October 21, 2018 / 10:41 AM / 23 days ago

UPDATE 1-Egypt's EGX30 index falls after government signals delay to IPO programme

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CAIRO, Oct 21 (Reuters) - Egypt’s blue-chip EGX30 index fell more than 1 percent at the start of trading on Sunday after the government signalled a delay to its IPO programme.

The benchmark index was down 1.57 percent to 13,430 points by 0845 GMT.

The government said on Friday it would postpone a planned offering of 4.5 percent of tobacco producer Eastern Company , the first of several share sales including IPOs that were expected before year end.

The government said the delay was due to global market volatility. Shares in the company, which has a monopoly over the tobacco industry in Egypt, rose 3.3 percent on Sunday.

“The news of the offerings’ postponement is certainly one of the reasons for the (index’s) fall today because there was a confirmation for the offering and a set timetable,” said Ibrahem Elnemr, head of technical analysis at the Cairo-based Naeem Brokerage.

The finance ministry said in September the Eastern Company share sale, expected to raise around 2 billion Egyptian pounds ($110 million), would kick off a planned IPO programme of more than 20 companies, including four this year.

“The delay was expected. What would push the government to offer now? The balance was difficult and this is not the appropriate time for the offerings,” said head of research at Pharos Securities Brokerage, Radwa El-Swaify.

Egypt has been hit by a global emerging markets sell-off, as worries about growth undermined investors’ appetite for risk.

$1 = 17.9050 Egyptian pounds Reporting by Ehab Farouk and Nadine Awadalla; Writing by Yousef Saba; editing by John Stonestreet

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