Egyptian Exchange is Completing its Reform Efforts to Improve the Stock Market Regulative Framework in 2019

The Egyptian Exchange (EGX) chairman Mohamed Farid said that EGX is working to complete its strategy to make a qualitative leap in the stock market framework from the value chain perspective through 3 axes, the demand axis, the supply axis and developing rules and the availability of new financial mechanisms and products to diversify the investment options for all of the investors’ categories. During the second day of the fifth CEO’s conference, Farid said that enhancing the supply axis is performed by encouraging new strong companies to list their shares in the stock exchange.

According to Farid, “We are working with all of the relevant parties to implement the mechanism of sale of borrowed securities “Short Selling” during the first quarter of next year 2019” expecting to issue a decision regulating the market maker activity within few days by EGX management. “We are working in coordination with the European Bank for Reconstruction and Development to develop and structure the SMEs market” to provide a real financing platform that will help small and medium businesses to grow and start, not just for exit, he said.

EGX Chairman mentioned that cooperation with the European Bank for Reconstruction and Development includes performing a comparative study of all of the successful markets in the SMEs field, expecting the study to be completed in the last half of next year. He stated that out of the value chain perspective, the demand side aims to raise the financial and investment awareness of the community to attract more investors at the local and international levels, which contributes to raise the pricing process efficiency for the listed securities.

As for the third axis, which includes the availability and activation of new rules, mechanisms and financial products to enhance liquidity and trading, such as increasing the number of shares allowed to be traded in the same session and reducing the trading time suspense through 2 stages to 15 minutes then to10 minutes now.

Farid pointed that the current trading rates are still within the good range between LE 1 and 1.2 billion per day, despite of the recent pitfalls of emerging market. He said that as a continuation of EGX efforts to raise the investment awareness, we are coordinating with the Ministry of Education to improve curriculums to familiarize students with the investment fundamentals.

EGX chairman mentioned that the coming period will witness the completion of the reform and development process to enhance trading and liquidity and to raise the Egyptian capital market efficiency and depth, primarily the mechanism of selling of borrowed securities, that would lead to a qualitative leap for the Egyptian securities market and alleviates the decline of the market.