The Egyptian Exchange (EGX) plans to launch a new market called ‘Tanmeya’, where trading rules are based on the issuer company’s request. EGX can list companies on this market directly, especially those that were delisted involuntarily, to make it easier for interested parties to exit.
This initiative is part of the EGX’s development strategy, which will not affect the registration processes of companies on the exchange. This market will have special regulations, such as auction methods, weekly trading days, maximum quantities and values for operations based on a percentage of the issued shares, and a fixed value for transactions.
EGX will also engage with major shareholders of listed companies, especially government-owned ones, to urge them to offer more shares. This will boost liquidity and trading in these companies’ shares, and help them raise funds through the EGX for future expansions.
EGX will coordinate with the Financial Regulatory Authority (FRA) to revise the regulations for offerings, especially for private placement and additional offerings of previously listed companies. Special offerings will be open to all brokerage firms with eligible clients, increasing competition and attracting more customers by involving more brokerage companies.
The strategy also outlines the coordination between EGX and FRA to address all parties involved in government offerings. This includes categorizing and classifying listed companies in the offering plan into similar groups, based on sector or target clients for the offering.
The aim is to assign these groups to experienced managers with a strong business background, creating more opportunities for specialization, consistency, study, and marketing within the time frame for executives. This applies to any sale method, whether public offering, private placement, joint offering, or with strategic investors through capital increases.
EGX is also exploring the possibility, with FRA and the Ministry of Finance, of offering tax benefits and incentives for a certain period from the date of the companies’ offerings. These companies are expected to offer at least 20% of their capital for trading in a public offering on the EGX.
Tax benefits will also apply to companies that complete the offering and export their products or produce alternatives to imports. The listing and trading of these companies’ shares on the EGX will give them a better chance of getting the financing they need at a reasonable cost, enabling their growth and expansion in production.
The new strategy considers tax incentives to attract companies for listing, while investors in the stock exchange await the implementation of capital gains tax, expected to be issued soon.
