FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2009
EGYPTIAN EXCHANGE
Maged Shawky Sourial
Chairman
The Egyptian market witnessed mixed
performance during the year 2008 showing
lower aggregates since the month of May, to
conclude the year with a loss in CASE 30 index
of about 56%, after experiencing an upsurge
during the first four months of the year with the
CASE30 index approaching for the first time
12000 points.
The down trend of the Egyptian market started
in May on the back of the rumor of imposing
taxes on the exchange’s transactions forcing
the market to decline by 30% in few weeks.
This decline was further aggravated by the hit
of the global crisis that had begun by mid-
September.
HISTORY AND DEVELOPMENT
The Egyptian Stock Exchange is comprised of
two exchanges: the Cairo and the Alexandria
Stock Exchanges, which are under the name of
The Egyptian Exchange and are managed by
the same Chairman and Board of Directors.
They share the same trading, clearing and
settlement systems. The Alexandria Stock
Exchange was officially established in 1888
followed by Cairo in 1903 with 97 listed
companies. The two Exchanges passed
through three transitional periods, when they
were outperforming throughout the 1940s and
1950s, followed by the socialist regime and the
nationalization policy in the early 1960s, then in
1991, Egypt’s new era of economic reform
started. Thus, by 1992, the role of Cairo and
Alexandria Stock Exchanges was re-activated,
having 656 listed companies on the trading
system. A number of Initial Public Offerings
(IPOs) of the state-owned companies were
executed under the umbrella of the privatization
program that had started in the same year
leading to another push in the revival of the
Egyptian Stock Market. Starting 1997, the
importance of the Stock Exchange was assured
as a proper regulated platform for companies
to raise capital and for investors to share in
companies.
During 2008, the Egyptian market has
witnessed a mixed performance, experiencing
an upsurge during the first four months of the
year, with CASE 30 index recording the highest-
ever since its inception, approaching the 12000
threshold, with an increase of 11.7% over this
period. Nevertheless, the Egyptian market,
showed a lackluster performance since the
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The market, however, managed to register
impressive trading figures during 2008,
whereby the value traded exceeded US$ 96
billion compared to US$ 65 billion during
2007.
The market, however, managed to register
impressive trading figures during 2008,
whereby the value traded exceeded US$ 96
billion compared to US$ 65 billion during 2007,
and the turnover ratio doubled to record about
70%, while the average daily trading value
increased by 15%.
Despite the uncertainty prevailing in the capital
markets as a result of the financial crisis, EGX
clearly emphasized that the crisis will not hold
its development plans and that it will save no
efforts in continuing the implementation of the
organizational development program initiated
in 2004.
On the other hand, our listed companies were
not adversely affected by the financial crisis,
with 90% recording profits during the third
quarter of 2008, out of which 20% managed to
double their profits, pushing the PE ratio of the
Egyptian Exchange to be ranked as one of the
best worldwide.
month of May, affected by the sharp decline in
the global markets.
Continuing the Egyptian Exchange efforts to
enhance the market activity and liquidity, it has
removed the price limits on 182 companies,
which account for 90% of the total value traded.
Additionally, EGX took effective steps to
prepare for the implementation of the Short
Selling system and MCDR started to accept
requests from investors who wish to lend their
shares, to be ready with the Pool of securities
to be lent. Moreover, EGX has chosen, the
company “Beltone Financial” that will launch its
first ETF on CASE 30 Index while the French
BNP Paribas Bank, has launched the first ETF
on the DJ CASE Egypt Index which will be
offering the fund’s certificates on Euronext-Paris
and to be traded in Euros.
Federation of Exchanges (WFE) Board of
Directors, which came after the WFE holding its
sixth Developing Markets Forum in Cairo,
Egypt, during February 2008. On the regional
front, the Egyptian Exchange won the award of
the most innovative African Exchange during
the annual Summit organized by Africa Investor
(Ai) in collaboration with NYSE Euronext.
Worth mentioning that EGX signed a
Memorandum of Understanding with Cyprus
Stock Exchange, regarding the mutual
cooperation on capital markets’ developments.
These developments are expected to promote
the activity of the Egyptian market, which has
been perceived as one of the most developed
emerging markets during the past years.
FUTURE OUTLOOK
From another perspective, new listing rules
were also finalized including a separate chapter
about corporate governance for listed
companies as well as for non-listed brokerage
firms, aiming at enhancing their efficiency and
lowering the trading risk.
In its endeavor to keep abreast with
technological advancements in order to be the
Premier market in the Middle East North African
(MENA) Region that best serves its
stakeholders, the Egyptian Exchange has
launched, on 27 November 2008, the new
trading system "X-Stream"; one of the most
reputable developed systems operating in
numerous international markets.
On the international front, the Chairman of EGX,
was elected as a member of the World
• Continuous development of the regulatory
infrastructure to increase the quality of services
and to ensure investor protection.
• EGX, in collaboration with MCDR, will shortly
implement the Securities Lending and
Borrowing System.
• The launch of the first ETF on CASE 30 index.
• The effective launch of new markets, such as
markets for Derivatives.
• Encouraging dual listing of blue chip
companies.
• Listing selected prominent and fast growing
mid and small cap companies on Nilex.
• Continuous enhancement of EGX
international relations with stock exchanges
around the globe as well as regional and
international federations and associations
working in the exchange industry.