Egyptian Exchange (EGX) Vice Chairperson Mohsen Adel said that the EGX is currently developing new mechanisms and tools to encourage companies to launch initial public offerings (IPOs).
“The EGX is the main mechanism for investment which puts more responsibility on us to develop new products inside the EGX to attract more companies and develop the financial resources for these listed companies,” added Adel at the opening of Hapi Investment Conference on Sunday.
“We seek to build the capacities of employees through organising trainings for them in other countries to learn more about the tools used in the most sophisticated stock markets,” noted Adel.
Adel said that only 252 companies are listed on the Egyptian Exchange, noting that the number of listed companies is only 2.5% of all Egyptian companies, which is very low compared to other countries.
He added that the stability in exchange rate of the Egyptian pound and the government reform programme are very important for the recent boom in the EGX.
He denied that only two companies only were listed on the EGX since October. However, the EGX was promoted recently via new IPOs by some major companies from both the private and public sectors.
Khaled Al Nashar, deputy chairperson of Egypt’s Financial Regulatory Authority (FRA), said that the Egyptian market witnessed many reform procedures in the past four years, including the pound’s flotation and implementing a value added tax, adding that the new measures positively affected many economic sectors.
Al Nashar noted that the CBE directives of pulling down interest rates recover the Egyptian market’s confidence, saying, “we know our problems well and we are implementing a strategy of developing the non-banking financial sector.”
The strategy includes many important pillars, such as developing infrastructure, emphasising companies’ good governance, financial inclusion, and access to finance, added Al Nashar, noting that there are many updates in terms of financial market regulations.
“There are 800 microfinance associations, and we hope to double that number,” said Al Nashar, noting that the economic committee of parliament is scheduled to end discussions on a draft factoring law in a few days.
Mohamed Hassona, first undersecretary at the Public Sector Affairs Ministry, said that his ministry focuses on benefiting the unutilised state-owned assets plan, noting government-owned lands are the main pillar of plan.
Hassona added that his ministry encourages its companies to collaborate with private sector companies to perfectly manage their projects, noting, “to gain revenues, it is not necessary to sell the state-owned lands, but we aim to best manage the assets according to detailed economic studies. We do not sell land in order to pay salaries.”
The Public Sector Affairs Ministry does not aim for full privatisation, said Al Nashar, but entering partnerships with major companies, noting that the government aims to enhance the investment environment by implementing the initial public offerings programme for a number is state-owned companies.
The IPO programme, managed by the Ministry of Finance, aims to creating new investment opportunities, said Al Nashar, noting that many governmental studies concluded that the state-owned companies which offer shares of their capital on the EGX are better than others which are completely government-owned, in terms of governance and transparency.
Ahmed Radwan, Hapi’s editor in chief, said that his organisation aims to offer different economic content for the journalism market and to develop a new model of business, adding, “we work according to a well-planned strategy, hoping that we will issue strong publications as we always did in the past for other economic organisations.”