Download - FEAS

FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2006
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, the
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.
The 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 the CASE was
one of the top and best performing markets in
the world. The CASE market capitalization
soared to $66 billion. Value traded increased
sharply to $27 billion during the first half of
2006, around 155% increase over the same
period last year and market capitalization as a
percent of GDP exceeded 70% at the end of
June 2006. 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, the 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, the 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, the CASE also strives to be
recognized globally. Consequently, the CASE
was the first Arab Exchange to be a member
of the World Federation of Exchanges in 2005,
which confirms the compliance of the CASE
to international standards.
We would like to thank our members and
customers for supporting our marketplace,
and the employees at the CASE for their hard
work to achieve the 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.
The 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. The 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
The CASE is currently working on the
following.
• re-locate the Exchange to the Smart Village,
being a main component of the regional
financial center,
• commitment to best practices (conduct
standards and integrity),
• increasing diversity of offerings,
• continuous review of Listing and
governance rules to ensure quality issuers on
its main board,
• introduce a new segment for SMEs and
growing companies,
• encouraging dual listings of blue chip
companies,
• introduce new trading mechanisms such as
margin trading, short selling and online
trading to further enhance market liquidity,
• introduce Exchange Traded Funds and
derivatives, and
• spread market awareness and investor
education all over Egypt.
PAGE 68