How does Egypt achieve urgent dollar liquidity from selling companies on the stock exchange?

The Egyptian government intends to accelerate the offering of shares in companies owned by it and listed on the stock exchange, which can attract urgent dollar liquidity.

The countdown to downgrading Egypt's credit rating began, with Capital Intelligence announcing the downgrading of Egypt's long-term domestic debt in local and foreign currencies to "B" from "B+", and amending the future outlook from negative to stable.

Selling shares listed on the stock exchange

Last month, Moody's, the international credit rating agency, gave the Egyptian government three months to give a negative review, without a reduction, until a new review is conducted in accordance with the reform measures that the Egyptian government will present.

The Egyptian government is seeking to sell shares in government companies worth $5 billion, during the period from October 2023 to June 2024, after raising the number of companies from 32 to 35 companies, adding Eastern Tobacco, Egyptian Telecom, and Al-Ezz Dekheila, which completed the process of selling them to an Egyptian investor who will pay... The bulk of the transaction is in dollars.

Official data indicated that there was an offer to acquire a share not exceeding 30% of the Chemical Holding Company’s share (more than 50%) in the Eastern Tobacco Company (Eastern Company), the largest cigarette producer in Egypt.

Taqa Arabia Company, newly listed on the stock exchange, submitted an offer to buy a share in the National Company for the Sale and Distribution of Petroleum Products, “Wataniya,” and qualified for the second stage of the list of companies competing for the deal.

Egyptian Telecommunications Company

Telecom Egypt's 45% stake in Vodafone Egypt is considered one of the most important resources through which it can quickly attract foreign currency, given the attractiveness of the deal and the desire of many Arab investors to seize it, in addition to shares from Abu Qir Fertilizers and Alexandria Container Handling. 

Economist Dr. Ezz El-Din Hassanein believes, in a press statement, that the current period will witness many deals and sales of the government’s shares in its companies listed on the stock exchange, which are considered companies in terms of their financial statements and business results, and thus the ease of the exit process from them due to the urgent need to provide the dollar. 

A difficult time for the Egyptian economy

Hassanein added, “The dollar must be brought in urgently, whether by offering a number of strong companies for sale, or starting to partner with foreign investors to pump more dollars.”

The economist believes that banks should offer attractive dollar certificates to Egyptian citizens, to urge them to give up the dollar in banks, to achieve gains and support the Egyptian economy.

Attract foreign investment faster

Dr. Ahmed Al-Sayed, a financial markets expert, points out that there are many stocks that can bring significant dollar liquidity to the state, led by Telecom Egypt and Banque du Caire, while achieving what the government promised in its exit from strong financial companies in favor of foreign investors who implement the deal in dollars.

He explained that listing companies on the stock exchange would be the fastest and most serious in attracting foreign investments, given that international investment funds follow the Egyptian stock market indices and carefully study the levels of profitability in the Egyptian market.