Second tranche of Emaar Misr's IPO 36 times oversubscribed

The second tranche of Egyptian property company Emaar Misr's initial public offering (IPO) was oversubscribed by about 36 times, the Cairo stock exchange said on Thursday.

The listing is expected to be the largest flotation on the Cairo exchange since 2007.

Emaar Misr, the Egyptian arm of Dubai real estate developer Emaar Properties, drew subscriptions for 3.23 billion shares after offering 90 million shares last week in the second tranche of its IPO, a stock exchange statement said.

The offering was priced at 3.8 Egyptian pounds ($0.4984) per share, parent Emaar Properties said last Thursday.

Emaar Misr is floating 12.99 per cent of the company, amounting to 600 million shares. Of these, 510 million have been allocated to institutional investors. That tranche was 11 times oversubscribed, Dubai-listed Emaar had said.

A recent flurry of activity on the Cairo bourse, including Emaar Misr's IPO, signals resurgent interest from international investors in a market looking to restore confidence.

"The subscription reflects demand for investment in a company like Emaar ... and confirms there is liquidity in the market. It is just seeking something worth investing in," Ahmed El Guindy, head of investment banking at EGF-Hermes, told Reuters.

Emaar Misr had appointed EFG Hermes and JP Morgan as the joint global coordinators and joint bookrunners for the offer.

"The huge subscription is an example for other premium companies that want to expand and fund that expansion through the market," Guindy added.

Eissa Fathi, managing director of Cairo Brokerage, offered a less bullish view.

"The company's reputation in the Arab world helped with the huge demand," he told Reuters. "But I do not expect huge success for the stock because the Egyptian market (already) has stocks for huge and powerful real estate companies."

Emaar Misr has a portfolio of investments in Egypt worth around 53 billion Egyptian pounds ($6.95 billion), according to its website.

Sale proceeds will help fund the firm's developments in Egypt and to buy land.




 

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