Emaar Misr to Buy Shares as Price Drops Following Egypt IPO

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Emaar Misr for Development SAE, which started trading on Sunday, has offered to buy back 90 million shares through a fund as the stock plummeted on its second trading day, according to the state-run MENA news agency.

MENA reported the planned purchase without identifying the fund or the stock exchange official it cited. The shares were suspended from trading for about 30 minutes after plunging 14 percent. Emaar Misr closed down 9.9 percent at 3.55 pounds in Cairo.

“This process takes place through the stabilization fund, it happens in all IPOs,” Ahmed El Guindy, head of investment banking at EFG-Hermes which was a bookrunner for the IPO, said by phone in Cairo. Wafik Dawood, a portfolio manager at Compass Capital, described the buyback as an “automatic process” that aims at ensuring share price stability.

Emaar Misr, Egypt’s second-biggest publicly-traded real estate developer, has declined 6.6 percent since its debut after raising 2.28 billion Egyptian pounds ($291 million) in the nation’s biggest initial public offering this year.

The company is a unit of Emaar Properties PJSC, Dubai’s biggest property developer. Emaar’s public relations department didn’t immediately respond to e-mailed questions.

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