FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2013
EGYPTIAN EXCHANGE
EGX supports the Egyptian economy
Dr. Mohamed Omran
Chairman
In defiance of all the challenges, EGX continued
its major role in supporting the Egyptian
economy through providing the required
financing for companies to expand, grow and
provide extra job opportunities. This year 9 new
companies were listed and 24 companies has
undergone capital increases with around LE 5
billion; four times higher than the previous year’s
capital increases.
In line with our institutional principals, aiming to
attain the ultimate market development within
the coming years, EGX released its new strategy
for the period 2013-2017. The strategy sets a
realistic ambitious plan to place EGX among the
leading Exchanges and consolidate its grounds
as an influential Emerging market aiding in the
economic development process.
The primary goal is to enhance the legislative
and regulatory infrastructure of the market.
Second comes the development of the trading
system, whilst increasing its efficiency. The
third goal is concerned with the augmentation
of the technological infrastructure. Fourth is
increasing promotional activities and awareness.
Finally, emphasizing EGX role in enhancing the
economic and social welfare while reinforcing its
international position.
On the other hand, EGX management continued
its efforts to enhance the trading environment,
increasing efficiency and effectiveness for
EXCHANGE BACKGROUND
The Egyptian Exchange (EGX) dates back
to more than 129 years. Alexandria Stock
Exchange was officially established in 1883,
followed by Cairo in 1903. The two exchanges
were very active as one of the oldest Future
Market dated 1940, ranked as the fifth
worldwide. Egyptian cotton was among other
commodities at that time.
Nevertheless, the socialist policies adopted in
the mid 1950 have led to a drastic reduction in
activity on the stock exchange, which remained
dormant during 1961 till 1992.
In an attempt to re-activate the market, the
government opted for the public offering
of the state owned enterprises through the
privatization program, which provided the
impetus for its revival.
In 1997, The Egyptian Exchange (formerly
known as Cairo & Alexandria Stock Exchange)
started its modernization program in terms of
legislation and infrastructure to keep abreast
with globalization and internationalization.
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all market participants. This year the market
witnessed several developments while ensuring
the smooth continuation of trading regardless
of the instability. Meanwhile, EGX is nearly
done with the ETFs file in cooperation with the
related parties arranging for its launch in the
market. Also, EGX concentrated on activating
the bond market in agreement with the ministry
of finance, central bank and the primary dealers
by allocating a ratio of the treasury bonds issued
to retail investors in order to be traded through
member firms. This will lead to a surge in the
bond market performance during the coming
period; likewise, EGX targets the development of
the OTC market through issuing regulations for
the unification and standardization of the orders
and deals operations. Accordingly, this solved
the problems in the operations carried out in
2013 while finalizing the pending operations
from previous years executing a large number
of them.
Moreover, EGX is currently directing its
promotional efforts to increase the use of the FIX
HUB which was launched it 2012 to attract more
foreign investments to the local market. The
global trading value using the FIX HUB amounts
to US$ 800 billion, in which Egypt is trying to
take a share of to increase its market liquidity
and minimize costs on all fronts.
Moreover, EGX has given priority to enhancing
the disclosure and transparency standards for
the listed companies. A new layout for a monthly
disclosure report has been published requiring
listed companies to provide information about
the stocks on a monthly basis. This aims to
improve the quality of information provided
to the investors. On the other hand EGX
launched the new version of its website on the
internet providing investors with real time data.
In addition to revamping the dissemination
of material events on the website to match
its disclosure timing on the trading screens
to ensure timely access to news among all
investors.
Worth mentioning, year 2013 is considered
the golden year for Nilex achieving an
unprecedented performance during the year.
Trading volumes more than doubled, and
trading values surged to around LE 748 million.
Moreover, 5 new companies have been listed
on Nilex this year from different sectors raising
the total number of listed companies to 24
companies. Also, this year witnessed the IPO
of 2 companies with coverage ratios between
55 times and 67 times. This reflects the liquidity
available for investment in companies listed on
NILEX.
Finally, it’s worth highlighting that more than
1200 new institution (75% foreign institutions)
entered the market for the first time in 2013, a
result of EGX ongoing promotional effort.
Stocks, bonds and funds are traded on EGX.
In addition to a number of structured products,
issued by several international financial
institutions, on the Exchange in-house designed
index, EGX 30 Index, are listed and traded on
various European Exchanges such as EGX
30 Certificates Issuance by The Royal Bank of
Scotland (RBS), EGX 30 EUR X-Pert Certificates
Issuance by Deutsche Bank, and EGX 30 Open
End Certificates Issuance by Goldman Sachs
International. Egyptian Financial Supervisory Authority (EFSA)
that is a single regulatory body governing all
non banking financial services.
The Exchange continued the journey of
expanding its services and products by
launching, NILEX. On the international front, EGX has signed
a number of Memoranda of Understanding
with various Exchanges as it continues to
develop partnerships with regional and global
exchanges. The mutual cooperation and sharing
of information serve to enrich the strategic
planning of the different exchanges whether on
the international, regional or individual fronts.
In this respect, EGX is sparing no efforts to
strengthen its position on the international
capital market map through enhancing its
relations with other stock exchanges as well as
federations and associations belonging to the
exchange industry.
The first SME Market in MENA region.
EGX has developed a number of indices
which help the investors track the market’s
performance. EGX 20 Capped, EGX 30,
EGX70, EGX100, Dow Jones EGX Egypt
Titans 20 INDEX, and S&P/EGX ESG Index
which is the first corporate governance and
social responsibility index in the MENA region
in collaboration with the Egyptian Institute of
Directors and Standard &Poor’s. The Egyptian
Exchange is governed and regulated by the
EGX do not impose any restrictions on foreign
investment or profit repatriation in the Egyptian
securities market.
No taxes are levied on dividends, capital gain
and interest on bonds for individuals, mutual
funds and international funds.