ANNUAL REPORT JUNE 2010
FEDERATION OF EURO-ASIAN STOCK EXCHANGES
EGYPTIAN EXCHANGE
Despite the decrease in the number of
listed companies, the total market
capitalization reached LE 500 billion this
year, surging by 5%.
Maged Shawky Sourial
Chairman
Despite the repercussions of the global financial
crisis, the Egyptian market has shown a good
performance during 2009. The year has started,
though, on a negative note till February, where
EGX 30 Index touched one of its lowest levels over
the past four years, however it bounced back by
83% from its lowest point in year 2009 to conclude
the year with an annual increase of 35%.
EGX has also been able to achieve good trading
records in 2009, with a total trading value of LE
448 billion compared to LE 530 billion in the
previous year. Meanwhile, the volume traded
soared to 37 billion securities in 2009 surging by
43% compared to last year. Likewise, the number
of transactions recorded 15 million transactions
this year versus 13.5 million in 2008.
The number of listed companies continued to
decrease, reaching 306 companies at the end of
2009, down from 373 at the end of 2008, owing to
EGX effective policy in enforcing listing, disclosure
and corporate governance rules on issuers. The
percentage of the total number of traded
companies to listed companies reached 94% in
2009, up from 86% in the previous year. Despite
the decrease in the number of listed companies,
the total market capitalization reached LE 500
HISTORY AND DEVELOPMENT
The Egyptian Exchange (EGX), formerly Cairo &
Alexandria Stock Exchanges (CASE), dates back to
more than 125 years. Operating through two
locations, the Alexandria Stock Exchange was
officially established in 1883, followed by Cairo
Stock Exchange in 1903. In 1997, the Presidential
Decree No. 51/1997, re-defined the legal structure
of the Exchanges and since then both Exchanges
were managed by one Chairman and the same
Board of Directors. The two exchanges were very
active in the 1940s to the extent that they ranked
fifth among the world exchanges. The socialist
regime and the nationalization policy in the early
1960s have put both CASE on hold, then in 1991,
Egypt’s new era of economic reform started. Thus,
by 1992, the role of CASE was re-activated, having
656 listed companies on the trading system.
Despite the repercussions of the global financial
crisis, the Egyptian market has shown a good
performance during 2009 with its main index EGX
30 concluding the year with an annual increase of
35%. On the other hand, EGX has been able to
achieve good trading records in 2009, with a total
trading value of LE 448 billion compared to LE 530
billion in the previous year. However, the volume
traded soared to 37 billion securities in 2009
compared to 26 billion securities in 2008, surging
by 43% compared to last year. Likewise, the
number of transactions recorded 15 million
transactions this year versus 13.5 million in 2008.
In its efforts to continue the enhancement of the
market activity and transparency, EGX launched 2
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billion this year, surging by 5% compared to the
last year, representing 48% of GDP.
Moreover, EGX continued its efforts to increase the
transparency available in the market. In that
respect, EGX launched 2 new price indices; EGX
70 Price Index, that measures the performance of
the 70 active companies, after excluding the 30
most active constituent-companies of EGX 30
Index, as well as EGX 100 Price Index, that tracks
the performance of the 100 active companies,
including both the 30 constituent-companies of
EGX 30 Index and the 70 constituent-companies
of EGX 70 Index. Both indices, EGX 70 index and
EGX 100, soared during 2009 to conclude the
year with an increase of 33% and 36%,
respectively.
Additionally, EGX launched a new version of its
website; www.egx.com.eg, that includes a wealth
of information about EGX indices, issuer
information, market data, education corner,
international relations and information services,
with a better navigation, more user-friendly
interface and easier access to information.
With regards to NILEX, the mid and small cap
market in the EGX, thirteen financial institutions
new price indices; EGX 70 Price Index, that
measures the performance of the 70 active
companies, after excluding the 30 most active
constituent-companies of EGX 30 Index, as well as
EGX 100 Price Index, that tracks the performance
of the 100 active companies, including both the 30
constituent-companies of EGX 30 Index and the 70
constituent-companies of EGX 70 Index. Both
indices, EGX 70 index and EGX 100, soared during
2009 to conclude the year with an increase of 33%
and 36%, respectively.
From another perspective, the Listing and De-
listing Rules were amended to ensure further
enforcement of corporate governance and to retain
and attract quality issuers as well as regulating the
trading of EDRs and ETFs.
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, EGX signed an
agreement with London SE to connect the 2
markets via FIX connectivity system. This will
facilitate capital flow from London to Egypt and
vice versa and set EGX as the hub in the Middle
East and African region.
Additionally, EGX launched a new version of its
website; www.egx.com.eg, that includes a wealth
of information about EGX indices, issuer
information, market data, education corner,
international relations and information services,
with a better navigation, more user-friendly
interface and easier access to information.
were granted the license to be nominated advisors
during 2009, raising the number of nominated
advisors in NILEX, to 23 financial institutions,
which reflects the interest of many financial
institutions in the small and medium enterprises.
Four companies, operating in different sectors,
have got listed on NILEX to conclude 2009 with
seven listed companies.
On the international front, EGX is eager to
strengthen and maintain strong relations with the
regional and international exchanges and
associations. During 2009, EGX signed
memoranda of Understanding with several
Exchanges, namely; Casablanca SE, Shenzhen
SE, Amman SE, Libyan Stock Market and the Iraqi
SE. The MoUs tackled the areas of mutual
cooperation on capital markets' developments
including exchange of information, experts, staff
and experiences for the respective benefit of the
securities markets.
With these developments in the market, I trust that
EGX is on the right path to achieve its vision of
being a World-Class Egypt-based Exchange: the
Premier Capital Market in the Middle East & North
Africa Region.
On the international front, EGX has signed during
2009 memoranda of Understanding with several
Exchanges, namely; Casablanca SE, Shenzhen
SE, Amman SE, Libyan Stock Market and the Iraqi
SE. The MoUs tackled the areas of mutual
cooperation on capital markets' developments
including exchange of information, experts, staff
and experiences for the respective benefit of the
securities markets.
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
• Continuous development of the regulatory
infrastructure to increase the quality of services
and ensure investor protection.
• Increasing the product mix available to investors
by listing and trading ETFs, Sukuks and later
derivatives, etc.
• Encouraging dual listing of blue chip companies
and more investment flows to the market. EGX
plans for three road shows covering the US, Far
East and the MENA regions.
• 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.