Egypts Fawry Surges In Trading Debut In Cairo

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The offering represented 36 per cent of Fawry’s share capital and raised about EGP 1.6 billion ($97 million).

The first company to make its trading debut on Egyptian Exchange (EGX) this year, Fawry for Banking & Payment Technology Services, an electronic-payments firm saw its shares jump after its initial public offering (IPO), reported Bloomberg.

The stock rose 29 per cent to trade at EGP 8.31, after shares were sold at EGP 6.46 in the IPO which was managed by EFG Hermes Holding.

Fawry facilitates electronic bill-payments in urban neighbourhoods and counts 20 million Egyptians as customers, its retail network includes grocers and pharmacies.

According to EFG Hermes, a tranche of the IPO offered to institutional investors was oversubscribed by 15.9 times.

Fawry is the first IPO on the EGX since Sarwa Capital in October 2018, as high-interest rates attract investors to fixed income rather than equities. The government has delayed plans to offer stakes in some state-run companies, sales that were supposed to streamline the bloated public sector and turn around loss-making enterprises.

Amr Elalfy, the Head of Research at SHUAA Securities Egypt, said that following the good reception to the IPO, the stock will likely outperform within its first month of trading.

A stock stabilisation fund managed by EFG Hermes will help sustain the stock price in the first month of trading. This measure should support the stock holders from the public offering, potential risks to the stock’s performance include low liquidity, revenue and growth rates that fail to meet market expectations and weakening margins.