FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2012
EGYPTIAN EXCHANGE
have taken place to modify the trading system in
NILEX to match that of the main market in order
to achieve higher liquidity. Moreover, special
techniques have been put forth to calculate
the closing price and ensure the safety of the
transactions. Worth mentioning, the modified
trading system helped in securing NILEX from
the decline in liquidity witnessed in the main
market.
The rules stated that the file of the Nominated
Sponsors should be transferred from EFSA to
EGX management to guarantee activating their
role.
Despite the internal crisis, NILEX succeeded
in increasing the number of companies listed
in the market, by almost one third, to reach 20
companies.
In line with the Egyptian Exchange belief in
the importance of helping companies to raise
their capital during the critical phase, EGX
formed a team to attract new companies to
list in the exchange. In addition, The Egyptian
Exchange (EGX) and The General Authority for
Investment (GAFI) signed a Memorandum of
Understanding for mutual cooperation aiming
to attract new SMEs to list on NILEX. Worth
mentioning, GAFI has an ample database for
potential companies which will help EGX in
attracting more companies to list in NILEX.
On the international front, EGX management
has undertaken several promotional campaigns
abroad post the revolution to restore confidence
in the Egyptian market. The promotional
campaigns aimed at the Gulf region, Europe
and the United states, with dozens of interested
foreign institutions participating.
Worth mentioning, the promotional campaigns
largely contributed to improving the image of
the Egyptian Economy.
Moreover, EGX invited a number of public
figures and representatives of various
institutions for the opening of trading sessions,
to draw the attention of the society to the
Egyptian Exchange and its importance for the
economic well being.
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Launching New Indices as well as including
Egypt in Regional Indices
Meanwhile, to enhance access to information,
EGX launched a new index, EGX 20 Capped
index, designed to capture the performance
of the most active 20 companies in terms of
market capitalization and liquidity, capping the
weight of any constituent to a maximum of 10%.
Egypt also joined the Dow Jones FEAS Titans
50 Equal Weighted Index designed to serve as
the basis for financial products such as funds
and structured products.
Continuous Educational Awareness Efforts
In light of the critical situation which calls
for unity and concerted efforts to help the
capital market overcome the crisis, EGX has
launched several national campaigns to attract
more investments and promoted the funds
investment’s awareness campaign.
Moreover, EGX visited many universities
nationwide in an attempt to help students better
understand stock exchange investment basics
and launched a new stock market simulation
targeting secondary school students and visiting
nearly 90 schools nationwide.
Consequently, the market conditions the
number of coded investors in the Egyptian
market increased by around 36 thousand new
investor vs. around 35 thousand new investor
in 2010.
Market Looks Forward to Passing the
Transition Period
During the first round of the parliamentary
elections the market witnessed a strong rise in
the indices performance. EGX 30 index soared
by 11%, EGX 70 and EGX 100 increased by
19% and 15%, respectively, with relatively
high trading volumes during that period. This
indicates that investors are yearning for political
stability to return to the market, which reflects
the strength of the listed companies.
Moreover, the volume traded recorded 18.5
billion securities in 2011 compared to 33 billion
securities in 2010. Likewise, the number of
transactions recorded 5.6 million transactions
versus 10 million in 2010. The market
capitalization concluded the year at LE 294
billion as opposed to LE 488 billion at the end
of 2010, with a decline of 40% and representing
21% of GDP.
Moreover, the bond market witnessed a huge
drop in trading activity during 2011 as opposed
to the previous year, due to the political climate,
in addition to the downgrading of Egypt’s
government bonds four times during the year to
reach B2.
The value of bonds traded reached LE 31 billion
in comparison to LE 63 billion the previous
year. Likewise, the volume of bonds traded fell
recording 35 million bonds, versus 66 million
bonds in 2010.
Treasury Bonds issued through the Primary
Dealers System still account for the lion’s share
of the total bond activity, making up 99% of the
total bonds value and 86% of the bonds’ total
volume traded during the year.
Similarly, corporate bonds witnessed a decline
in their trading activity in 2011, with their value
traded registering LE 227 million, down from LE
562 million last year. Meanwhile, their volume
traded reached 1.7 million bonds versus 5.5
million bonds for the previous year.