo – Mubasher: The benchmark EGX30 index has lost more than 400 points this week after it hit records high near 14,800 points last week.

This came on the sidelines of launching Ibnsina Pharma’s initial public offering (IPO), which has been oversubscribed more than 17 times, luring various retail investors from the USA, South Africa, Europe, and GCC states.

Analysts expressed different opinions on Ibnsina’s IPO impact on the Egyptian Exchange (EGX), as some find it would contribute to boosting liquidity, while the others believe the IPO has nothing to do with the EGX’s performance.

In November, the EGX approved the initial listing of Ibnsina with an issued share capital of EGP 168 million distributed over 672 million shares at a par value of 25 piasters per share.


Ibnsina IPO

Ibnsina IPO has partially dragged the EGX30 index down, in line with the correction wave the index sees, market analyst Toni Kamal told Mubasher.

A segment of investors used a part of their investment portfolios’ liquidity to participate in the IPO, Kamal highlighted, adding that this liquidity will return back to the EGX after the completion of the IPO today.

Saudi and Emirati retail investors acquired 30% or EGP 22.5 billion of the IPO’s total purchasing orders.

The OPR market has taken place last Tuesday to receive Ibnsina’s IPO subscriptions until 7 December.

The EGX may not maintain the declining performance as the EGX30 index has support at 14,400 and 14,350 points.

It was expected that the EGX30 index will see a correction after rising 1000 points from 13,675 and 14,725 points, he indicated.



Moreover, Rania Yacoub, chairperson of 3Way Finance, said that the profit-taking the EGX witnessed after hitting high records is normal.

The EGX is forecast to see a long-term and medium-term upward trend, Yacoub continued, pointing out that it would be positive to repurchase during profit-taking to push the EGX higher towards new levels by the beginning of 2018.

The real estate sector helped the EGX to hit records high, she alluded, forecasting the banking, petrochemicals, and financial services sectors to lure buoyant liquidity when the EGX rebounds and rises once again over the coming period.

Yacoub noted that Ibnsina’s IPO has no effect on the performance of the EGX, explaining that the stock market is only seeing profit-taking ahead of this year-end.


Translated by: Mai Ezz El-Din 

Mubasher Contribution Time: 07-Dec-2017 11:43 (GMT)
Mubasher Last Update Time: 07-Dec-2017 12:02 (GMT)

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