- Farid: The stock exchange is a long-term saving and investment vehicle that creates sustainable economic growth
- Adel: We work to strengthen communication with business associations to enhance the role of the stock exchange as a financing platform
As a step forward towards the continuous efforts to raise the awareness about the role of the stock exchange in funding the companies, Mr. Mohamed Farid, EGX Chairman and Mr. Mohsen Adel, EGX Vice Chairman met with the members of the Egyptian Businessmen Association (EBA), Banks and Stock Exchanges Committees. The association is chaired by Mr. Hassan Hussein; meanwhile, Eng. Ali Issa, Chairman of the association and several members of the association participated in the workshop.
EGX Chairman said that the stock exchange has an integrated vision to deepen the capital market and to increase trading volumes; this is being implemented through reforms at each stage, which include raising the efficiency and quality of all procedures, mechanisms and rules governing the market.
Farid mentioned that well-performing financially and administratively companies that desire to expand and grow are being sought to list on the stock market. Meanwhile, EGX work on improving the efficiency and quality of the disclosure of the listed companies, thereby increasing the available valuable stocks at various sectors.
Moreover, there will lead to diversification of investment choices for all investors’ categories through allowing and activating more instrument and financial tools and products in order to increase trading volumes. This should increase the efficiency of the valuation of traded securities.
EGX Chairman also pointed out that the bold economic reforms the country witnessed as well as the developments in the stock exchange resulted in an upsurge in the foreigners’ net purchases of to record between EGP13 to EGP14 billion since the reform in November 2017 up to current, compared to about EGP 700 million before that date. This reflects the growing confidence of the foreign investors in the Egyptian economy future. He added that 2017 witnessed 6 new IPOs in various economic sectors, concluding about EGP3 billion, of which 65% foreigners participation.
He added, trading value significantly soared to reach between EGP1 billion to EGP1.5 billion in a session compared to EGP600 million before the reforms. “This should result in efficient and disciplined stock valuation”. He also highlighted that decreasing the time for the suspension of trading was the decision of EGX Board that was approved by Financial Regulatory Authority (FRA).
EGX Chairman affirmed that Egypt is currently witnessing macroeconomic stability due to the recent reforms, he also pointed out that the stock exchange is a long-term saving and investment tool, as well as its role as a financing platform.
Farid called on the association members to promote for the advantages of listing on EGX and to explain how family business can benefit from listing and applying the governance standards; thereby, this enhances the capacity of these companies to achieve sustainable growth.
In addition to introducing these companies’ employees to the EGX available financial instruments for trading and saving.
EGX Chairman also presented the mechanism the rights issue of the companies that are not listed. This mechanism enables the companies that are not listed to benefit from the market as a platform for financing and to expand the ownership base, without incurring the costs of listing and IPO procedures.
For his side, Mr. Mohsen Adel, EGX Vice Chairman, said that we should highlight the role of the stock exchange as a financing platform as well as its role as an investment platform. Moreover, we should promote for the financial mechanisms and instruments provided to the companies that are not listed such the rights issue. He also pointed out that the management seeks to cooperate with the EBA to organize more periodical workshops and specialized courses.
From another perspective, Mr. Ali Issa, EBA Chairman, said that the stock exchange is an important platform for financing and investment, which all companies should benefit from, to diversify their sources for financing. He also stressed that achieving economic growth requires financing; the stock exchange is capable of financing this growth, while strengthening corporate governance to contribute to sustainable economic growth.
Hassan Hossein, head of the banks and stock exchanges committee, said that EGX improved performance reflects an optimistic future outlook for investors regarding the performance of the economy; he also praised EGX performance in adopting development plans that enhances the role of the capital market as an important platform for financing and savings.