Egypt's Beltone Financial Holding expects to manage four stock market flotations worth a total of more than LE2.5 billion ($311 million) in the first half of 2016 on the back of improved market conditions, its chairman said.
The offerings, including one by Beltone Capital, managed by Beltone Financial's private equity arm, had been expected in 2015 but were postponed when an emerging markets rout deterred investors from Egyptian markets.
"These IPOs were not cancelled, they were postponed because of market conditions … We hope to (issue) them in the first half of 2016," Aladin Saba, who founded Beltone in 2002, told Reuters at the Reuters Middle East Investment Summit.
Emerging market assets sold off over the summer due to worries about a slowdown in China, weakening commodity prices, and the possibility of a U.S. interest rate rise.
The turmoil saw Egypt's main equities index plunge from above 10,000 points in February to a low of 6,641 in August. It last closed at 7,435.
Saba declined to name the companies planning floats but said they included one in the oil sector and two in consumer goods. Beltone, which has brokerage, asset management, investment banking and private equity operations, is also pushing ahead with plans to invest 300 million Egyptian pounds in non-banking financial services in Egypt.
INVESTMENT PLANS
The investment programme, two thirds of which was financed by a share issue, was planned for 2015 but will be now be continued into 2016, Saba said. "We have not spent the money yet … If the plans we are working on go through then we will have spent around 170 million pounds in 2015," he said. As part of that programme, Beltone is looking to invest in leasing and mortgage finance, Saba said.
Beltone won a licence last year to manage Egypt's first exchange traded fund (ETF), dubbed XT-MISR, which tracks the top 30 companies and was expected to help boost bourse liquidity.
Saba said poor market conditions meant XT-MISR had not been as successful as hoped. Beltone is seeking to register it on Nasdaq Dubai in the first quarter of 2016 in hope of taking the product to a wider audience, Saba said.
Egypt has struggled to restore growth and lure back foreign investors since the 2011 uprising that ended Hosni Mubarak's 30-year rule and ushered in a period of political instability.
The economy grew 4.2 percent last year, higher than the previous few years but still below the levels of between 5 and 7 percent it achieved before the revolt.
Saba is optimistic Egypt's economy is on a recovery path in light of a major gas find in the Mediterranean, but said a currency crisis was deterring investors.
Egypt introduced strict controls on capital in February to shut down a black market in dollars. "When someone wants to put his money in the country while being aware that there is a devaluation on the way, he will wait until the devaluation happens," Saba said. Saba declined comment on an offer for Beltone from Orascom Telecom Media and Technology. Egypt's regulator is looking into the offer.
