Egyptian Exchange discusses securities industry development

Bidding unit was market demand to increase turnover of small securities, says EGX chairperson

Chairperson of the Egyptian Exchange (EGX), Mohamed Farid, on Sunday met with representatives of major players in the securities industry; Egyptian Capital Market Association (ECMA), Egyptian Private Equity Association (EPEA), Securities Division in Egyptian Federation of Chambers of Commerce (FEDCOC), and several investors in the stock market, to discuss their views and proposals for the market development.
Farid reviewed several decisions taken by the EGX to activate trading, including reducing the trading time twice and expanding the securities trading base under the T+0 mechanism, listing shares of new IPOs among the lists of specialised activities upon completion of the required procedures, and activating new financial tools, including market maker and short selling.
He pointed out that the activation of the new financial mechanisms and products lies with the brokerage companies operating to apply for a license to practice the activity, especially after issuing all the decisions that organise and allow to carry out these activities.
Farid stressed that the bidding unit was a market demand that was implemented after consultations with all parties as well as conducting a practical comparative study to identify the experiences of various markets, and it was implemented with the aim of increasing the turnover and movement of small securities, but we are open to any amendments that will develop the trading process If feasible for the market.
As for the offering side, the EGX head said: “Our primary objective is to improve all offerings through raising the efficiency, quality, and adequacy of disclosures. We have 55 companies disclosing in Arabic and English and established a management of the accounting analysis of the financial statements of companies from the viewpoint of enhancing disclosures to ensure that sufficient information is available to the investors.”
In addition, the EGX established a client relation management to educate the companies in various economic sectors with the advantages and procedures of listing on the EGX, where it has already addressed over 150 companies, noting that this is a role of investment banks, but they are helping to improve the market.
A number of investors called to increase the number of shares available for specialized activities and margin buying, along with slowing down the entry and exit of these shares.
The EGX head promised to study and examine the possibility of developing the process of listing and deletion of securities in the lists of specialized activities so as not to hurt an investor and contribute to the activation of trading.
For their part, the meeting attendants called on the government to quickly integrate the stock market into the economy and economic development plans as an important mechanism for attracting and mobilizing more foreign and domestic investments, as a platform to finance the growth and expansion of state-owned enterprises.
Farid stressed that this proposal is of interest to the EGX and there is a tripartite committee including the Finance Ministry, the Egyptian Tax Authority, and a representative of the securities industry to discuss possible measures and decisions that will contribute to the stimulation of the EGX. He indicated his willingness to work with all parties to determine the requirements for revitalising the market.