Egyptian Prime Minister Mostafa Madbouly has held a meeting with Mohamed Farid, the newly appointed acting chairperson of the Financial Regulatory Authority (FRA), to review the Authority’s plans during the coming period.
Madbouly said that the government pays great attention to supporting all sectors that drive the growth of the Egyptian economy, at the heart of which is the non-banking financial sector.
Farid said that the coming period will witness the development and implementation of a comprehensive business strategy that extends to all activities of the non-banking financial sector, starting with the capital market, financial leasing, mortgage finance, insurance, consumer finance, and microfinance.
He explained that the coming period will witness developing registration rules to enable the largest number of serious companies to register and offer, following the formation of the Board of Directors of the FRA. Additionally, insurance products will be developed.
He pointed out that work will be done to develop the venture capital activity to support startups in obtaining the necessary financing to develop their activities and increase the volume of their business, along with accelerating establishing and activating derivatives markets to enable dealers to hedge against the risks of price fluctuations, as well as consider the possibility of increasing the component of Inter-Arab investment through intensive cooperation between the Arab capital markets and introducing required amendments in this regard.
Ehab Saeed, the former board member of the Egyptian Exchange (EGX), said that the last element in the capital market chain is the head of FRA. He added that the market needs more depth and reforms to become more resilient.
Saeed added that the market’s fragility is the main reason behind its being affected by the simplest changes, and the money market must become a top priority for the state until it gains proper strength.
He explained that the crisis is seen in the small number of companies and the decrease in trading. The first steps that reflect the state prioritizing the money market is the government proposals program, and the offering of companies owned by the state or are affiliated with the armed forces for the purpose of revitalizing the money market, not for financing.
He stressed that making a special decision to postpone taxes imposed on the money market is an important step at the moment. The file of proposals and the capital market in particular must be handled by a ministry other than the Ministry of Finance, especially the Ministry of Investment or the Ministry of the Public Business Sector.
He stated that the reform steps begin with strong decisions and their implementation in a practical way to get the market out of its stagnation and the need to understand the capital market as an important tool to attract direct and indirect investments to the country.
Mohamed Maher, the head of the Egyptian Capital Market Association (ECMA), demanded that Farid take into account the timing of decision-making, and deal more politically due to the sensitivity of the capital market.
