The wave of share buybacks on the EGX is evolving. Once a simple signal that management viewed its shares as undervalued, treasury stock has emerged as a complex strategic lever used to optimize tax exposure, manage exits, and go private, Al Ahly Pharos Research Head Hany Genena tells EnterpriseAM. Buybacks can also be used as a tool to fight-off activist investors.

The trend: Activity clustered heavily in late 2025, with EFG Holding canceling 23.7 mn shares, Madinet Masr targeting up to 4% of its own shares, and GFH purchasing 9.95 mn shares (pdf). Ezz Steel completed a buyback from minority shareholders ahead of its voluntary delisting, purchasing 163.8 mn shares, equal to 30.2% of issued capital and 88% of its float.

SOUND SMART- A share buyback is when a company uses its own funds to purchase its shares from the stock market, reducing the number of shares in circulation. This often boosts earnings per share (EPS) and can support the share price, since earnings are spread across fewer, less-available shares.

Why it matters: The five strategic drivers

#1- The one-off reward: Buybacks also avoid the market expectation that a payout will be repeated next year. For many EGX firms, buybacks remain the preferred method of returning capital without creating long-term expectations or liabilities.

#2- The tax arbitrage: In a high-inflation environment, buybacks beat dividends on efficiency. “Dividends face a 10% withholding tax,” Genena said, noting that “selling into a buyback is subject only to stamp duty.”

#3- The floor for fund managers: With large institutional investors needing to mark holdings to market, management teams are stepping in to support the share price. Genena points to Edita, where a buyback program supported liquidity ahead of Kingsway’s exit. Kingsway’s final exit from Edita came last fall.

#4- The synthetic capital gain: Companies like Raya Contact Center have accumulated shares ahead of corporate actions to book capital gains directly to equity, Genena said, noting that even if the triggering transaction stalls (as Raya’s did), the company retains the flexibility to resell the shares for a gain.

#5- The boardroom defense: Companies can use buybacks to shrink their freefloat as a “preemptive measure” against activist entry, Genena says. Companies can use buybacks to shrink the free float as a preemptive measure against activist entry — fewer shares trading means it’s harder and more expensive for an outsider to accumulate the 10% stake required to demand a board seat. Ongoing friction between Juhayna’s owners and Qatari shareholder Baladna highlight the stakes involved when it comes to ownership thresholds.

What’s next

Expect a wave of capital reductions in 2026. Egyptian law caps treasury holdings at 10% and requires shares to be re-issued or canceled within one year. With the heavy buying activity in late 2025, you should expect a corresponding cycle of share cancellations and capital reductions over the next 12 months.

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