Ramy El-Dokany, the Chairperson of the Egyptian Exchange, has said that there will always be crises, as it is part of life, hoping that the current economic crises will not last in the coming period, as the Egyptian Exchange has witnessed excellent performance since last August, with the exception of the last week only.
During his speech at the Daily News Egypt’s first annual summit, El-Dokany stressed that the most important thing when problems and difficulties aggravate is to acknowledge the crisis or problem and not to deceive the public because that will make the situation more difficult.
He added: “From the first day, we have been working in harmony and great understanding between the Financial Regulatory Authority, under the leadership of Mohamed Farid, and the Egyptian Exchange, and that was the biggest supporter in giving the market the required balance in this difficult stage.”
He mentioned that the management of the capital market has become more open to solving the problems of investors and customers and to open dialogue with them continuously in a better way than it was in previous periods, but without forgetting that it is not possible to disclose everything, but it is necessary to inform investors of the reality of the situation in general without indulging in details.
El-Dokany pointed out that the Egyptian economy has proven its ability to withstand external shocks, benefiting from a unique geographical location at the crossroads of Asia and Africa, the youth component of the population, and the structural reforms program to upgrade fair value chains.
He hinted that the Egyptian Exchange reacted positively to this new policy, from August until the end of the year, by turning to a rise that exceeded an average of 22%, during the year, which continued during the current year, despite the harsh conditions in the global financial markets, which brings to mind what happened in 2008, the financial crisis in affected the global economy.
El-Dokany added that the rises came despite the enormous challenges witnessed by the global financial markets as a result of the Russian-Ukrainian war and the monetary tightening policy pursued by the US Federal Reserve. For the Gulf countries by 22.2%, and the third place after the Saudi and Abu Dhabi UAE Tadawul stock exchanges in terms of trading values denominated in dollars, with trading values of $59bn during the year 2022 despite the depreciation of the Egyptian pound against the dollar, and the percentage of non-Egyptians trading on listed shares increased to reach 31%.
He added that the Egyptian Exchange has benefited greatly from the economic reform program adopted by the state, and the reforms it is implementing after obtaining an International Monetary Fund loan, which gives a strong certificate of confidence in the Egyptian economy, in addition to liberalizing the exchange rate to enhance the economy’s resilience in the face of external shocks, and monetary policies, which aims to gradually reduce inflation rates, as well as increase the role of the private sector in the Egyptian economy.
El-Dokany stressed that the performance indicators of the stock market have witnessed an improvement during the last period, affected by the recent reform measures that were taken at the level of monetary policy, as the market capital of companies whose securities are listed on the stock exchange achieved the highest historical value exceeding EGP 1.1trn, in addition to an improvement in the numbers of New investors, as well as average daily trading values, which reflect the confidence and interest of investors in stocks as an investment haven that helps them hedge against price fluctuations.
He stressed that the stock exchange management is set in mind to work on completing efforts to develop the Egyptian capital market by developing new products to diversify investment options for the masses of investors, including financial derivatives and activating the mechanism of borrowing securities for the purpose of selling them.
El Dokani also referred to the stock exchange management’s efforts to increase institutional investment, especially through government institutions, which play a key role in revitalizing the stock market and stimulating foreign investments. He also explained that last year the Egyptian Exchange achieved historical figures on several levels, including trading values and volumes and indices returns and this reflected positively on motivating about 175,000 new individual investors to invest their money in listed shares as a hedge against economic challenges and price fluctuations.
He indicated that the number of new investors during the year 2022 witnessed a growth of about 202% compared to its levels during the previous year.
El-Dokany said that the new stage of cooperation between the Egyptian Exchange and the Financial Regulatory Authority was the main pillar that contributed to the advancement of the stock market during the last third of last year, which helped in approving a package of decisions that positively reflected on the performance of the market, including the use of many mechanisms to adjust the performance of the Stock Exchange, such as the reverse execution mechanism, in order to ensure the stability of the market instead of canceling transactions, in addition to adopting the rules for settling transactions executed on corporate bonds, which contributed to revitalizing the secondary market for corporate bonds, and amending the listing and disclosure rules, which allowed the temporary listing of companies.
El-Dokany confirmed that the leadership in times of crisis desperately requires clarity and transparency in policies and avoiding conflicting policies that may make the situation worse.
