Banque du Caire EGX debut: record EGP36.37bn IPO trades

Banque du Caire shares began trading on the Egyptian Exchange on Monday, 2 November, closing at EGP5.31 after an initial public offering that raised EGP36.37bn (about $658m), which the exchange called its largest ever.

The Banque du Caire EGX debut followed the sale by Banque Misr of 6.8625 billion shares, or 45 per cent of the lender, at EGP5.30 each, the top of the marketed range. The state retains 55 per cent of the bank, which was founded in 1952 and is Egypt’s third-largest state-owned lender.

The stock touched EGP5.68 in the opening minutes and dipped to EGP5.25 before closing 0.19 per cent above the offer price, according to EnterpriseAM. Some 373.1 million shares worth EGP2.02bn (about $37m) changed hands across about 30,100 trades, making it the most traded stock on the exchange that day.

Demand behind the Banque du Caire EGX debut

Omar Radwan, Executive Chairman of the EGX, said the public tranche was covered more than 27 times, with purchase orders exceeding 9.28 billion shares, Daily News Egypt reported. He added that more than $500m was transferred into Egypt from abroad to take part in the offering.

Institutional orders reached about EGP205.8bn (about $3.7bn), covering the private placement 5.95 times, or 19.79 times excluding cornerstone investors, according to EnterpriseAM. Four foreign funds committed $256m before the books opened.

The International Finance Corporation invested $100m for a 7 per cent stake, Arab Finance reported, and the European Bank for Reconstruction and Development also invested $100m, which AFP put at a 6.9 per cent share. Retail investors hold 2.25 per cent of the bank following the allocation.

CI Capital acted as lead global coordinator and joint bookrunner, with EFG Hermes as joint global coordinator and joint bookrunner. Baker Tilly set the fair value that capped the price range. The offering valued the bank at about EGP80.83bn (about $1.46bn) at the offer price.

A test case for Egypt’s state offerings programme

Prime Minister Mostafa Madbouly attended the start of trading alongside Central Bank of Egypt Governor Hassan Abdalla, Financial Regulatory Authority Chairman Islam Azzam and Banque du Caire Managing Director and CEO Hussein Abaza. Madbouly said the government would continue its programme of state asset offerings to unlock greater value from public assets, according to AFP.

Radwan said: “Together, we record the completion of the largest listing in the history of the EGX.” Abaza told AFP: “This is an IPO that’s been more than 20 years on and off,” citing the Covid-19 pandemic and the wars in Ukraine and Gaza as hurdles.

The largest Egypt IPO to date is also the state’s first privatisation by listing in two years and part of commitments under the country’s International Monetary Fund programme, which expires on 15 December. EnterpriseAM reported that the Treasury will take up to half of the proceeds, or about EGP18.2bn (about $329m), to ease pressure on public debt.

The Banque du Caire EGX debut comes days after the Central Bank of Egypt raised its key interest rates by 100 basis points to 20 per cent, and follows the MNT-Halan listing, which rose 6.9 per cent on its first day in October. The Banque du Caire pricing was reported earlier on this site when the final price was set at EGP5.30.

What happens next

Retail investors who received shares in the offering can sell them back to CI Capital at EGP5.30 until 1 December under a retail buyback arrangement, EnterpriseAM reported. Randa Hamed, Managing Director of Okaz Asset Management, told the publication that earnings growth rather than valuation would determine returns once that window closes.

The government plans to list or sell stakes in at least 20 state companies, with a target of $3bn to $4bn before the end of the year, according to EnterpriseAM. Misr Life Insurance is expected to list in late November or early December, with El Nasr Glass and Yayat due in December.

For Banque du Caire, the IFC investment targets lifting the number of customers the bank finances from about 899,000 to 1.9 million by 2030 and growing total lending from about $5bn to $8.9bn, according to Arab Finance. Abaza has described the IPO as a first step, with the state’s remaining 55 per cent stake open to further sell-downs over time.