Dailynewsegypt

Tag: MCDR

  • FRA announces excluded candidates in MCDR election

    FRA announces excluded candidates in MCDR election

    The Financial Regulatory Authority (FRA) announced the exclusion of some candidates in the election of Misr Central Clearing, Depository and Registry Company (MCDR).

    The authority excluded Yasser Mohamed Khalil, who were running for a managing director, since he did not meet neither item C of Article 4 of the Authority’s Board Resolution No. 96 of 2014, nor item B of Article 5 in the same resolution.

    The authority has also excluded Safwat Abdel Moneim for not meeting the conditions required for running the election, as it was revealed that he currently works as a branch head of Mubasher Trade since May 2017. Mubasher is a shareholding company of MCDR.

    However, the authority found that Mohsen Adel Helmy, Ashraf Ismail, Medhat Nafeh, and Yasser Mahmoud Rashid eligible for the post. However, they were excluded due to decision No 124 of year 2014 by the authority to amend decision No. 53 of year 2018 regarding the controls of providing licencing, its continuation and the rules of ownership of shares by companies working in the non-banking financial field.

    In light of the announcement made by the MCDR, at least one female must run for the position of the managing director.

    Meanwhile, the election committee approved the candidacy papers of Khalid Abdel Rahman, who has no shares in the company, as well as Lamis Ali Mohamed.

    The FRA stated that the board of directors agreed to present the list of candidates to the general assembly of the company to choose two experienced members who are not shareholders of the company to complete the formation of the board of directors.

    The FRA indicated that the appeal committee, formed by decision No. 1542 of 2019 to examine the appeals regarding candidacy procedures, will end its work within two weeks of the filing date of the last appeal. The committee will not examine any appeals submitted after five working days since notification of a committee’s decision.

  • Securities lending to be conducted through custodians under MCDR system: Abdelbary

    Securities lending to be conducted through custodians under MCDR system: Abdelbary

    Tarek Abdelbary, managing director of Misr for Central Clearing, Depository, and Registry (MCDR), revealed the new mechanism of short selling in Egypt, in a statement to Daily News Egypt. 

    The new system includes the presence of a number of vessels, named custodians, at MCDR, each with a number of securities offered for lending in a determined quantity, while the brokerage companies whose clients want to borrow securities can access the MCDR system and choose the custodian with targeted securities. The securities lending is only implemented through inking a contract between the brokerage and the custodian.

    The next step is that the client sells the securities that he borrowed in the market, provided that the proceeds are retained with the broker seller, in preparation to buy the securities again after their prices get lower.

    Abdelbary explained that the lender client receives an investment return of 100% of the total sale value (including brokerage commission rate), and 50% goes to the borrower.

    He noted that the old system of short selling relied on MCDR’s central vessel that contains all securities. It is now replaced with several vessels, so that the responsibility can be shared among custodians and brokerage companies. 

    He added that the MCDR has conducted trial operation of the new system with five brokerage companies and five custodians affiliated to them, and it has been re-tested with one brokerage company and its custodian. After ensuring the success of the trial, the system was presented to the MCDR’s advisory committee to obtain its approval before implementation.

    Abdelbary explained that his company will start to communicate with the brokerage companies to ensure the compatibility of the “back office” systems of companies with the electronic system of MCDR, calling for the brokerage companies to adjust their “back office” to the new mechanism.

    He pointed out that the MCDR company will launch intensive training courses for brokerage companies by the end of next week to work under the new system, stressing that the activation of the new mechanism required a large number of brokerage companies to engage in the process which would increase the amount of shares offered for sale as well as clients wishing to lend and borrow. It is difficult to achieve the desired result of this mechanism with a small and limited number of companies.

    Abdelbary said the Financial Regulatory Authority (FRA) and the MCDR will launch the new mechanism in November, provided that brokerage companies adjusted their “back office” systems and trained their staff to work under this mechanism. 

    He noted that the new mechanism may result in some problems for small brokerage firms, which will be solved immediately, as it will be under development until it becomes satisfactory to all parties.

    Khaled Al-Nashar, vice chairperson of the FRA, presided a meeting of the members of the capital markets, including the EGX Chairperson Mohamed Farid and his deputy, to discuss the activation of the new mechanism of securities lending.

    He said that according to what was presented during the meeting, the FRA has given the green light to start the mechanism of short selling in November.

    Al-Nashar pointed out that the chairperson of MCDR will announce at the beginning of October on the celebration of the 25th anniversary of the establishment of the company, the readiness of the new system.

  • MCDR spends EGP 72m for its general assembly in May

    MCDR spends EGP 72m for its general assembly in May

    Member of the board of directors of Misr for Central Clearing, Depository and Registry company (MCDR), Awny Abdel Aziz,  told Daily News Egypt that his company spent EGP 72m in the form of profit distribution for the members of the general assembly in the last few months, as the profits of 2016.

    He said that the profit distribution came after the approval of the assembly to distribute EGP 40 per share for 201

    He added that the company’s capital is estimated at EGP 184.8m, distributed on 1.8 million shares with nominal value of EGP 100 per share. The distributed coupon is EGP 40, in addition to 15% bonus for employees, and 8% for the directors’ board.

    Banks, which are members of central depository, own 50% of the shares of the company’s capital, in addition to 45% for companies working in the field of securities, and 5% for the Egyptian stock exchange.

    The revenues achieved by the company reached EGP 136.6m, compared to EGP 104.49m, with a 20% increase. Last year the company collected payable revenues worth EGP 91.7m compared to EGP 68m, in addition to EGP 145.45m investment revenues, and other revenues estimated at EGP 32.6m.

    The company’s net profit grew by 599% to reach EGP 173.92m compared to EGP 108.9m in 2015. The two activities of depositing and central registry represented 76% of the company’s net profits, worth EGP 133.42m. The settlements guaranteed that funds would achieve an increase of EGP 40.4m compared to the previous year where the guarantees reached EGP 24.6m.

    MCDR seeks to signs two new agreements with the capital markets of Dubai and Oman this year after increasing its capacity to 17 terra.

  • E-Finance, MCDR, NITD cooperate to launch electronic payment services

    E-Finance, a company specialising in the field of electronic payment and money collection, signed a protocol of cooperation with Misr for Central Clearing, Depository, and Registry (MCDR) and with Nile Information Technology and Dissemination (NITD) to activate the electronic payment for investors and brokerage firms for the first time in the Egyptian market.

    The protocol was signed by Ibrahim Sarhan, chairperson of E-Finance; Mohamed Abdel Salam, chairperson of MCDR; and Mohammed Omar, general manager of NITD.

    The agreement aims to provide electronic payment services for investors and brokerage firms through the unified code of the stock market. The new system offers instantaneous reports showing details of all transactions. It also allows investors to transfer money at any time without going to the bank, not to mention the transfer of cash from one place to another. This ensures the implementation of required transactions of securities in a timely manner.

    As for brokerage firms, the new system will allow only limited cash transactions and will ensure that the transferred money will arrive in the next working day without delay. In addition, the companies no longer need to keep large sums of cash in their headquarters, nor go to banks to deposit their cash.

  • T+0, T+1 mechanisms increase by 40% of daily trading

    T+0, T+1 mechanisms increase by 40% of daily trading

    Tarek Abdul Bari, managing director of Misr for Central Clearing, Depository, and Registry (MCDR), said that selling and buying operations using T+1 and T+0 mechanisms have increased in the Egyptian Exchange’s (EGX) daily trading by about 35-40% during the last three months, compared to a previous average of 18%. This comes as a result of the recent recovery of market trading volumes, reaching EGP 2bn per day.

    MCDR has activated the T+1 mechanism in early 2016, and its operations reached 10% for several months until it reached the mentioned 18%, while its best trading amounted to 24%.

    Regarding MCDR’s plan for 2017, Abdul Bari said that his company aims to interconnect with Abu Dhabi Securities Exchange (ADX) and that it has recently completed the double registration with El Salam Company at the Kuwait Stock Exchange (KSE). MCDR has also completed the procedures of arbitrage with Kuwait Clearing Company. Abdul Bari ruled out that MCDR will conduct new linkages with foreign stock exchanges in 2017.

    On the other hand, MCDR targets to develop its storage capacities as preparation for listing new companies in EGX, especially after the government’s announcement about new initial public offerings (IPOs) in 2017, along with the scheduled listing of some private companies.

    Abdul Bari added that the main target of the company is to develop the quality and capacity of its software and hardware to cope with the development of MCDR services.

    He added that MCDR has completed the registration of El Salam Company with KSE and Kuwait Clearing Company as a preparation for the arbitrage.

    MCDR has contracted with the Commercial International Bank (CIB) to issue prepaid cards to those investors in EGX wanting to receive the profits of their own stock portfolio through ATM, with the possibility of using these cards in purchases. Abdul Bari said that this service has achieved a major breakthrough as it succeeded in solving the problems experienced by the investors from remote provinces in cashing in their coupons, especially New Valley Governorate, located hundreds of kilometres from Cairo, making it difficult for small traders to receive their profits.

    Abdul Bari added that the new cards allow the investors to cash in their profits through different ATMs at any time, with a maximum of EGP 15,000 per day. These cards can also be used in purchases, with a maximum of EGP 30,000 per day.

    He pointed out that the crisis in the transferring of funds abroad prevented them to enjoy the benefits of interconnection, because investors are suspicious that they would face difficulty in transferring their profits from the EGX.

  • MCDR sends capital tax files of non-listed companies in EGX to tax authority

    MCDR sends capital tax files of non-listed companies in EGX to tax authority

    Misr for Central Clearing, Depository and Registry (MCDR) sent files that include capital tax dues on the shares of companies that are not listed in the Egyptian Exchange (EGX) to the Egyptian Tax Authority, managing director and vice chairperson Tarek Abdelbary said.

    Abdelbary told Daily News Egypt that the files include different time periods and the number of purchase and sales transactions of companies that are not listed on the EGX, for which their owners achieved capital gains. This is besides the calculated value of these capital gains and tax dues.

    Capital gains of non-listed companies are subject to a 25% tax on the profits.

    He pointed out that the role of the EGX is to collect tax dues, as the non-listed companies are not covered by the Supreme Council for Investment’s decision to extend the decision to freeze taxes on capital gains, which applies only to listed companies.

    The Supreme Council for Investment decided, in its first meeting two weeks ago, to postpone the collection of taxes by 10% on capital gains resulting from trading listed companies on the EGX for three more years starting from 2017—when the first postponement approved by the president for two years will end.

    The activation of the Supreme Council for Investment’s decision requires the approval of the House of Representatives to amend the law on the postponement of tax collection for two years.

    Abdelbary said the MCDR opened the door once again to Abu Dhabi Securities Market to link between them through Naeem Holding for investment in the Abu Dhabi Securities Exchange.

  • GDR ratios not to exceed free-floating shares, MCDR to monitor

    GDR ratios not to exceed free-floating shares, MCDR to monitor

    Misr for Central Clearing, Depository, and Registry (MCDR) will prepare a daily report to monitor the release of Global Depository Receipts (GDR), MCDR managing director Tarek Ezzat Abdelbary said.

    The move comes in an attempt to activate the Egyptian Exchange’s (EGX) decision which stipulates that the GDR ratio should not exceed each company’s free-floating shares ratio.

    He expects that companies will not find it difficult to follow this decision, as the transfer processes are not solely limited to transferring the shares into certificates of deposit. The processes activate the certificates’ conversion into shares processes, in order to benefit from investing the profits in shares repurchase.

    The free-floating share of the Commercial International Bank (CIB) does not exceed the maximum GDR ratio. This ratio is limited to 33% of the total capital so far, despite the active issuance of equity in the last period.

    An EGX statement released on Thursday reported that the CIB has 1.9m shares left before reaching the maximum GDR ratio.

    All companies have GDRs that match the EGX’s decision, except for three companies, one of which is Edita for Food Industries. The company’s GDR ratio is 24.87% of its capital, which exceeds its free-floating shares ratio at 14.12%.

    Additionally, Orascom Telecom Media and Technology Holding (OTMT) GDR ratio is 58.14%, compared to a 40.83% free-floating shares ratio. The third company is Global Telecom Holding (GTH) with a GDR ratio of 73.94%, compared to a free-floating shares ratio of 25.18%.

    Ezzat Abdelbary said MCDR will close the door to Edita’s share transfers into GDRs starting 10 August, until the GDR and free-floating shares ratios comply with the EGX’s decision.

    GDRs have seen a significant period of financial activity, based mainly on the direction that the EGX’s foreign investors category is taking. Foreign investors can transfer their money abroad through certificates or obtain foreign currency. Moreover, the certificate trading prices are incredibly close to the US dollar exchange rate in Egypt’s informal market.

    This table shows companies’ GDR ratios alongside their free-floating shares ratios.

    Free-floating shares ratio GDR ratio Company
    42.36% 0% Naeem Holding
    42.42% 0.14% Pachin
    47.07% 1.95% Suez Cement
    32.43% 0.83% Ezz Steel
    19.61% 0.31% Etisalat Egypt
    26.42% 2.22% Ramco for Tourism Villages construction (RTVC)
    55.64% 0.76% Palm Hills
    48.57% 27.48% Lecico Egypt
    54.09% 4.37% GB Auto
    76.14% 12.01% EFG-Hermes
    14.12% 24.87% Edita Food Industries
    66.64% 33.16% CIB
    40.83% 58.14% OTMT
    25.18% 73.94% GTH

     

     

     

  • Ministry of Investment cancels EGP 10,000 fee for depositing securities at MCDR

    Ministry of Investment cancels EGP 10,000 fee for depositing securities at MCDR

    The Ministry of Investment cancelled the minimum fee of EGP 10,000 for registering in Misr for Central Clearing, Depository, and Registry (MCDR).

    MCDR Managing Director Tarek Ezzat Abdelbary noted that registration fees are limited to 0.1% of the company’s capital.

    This step eases the way for small and medium-sized enterprises (SMEs) to register in the central depository system. He said the depository system will help safeguard investors’ rights through saving their securities electronically in accounts that will be opened upon the establishment of the company.

    Minister of Investment Ashraf Salman declared Tuesday that small companies with capita of less than EGP 5m will pay EGP 500 in registration fees, rather than EGP 5,000 as an annual fee to register their securities in MCDR.

    The Ministry of Investment explained that this step is aimed to encourage companies to list their shares under the central depository system.

    MCDR was launched in 1996 and its fees were determined in agreement with the Egyptian Financial Supervisory Authority (EFSA). After the enactment of Law 93/2000 for depository and central registry of securities; determining the fees was transferred under the minster of investment’s jurisdiction.

  • MCDR rejects ECMA’s request of a 50% reduction in fees of T+1 and T+2 mechanisms

    MCDR rejects ECMA’s request of a 50% reduction in fees of T+1 and T+2 mechanisms

    Head of the securities division in the Cairo Chamber of Commerce, Misr for Central Clearing Depository and Registry (MCDR) Awny Abdel Aziz rejected a request from the Egyptian Capital Market Association (ECMA) to reduce the fees obtained by MCDR for settling selling and buying operations using T+1 and T+0 mechanisms.

    ECMA requested a reduction in the fees on all operations carried out using the two mechanisms, in which the ratio of 1/8 in a thousand per operation would be reduced to 1/16 in a thousand.

    Abdel Aziz said the reason for the rejection is that MCDR puts a maximum limit of EGP 5,000 for the fees it obtains from each operation, which means that there is a limit. Moreover profits of MCDR have significantly dropped to less than EGP 500m per session due to the decline of trading volume.

    MCDR has not revealed any details about its financial performance in 2015 yet however it recorded net profit of EGP 65.8m in 2014 compared to EGP 33.3m in 2013.

    T+1 is a settling mechanism that allows investors to sell shares the next day after they buy them. While the T+0 mechanism is an instantaneous settling mechanism that allows trading securities using the system of buying and selling in the same session.

    The Ministry of Investment has not responded to the request made by ECMA to approve on distributing part of the profits from the Investor Protection Fund against non-commercial risks on members of the fund.

    Abdel Aziz said that members of the fund, whether brokerage companies, fund management, or financial portfolio management, are facing major declines in revenues due to the decline in the size of stock exchange trading volumes, which requires the provision of liquidity from other sources like the investor protection fu

  • Nasdaq Dubai launches new ‘share link’ to facilitate trading for Egyptian investors

    Nasdaq Dubai launches new ‘share link’ to facilitate trading for Egyptian investors

    Nasdaq Dubai, the region’s international financial exchange, created a new share link with Misr for Central Clearing, Depository and Registry (MCDR), to enable Egyptian investors to easily buy and sell shares on Nasdaq Dubai, according to a Monday statement.

    The new link is useful for individual investors, who can use their Egyptian broker to trade easily on Nasdaq Dubai through MCDR, using Egyptian pounds, the statement read.

    “As the Middle East’s international exchange, Nasdaq Dubai opens a door to the global capital markets for investors based in the region,” Chairman and Managing Director of MCDR Mohamed Soliman Abdel Salam said.

    Vice Chairman and Managing Director of MCDR Tarek Abdelbary said Nasdaq’s link with MCDR is a significant new step towards facilitating dual listings by issuers in Egypt and the UAE.

    “Nasdaq Dubai equities offer Egyptian investors new opportunities that are regulated to international standards,” CEO of Nasdaq Dubai Hamed Ali said during his visit to Cairo over the past few days.

    “Our link with MCDR is a significant step forward in Dubai’s expanding capital markets ties with Egypt, which also include opportunities for Egyptian companies to dual list securities on Nasdaq Duba.”

    The new link enables Egyptian brokers to trade Nasdaq Dubai securities through a member of Nasdaq Dubai.

    As for MCDR, it acts as settlement agent and custodian through its connection with Nasdaq Dubai’s central securities depositary to support the transfer of shares between Egypt and Dubai, according to the statement.

    In March 2015, Orascom Construction’s primary listing at Nasdaq Dubai took place, which included a dual listing with Egypt enabled by MCDR.

    In August 2015 Beltone Market Maker, a subsidiary of Egyptian investment bank Beltone Financial Holding, joined Nasdaq Dubai as a member to provide market making services.