No one is planning an initial public offering on the Cairo & Alexandria Stock Exchanges (Case) between now and the end of Ramadan, as activity on the market dries up for the summer.
At the exchange itself, however, there is plenty of activity as chairman Maged Shawky continues to build support for the eventual privatisation of Case. Over his three years in charge of the exchange, Shawky has quietly prepared for a sell-off. The balance sheet has been overhauled to prepare the company for full financial disclosure and since 2005, 800 companies have been delisted from the exchange for flouting its rules. Shawky expects that all the companies left on the exchange will follow its rules by the end of this year.
A new trading platform from Nasdaq-OMX, the US-Swedish group, will be launched in July giving Case the technological infrastructure needed for further growth. New types of securities will become available from next year, including derivatives. Case will take its first step into the private sector by launching a privatised subsidiary to carry out the trading of derivatives.
Privatisation will be good for the Case. Most of its budget is spent on maintaining its infrastructure – its IT systems and phone network. Privatising the exchange would create a new source of income that could be used to improve Case’s infrastructure and reduce its reliance on the Egyptian taxpayer.
Both outcomes would strengthen the bourse’s position at the heart of the economy.