July 21, 2022
The Egyptian government is selling two state companies.
Yesterday the Egyptian cabinet approved the listing of the National Company for Petroleum and the National Company for Natural Water in Siwa on the Egyptian stock exchange, the state-owned news outlet Al-Ahram reported.
The National Company for Petroleum runs gas stations in Egypt. The National Company for Natural Water in Siwa produces both water and olive oil, according to the National Service Products Organization. The organization is part of the Egyptian Ministry of Defense.
Why it matters: The Egyptian government announced its intention to list state and military-owned companies on The Egyptian stock exchange earlier this year. The government was motivated by the poor state of the Egyptian economy, including Egypt’s budget deficit and high debt to gross domestic product ratio. Gulf states are particularly interested in acquiring them.
Egypt’s economy has been particularly impacted by Russian invasion of Ukraine, and food prices are rising significantly in the North African country. Before the war, Egypt imported most of its wheat from Ukraine and Russia. Egypt is also experiencing high inflation.
The Abu Dhabi-based AD Ports Group acquired stakes in two Egyptian shipping companies earlier this month.
Know more: Egypt’s stock exchange has been performing poorly. The EGX 30 index, which includes the most liquid companies on the Egyptian Exchange, was above 11,700 points in April. In early July, it fell to around 8,500 points. The index has since rebounded to about 9,300 points and rose 1% today, according to market data.
What’s next: The Egyptian government previously said it would sell some of its companies by the end of this year and more over the next four years. The cabinet has not released details on the National Company for Petroleum and the National Company for Natural Water in Siwa’s upcoming listings on the stock exchange.