HASI-HASHram Weekly : What are your plans to offer new financial securities to investors via the introduction of new public and private companies on the stock market in 2023?
Rami El-Dokany: According to the government’s IPO program, 4 public companies were listed last year and are ready for issuance to investors. Three companies are in the transport and software sectors, while the fourth is in the agricultural improvement sector. Our plan also includes the private sector by examining sectors not represented on the stock market, such as tourism, technology and renewable energy. We are holding meetings with private sector companies operating in these sectors to encourage them to list on the stock exchange during the next period, in order to make their representation more meaningful.
— What new financial products will be launched this year? ?
— The Bourse intends to activate the financial derivatives market this year (a derivative is a financial instrument that takes the form of a contract concluded between two parties. This contract defines a future financial exchange that depends on the price of an asset) . We will start with the launch of futures contracts and options on the EGX30 and EGX70 indices. The study on the creation of this market has already been completed and the Stock Exchange is currently in the phase of coordination with the Financial Supervisory Authority to soon create a company specializing in the settlement of exchange transactions for these new products. The Exchange is currently holding discussions with investors and financial institutions so that they participate in the creation of this new entity, the aim being to begin the exchange of these products during the second half of the current year.
— What are the countries to visit as part of the promotion campaign of the Egyptian Stock Exchange in 2023 ?
— We will begin our promotional campaign with a visit to Saudi Arabia next month. Likewise, there will be a second visit to the United Arab Emirates. Our first visit took place from October 18 to 21, during which we met 16 of the major Arab investors and investment funds, as well as the heads of 4 international institutions. The objective of our meetings with them was to explore their opinions regarding the obstacles facing investment in the financial market. According to them, the lack of issuance of large companies on the stock exchange and the fluctuation of the value of foreign currencies remained the main obstacles. During the current year, we will continue our discussions with Arab and foreign funds by organizing quarterly conference calls to find out about their needs and problems with a view to solving them.
— What are the incentives to be presented by the Stock Exchange in order to attract new investors?
— People are waiting for the Stock Exchange to introduce tax incentives, but that is not the responsibility of the administration of the Stock Exchange. We are still discussing this file with the decision-makers by presenting them with our recommendations on this important file. However, the investor in the last period sees that the value of his funds decreases, because he does not put his money in a good investment. This is why we see more money flowing into the Egyptian Stock Exchange. The year 2022 saw a significant increase in the number of individual investors of approximately 117,000 shareholders, an increase of 202% compared to the previous year. What is truly remarkable is the significant increase in young investors in the 16 to 40 age bracket. They showed great interest in investing in the stock market. This trend will continue in the next period. The biggest challenge will be to strengthen the confidence of foreign investors so that they return in force to the financial market again. The success of the government in solving the problem of the foreign exchange market will lead to their return to the financial market.
— The administration of the Stock Exchange had held meetings with government institutions to increase their participation in the financial market. What are the results of these meetings?
— The volume of funds invested by government institutions has increased as a direct result of the continuous meetings held by the administration of the Bourse. Last year, the participation of these institutions in total equity trading increased to 47% from 32% in 2021, representing a total value of LE 22.7 billion in 2022 from LE 4.4 billion in 2021. We hopefully these numbers will increase in the next period. We will offer new products compatible with the nature of these institutions. For example, the short sale product (short-selling), once restructured, will suit many institutions that wish to retain their shares.
The Exchange seeks to attract private companies from the tourism, technology and renewable energy sectors. (Photo: Reuters)
— What is the Stock Exchange’s plan to issue new indices in 2023?
— As part of the stock market strategy of offering products compatible with market needs, a study is underway to eliminate certain indices and restructure others. In order to give a faithful image of the market, the Stock Exchange is currently studying the creation of a new index compatible with Islamic law. The aim is to meet the demands of investors and investment funds wishing to invest in financial instruments compatible with Sharia.
— How do you assess the performance of the stock market over the past year, which was very difficult for the Egyptian economy?
— Last year, the Egyptian Stock Exchange went through two phases: the first was characterized by a severe recession during which the EGX30 stock market index fell by 32% during the first half of the year. The second phase, which began in the second half of the year, was marked by a strong performance during which the stock market index increased by 69%, from 8,600 points in July to 14,500 points on December 29. The stock market’s growth rate was the highest in the Arab world, as the EGX30 index rose 22.2% for the full year.
Similarly, the Egyptian Stock Exchange came in third place in 2022 after those of Saudi Arabia and Abu Dhabi, with a total of exchanges of 59 billion dollars. In terms of daily trade value, the amount has increased over the past three months to LE 3 billion from LE 500,000 previously. We are really optimistic that this upward trend will continue during this year.
— What about issuing carbon certificates?
— We are working with Western countries and African countries to complete the listing of carbon certificates. We will be in an advanced position compared to our neighboring markets. The administration of the Exchange aims for Egypt to become the main hub for trading carbon certificates in Africa, with the aim of helping companies reduce their emissions and directly issue carbon certificates for projects. . It is expected that the exchange of these certificates will take place during the fourth quarter of the year.
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Rami El-Dokany: We are aiming for the strong comeback of foreign investors – Economy – Economy
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