Egyptian Exchange

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The Egyptian Exchange
EgyptianExchange.jpg
Founded 1992 (1883 as Alexandria Stock Exchange)
Headquarters Cairo, Egypt and Alexandria, Egypt
Key People Maged Shawky, Chairman
Products EGX 30 index and EGX 70 Price Index
Website www.egyptse.com

The modern-day, state-owned Egyptian Exchange (EGX) was formed by law in 1992, thirty-one years after the demise of its privately-owned predecessor, the Cairo and Alexandria Stock Exchanges (CASE). The Egyptian Exchange has expanded its trading volume and market value significantly over the past few years but recently put plans to launch a derivatives-market on hold for two years in the wake of the global financial crisis.

Background

The EGX began in its most recent form following passage in 1992 of the Capital Market Law No.95, the regulatory statute for Egypt's future capital markets regulation. It began trading officially in 1996 when the Egyptian government launched an initial public offering (IPO) for 75% of the shares in a state property company.[1] The following year the government-owned EGX laid the foundations for its future growth with the election of a new board of directors and the formation of board committees aimed at modernising the exchange.[2] Eleven years later, in 2008, EGX was named most innovative African exchange by the annual NYSE Euronext/Ai summit.

The Egyptian Exchange has posted impressive trading results from 2005 to 2008, with total volume increasing by a factor of more than five over the period.[3] Total number of transactions also rose over the period from 4.2 million to 13.5 million while average monthly traded value grew from 13.3 billion Egyptian pounds to 44.1 billion. The EGX set a new mark for daily transactions on April 5, 2009, notching 106,613 valued at 1.8 billion Egyptian pounds on volume of 301 million, securities[4] but the market's benchmark EGX 30 and EGX 70 index (see below) both dropped significantly in the year to June 2009, falling 42% and 44% respectively.[5]

Key products

The recently re-named EGX 30 index (formerly CASE 30 index) is the Egyptian Exchange's main benchmark for the Egyptian stock market and includes the market's top 30 companies by liquidity and activity on the exchange, weighted for market capitalization, which must have at least 15% of their shares freely floating.[6] It was launched in 1998 at a base value of 1,000 and began broad dissemination to outside investors in 2003.

The EGX 70 Price Index was launched by the Egyptian Exchange in March 2009 and includes the next 70 companies, also measured by liquidity and trading activity, below the leading EGX 30 stocks.[7] Adding listed corporations to the new index is not dependent on freely floating shares, is unweighted by market capitalization and is reviewed twice annually.

Key people

EGX Chairman Maged Shawky is also Chairman of the African Securities Exchanges Association and a board member of the World Federation of Exchanges (WFE) and was previously an advisor on capital markets to the Egyptian Minister of Economy and Foreign Trade.[8] He is a graduate of Egypt's Helwan University ands also earned a master's degree in financial economics from Queen Mary University in London.

Latest news

The Egyptian Exchange announced in early July 2009 that it had postponed plans to launch Egypt's first-ever derivatives exchange from the end of 2009 until 2011 because of a decline in world derivates trading volume, said EGX Deputy Chairman Mohamed Ommran.[9] He said the EGX still planned to kick off its planned new exchange by listing futures contracts on the EGX 30 index, with options and swaps to come later.

References

  1. Milestones. The Egyptian Exchange.
  2. Egyptian Exchange Overview. MBendi.com.
  3. Main market indicators. The Egyptian Exchange.
  4. EGX Breaks New Records. The Egyptian Exchange.
  5. The Egyptian Exchange (EGX) Monthly Statistical Report June 2009. Mondovisione.com.
  6. EGX 30 index - overview. The Egyptian Exchange.
  7. EGX 70 Price Index. The Egyptian Exchange.
  8. Board of Directors. The Egyptian Exchange.
  9. Egypt aims for derivatives exchange in 2011. Reuters.