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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT APRIL 2007
CAIRO & ALEXANDRIA STOCK EXCHANGES
Maged Shawky Sourial
Chairman
Our vision is to be the “Exchange of
Choice” in the Middle East and North Africa
(MENA) Region and as such we will spare
no efforts to better serve our customers.
In a year of mixed fortunes for markets, CASE
has continued to reinforce and improve its
position in terms of benchmark performance.
Our core trading business has performed
exceptionally well during a period of
increasing competition among markets.
CASE ranked top, compared to developed
and emerging markets, tracked by Standard
& Poor’s and Morgan Stanley indices. The
well acclaimed magazine “Newsweek”
pointed out that CASE was one of the top and
best performing markets in the world. CASE
market capitalization soared to US$ 93 billion
during the year 2006 forming 80% of GDP,
while value traded jumped to US$ 50 billion
realizing around 79% increase over the
previous year. The domestic market has seen
significant growth in equities trading, which
was mainly fuelled by the active participation
of international and retail customers.
Our vision is to be the “Exchange of Choice”
in the Middle East and North Africa (MENA)
Region and as such we will spare no efforts to
better serve our customers.
This year, we have worked on building and
renewing our critical regulatory and infra
structural platforms. Our commitment to
develop a quality marketplace is indisputable.
In line with our annual efforts, we released a
set of new rules i.e. margin trading, intraday
trading and some amendments in the listing
rules. These measures were aimed at raising
the responsibilities of intermediaries and
facilitating mergers and acquisitions among
issuers. These changes are important in
continually improving the robustness of our
marketplace. Furthermore, we have cemented
our leadership in technology and driven
ahead with an agreement with one of the key
technology exchange companies worldwide,
OMX Group, to establish a joint venture
company in Cairo that will better serve the
Egyptian, Middle Eastern and African capital
markets.
In the coming year, we plan to introduce new
products such as Exchange Traded Funds.
We will also be exploring new structured
products and distribution channels for greater
retail penetration. Furthermore, CASE will
focus its coming efforts on encouraging
new domestic and regional listings.
By constructing a market of quality listed
companies, we are in a position to greatly
advance the reforms of the Egyptian
economy. Moreover, CASE will continue its
educational programs in collaboration with
various universities in Egypt in order to
enhance investor education.
In its drive to be the major player in the
MENA region, CASE also strives to be
recognized globally. Consequently, CASE
was the first Arab Exchange to be a member
of the World Federation of Exchanges in
2005, which confirms the compliance of
CASE to international standards.
We would like to thank our members and
customers for supporting our marketplace,
and the employees at CASE for their hard
work to achieve CASE vision.
HISTORY AND DEVELOPMENT
The Egyptian Stock Exchange is comprised
of two exchanges: the Cairo and Alexandria
Stock Exchanges (CASE), and is governed
by the same board of directors that share
the same trading, clearing and settlement
systems. The Alexandria Stock Exchange was
officially established in 1888 followed
by Cairo in 1903. The two Exchanges were
very active in the 1940s, when the Egyptian
Stock Exchange ranked fifth in the world.
Nevertheless, the central planning and
socialist policies adopted in the mid-1950s
led to the demise of activity on the
Exchanges, which remained dormant
throughout the period between 1961
and 1992.
In 1990, the Egyptian government started an
economic reform and restructuring program.
The move toward a free-market economy has
been remarkably swift and the process of
deregulation and privatization has stimulated
stock market activity. In mid-1997, the
Exchange started its modernization plan that
included an overhaul of its trading system,
listing and membership rules, OTC trading
and investor education.
CASE aims to be one of the core financial
centers in the Middle East North Africa
(MENA) region, through the adoption of
leading-edge technology, commitment to
continuous improvement in its rules and
regulations, the products and services it
offers, and alliances forged with international
markets. CASE is striving to strengthen its
competitive position by embracing a strong
customer orientation, offering timely and
secure services to investors, members and
market participants as well as promoting the
confidence and understanding of investors of
its operations. In short, fairness, efficiency and
transparency constitute our ongoing vision
and ultimate objectives.
FUTURE OUTLOOK
CASE is currently working on the following:
• re-locating the Exchange to the Smart
Village, being a main component of the
regional financial center;
• continuing commitment to best practices
(conduct standards and integrity);
• increasing diversity of offerings;
• continuous reviewing of Listing and
governance rules to ensure quality issuers on
its main board;
• introducing a new segment for SMEs and
growing companies;
• encouraging dual listings of blue chip
companies;
• introducing new trading mechanisms such
as margin trading and short selling to further
enhance market liquidity;
• introducing Exchange Traded Funds and
derivatives; and
• spreading market awareness and investor
education all over Egypt.
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