Capital markets in 2022: It just wasn’t the year for fresh paper

Let’s just say it outright: 2022 was not a great year for the EGX. Last year, we were cheering the fact that Egypt saw four IPOs — but we’re ending 2022 on a less positive note, albeit not as bad as the zero we ended 2020 with.

The two IPOs that hit the EGX in 2022: Al Khair River for Development and Investment (Nahr El Khair) got the ball rolling with our first listing of 2022 in January, followed by cosmeceutical giant Macro Group Pharma’s EGP 1.3 bn EGX debut in February.

There were others who tried to push through: Ghazl El Mahalla FC braved difficult market conditions with its planned micro-IPO, in which it was seeking to raise EGP 135 mn by selling a 67.5% stake. The club raised EGP 37 mn during the institutional component of the offering in November and retail investors put in orders for just 18% of the shares made available to the public, despite being extended twice due to weak investor interest. The planned IPO was by all means a small transaction, but could have played a significant role in encouraging other sporting clubs — including Al Ahly — to follow suit.

We started 2022 with an optimistic outlook on Egypt’s IPO pipeline, not least because of the state privatization program: At the start of the year, the government envisioned as many as 10 state-owned companies selling shares on the bourse in 2022, either via IPOs or secondary stake sales. Officials including Finance Minister Mohamed Maait and Planning Minister Hala El Said each signaled the state privatization program would be revived early in the year.