Economists say Egypt is most likely to accelerate privatization through public offerings on the stock exchange, where strong recent gains have opened a narrower but more viable path for selling state assets as the country awaits approval of key International Monetary Fund loan reviews.
The government is expecting the IMF executive board to consider the fifth and sixth reviews of Egypt’s $8 billion program after the Christmas holidays, officials say. While the texts of the reviews have not been published, IMF statements suggest the fund remains focused on expanding the sale of state-owned assets—an area where Egypt has made limited progress.
In its fourth review in July, the IMF criticized Egypt for falling short of its targets, noting that while the government pledged to sell 35 state-owned companies, sales were completed in only nine cases, most of them involving partial stake sales rather than full privatization.
Recent stock market momentum has reshaped the debate over how that gap could be closed. Egypt’s benchmark index rose more than 40% over the past year, supported by easing inflation and looser monetary policy, which reduced returns on bank savings and increased the appeal of equities.
That shift has strengthened the case for public offerings over sales to strategic investors. Amr Elalfy, head of equity strategy at Thndr Securities, said the market was now better positioned to absorb state listings.
“Large government offerings will attract new capital from outside the stock market by bringing in new investors, especially with declining interest rates and easing inflation in Egypt,” Elalfy told Al Manassa.
Analysts say public offerings are particularly suited to large or complex state-owned firms that are difficult to sell to a single buyer. Former Prime Holding head of research Haitham Fahmy pointed to the New Administrative Capital company as an example.
“There are companies with very large market values that are difficult to sell to a single strategic investor, such as the New Administrative Capital company that is planned for listing,” Fahmy said.
The company announced plans in 2023 to float a stake on the stock exchange, but no concrete steps have since followed, highlighting broader hesitation over timing, valuation, and political sensitivity.
Critics argue that the government’s past preference for strategic investors has delivered short-term inflows at a longer-term cost. Hany Genena, head of research at investment bank Pharos, said such sales risk increasing pressure on Egypt’s balance of payments.
“Selling to a strategic investor brings in urgent investment, but profits are later distributed and transferred abroad, which puts pressure on the balance of payments and affects the current account,” Genena told Al Manassa.
That concern resurfaced after the 2022 sale of a government stake in Alexandria Container and Cargo Handling Company to a Saudi firm, which later resold the stake in 2025 for a profit exceeding $200 million.
Debate continues over which sectors are best suited for privatization. Elalfy said banks were among the easiest candidates due to transparent financial reporting and central bank oversight, with insurance companies sharing similar advantages.
Genena disagreed, arguing that banks currently lag more attractive sectors. “Fintech, education, and healthcare trade at price-to-earnings multiples of 20 to 25, while banks trade at three to five,” he said, adding that low dividends have weighed on investor interest.
However, he said the recent economic recovery could improve banks’ prospects. “If the economic situation improves, bank dividends will rise, which would be reflected in higher valuations—and then it would be better to list banks on the stock exchange,” he said.
Outside the financial sector, Genena noted that several state-owned companies offer regular dividends and hold high-value assets, including pharmaceutical firms.
The most politically sensitive issue remains companies affiliated with the armed forces. Progress there has been slow, with analysts citing unresolved asset valuation and ownership issues. Fahmy said delays in listing military-linked firms—particularly Wataniya, the fuel distribution company—were due to difficulties in documenting assets spread across multiple governorates.
An Al Manassa report in 2024 said Abu Dhabi National Oil Company withdrew from talks to acquire Wataniya after ownership documentation proved insufficient.
As IMF scrutiny intensifies, analysts say Egypt’s options are narrowing: either the government uses the stock market to deliver visible privatization progress, or it risks further delays in meeting program benchmarks—testing both investor confidence and its standing with the fund.
