FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010EGYPTIAN EXCHANGEMaged Shawky SourialChairmanDespite the decrease in the number oflisted companies, the total marketcapitalization reached LE 500 billion thisyear, surging by 5%.Despite the repercussions of the global financialcrisis, the Egyptian market has shown a goodperformance during 2009. The year has started,though, on a negative note till February, whereEGX 30 Index touched one of its lowest levels overthe past four years, however it bounced back by83% from its lowest point in year 2009 to concludethe year with an annual increase of 35%.EGX has also been able to achieve good tradingrecords in 2009, with a total trading value of LE448 billion compared to LE 530 billion in theprevious year. Meanwhile, the volume tradedsoared to 37 billion securities in 2009 surging by43% compared to last year. Likewise, the numberof transactions recorded 15 million transactionsthis year versus 13.5 million in 2008.The number of listed companies continued todecrease, reaching 306 companies at the end of2009, down from 373 at the end of 2008, owing toEGX effective policy in enforcing listing, disclosureand corporate governance rules on issuers. Thepercentage of the total number of tradedcompanies to listed companies reached 94% in2009, up from 86% in the previous year. Despitethe decrease in the number of listed companies,the total market capitalization reached LE 500billion this year, surging by 5% compared to thelast year, representing 48% of GDP.Moreover, EGX continued its efforts to increase thetransparency available in the market. In thatrespect, EGX launched 2 new price indices; EGX70 Price Index, that measures the performance ofthe 70 active companies, after excluding the 30most active constituent-companies of EGX 30Index, as well as EGX 100 Price Index, that tracksthe performance of the 100 active companies,including both the 30 constituent-companies ofEGX 30 Index and the 70 constituent-companiesof EGX 70 Index. Both indices, EGX 70 index andEGX 100, soared during 2009 to conclude theyear with an increase of 33% and 36%,respectively.Additionally, EGX launched a new version of itswebsite; www.egx.com.eg, that includes a wealthof information about EGX indices, issuerinformation, market data, education corner,international relations and information services,with a better navigation, more user-friendlyinterface and easier access to information.With regards to NILEX, the mid and small capmarket in the EGX, thirteen financial institutionswere granted the license to be nominated advisorsduring 2009, raising the number of nominatedadvisors in NILEX, to 23 financial institutions,which reflects the interest of many financialinstitutions in the small and medium enterprises.Four companies, operating in different sectors,have got listed on NILEX to conclude 2009 withseven listed companies.On the international front, EGX is eager tostrengthen and maintain strong relations with theregional and international exchanges andassociations. During 2009, EGX signedmemoranda of Understanding with severalExchanges, namely; Casablanca SE, ShenzhenSE, Amman SE, Libyan Stock Market and the IraqiSE. The MoUs tackled the areas of mutualcooperation on capital markets' developmentsincluding exchange of information, experts, staffand experiences for the respective benefit of thesecurities markets.With these developments in the market, I trust thatEGX is on the right path to achieve its vision ofbeing a World-Class Egypt-based Exchange: thePremier Capital Market in the Middle East & NorthAfrica Region.HISTORY AND DEVELOPMENTThe Egyptian Exchange (EGX), formerly Cairo &Alexandria Stock Exchanges (CASE), dates back tomore than 125 years. Operating through twolocations, the Alexandria Stock Exchange wasofficially established in 1883, followed by CairoStock Exchange in 1903. In 1997, the PresidentialDecree No. 51/1997, re-defined the legal structureof the Exchanges and since then both Exchangeswere managed by one Chairman and the sameBoard of Directors. The two exchanges were veryactive in the 1940s to the extent that they rankedfifth among the world exchanges. The socialistregime and the nationalization policy in the early1960s have put both CASE on hold, then in 1991,Egypt’s new era of economic reform started. Thus,by 1992, the role of CASE was re-activated, having656 listed companies on the trading system.Despite the repercussions of the global financialcrisis, the Egyptian market has shown a goodperformance during 2009 with its main index EGX30 concluding the year with an annual increase of35%. On the other hand, EGX has been able toachieve good trading records in 2009, with a totaltrading value of LE 448 billion compared to LE 530billion in the previous year. However, the volumetraded soared to 37 billion securities in 2009compared to 26 billion securities in 2008, surgingby 43% compared to last year. Likewise, thenumber of transactions recorded 15 milliontransactions this year versus 13.5 million in 2008.In its efforts to continue the enhancement of themarket activity and transparency, EGX launched 2new price indices; EGX 70 Price Index, thatmeasures the performance of the 70 activecompanies, after excluding the 30 most activeconstituent-companies of EGX 30 Index, as well asEGX 100 Price Index, that tracks the performanceof the 100 active companies, including both the 30constituent-companies of EGX 30 Index and the 70constituent-companies of EGX 70 Index. Bothindices, EGX 70 index and EGX 100, soared during2009 to conclude the year with an increase of 33%and 36%, respectively.From another perspective, the Listing and DelistingRules were amended to ensure furtherenforcement of corporate governance and to retainand attract quality issuers as well as regulating thetrading of EDRs and ETFs.In its endeavor to keep abreast with technologicaladvancements in order to be the Premier market inthe Middle East North African (MENA) Region thatbest serves its stakeholders, EGX signed anagreement with London SE to connect the 2markets via FIX connectivity system. This willfacilitate capital flow from London to Egypt andvice versa and set EGX as the hub in the MiddleEast and African region.Additionally, EGX launched a new version of itswebsite; www.egx.com.eg, that includes a wealthof information about EGX indices, issuerinformation, market data, education corner,international relations and information services,with a better navigation, more user-friendlyinterface and easier access to information.On the international front, EGX has signed during2009 memoranda of Understanding with severalExchanges, namely; Casablanca SE, ShenzhenSE, Amman SE, Libyan Stock Market and the IraqiSE. The MoUs tackled the areas of mutualcooperation on capital markets' developmentsincluding exchange of information, experts, staffand experiences for the respective benefit of thesecurities markets.These developments are expected to promote theactivity of the Egyptian market, which has beenperceived as one of the most developed emergingmarkets during the past years.FUTURE OUTLOOK• Continuous development of the regulatoryinfrastructure to increase the quality of servicesand ensure investor protection.• Increasing the product mix available to investorsby listing and trading ETFs, Sukuks and laterderivatives, etc.• Encouraging dual listing of blue chip companiesand more investment flows to the market. EGXplans for three road shows covering the US, FarEast and the MENA regions.• Listing selected prominent and fast growing midand small cap companies on Nilex.• Continuous enhancement of EGX internationalrelations with stock exchanges around the globeas well as regional and international federationsand associations working in the exchange industry.PAGE 80
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010EGYPTIAN EXCHANGEOFFICIAL 6 MONTH STATISTICSUS$ millions# Shares millionsTotal Volume Average Daily Volume Total Volume Average Daily VolumeStocksJul-09 3,378.94 168.95 2,133.15 106.66Aug-09 4,786.46 217.57 2,573.42 116.97Sep-09 3,786.11 199.27 1,642.32 86.44Oct-09 4,280.73 214.04 1,873.98 93.70Nov-09 5,707.87 285.39 1,531.22 76.56Dec-09 4,613.86 200.60 1,676.25 72.88TOTAL 26,553.98 214.30 11,430.34 92.20BondsJul-09 546.24 27.31 2.97 0.15Aug-09 1,007.30 45.79 5.46 0.25Sep-09 455.22 23.96 2.56 0.13Oct-09 553.38 27.67 2.90 0.15Nov-09 446.67 22.33 2.45 0.12Dec-09 600.86 26.12 3.20 0.14TOTAL 3,609.67 28.86 19.54 0.16OtherJul-09 389.22 19.46 516.30 25.82Aug-09 350.84 15.95 444.65 20.21Sep-09 473.34 24.91 445.08 23.43Oct-09 480.24 24.01 467.68 23.38Nov-09 14,143.09 707.15 1,003.23 50.16Dec-09 1,001.61 43.55 632.42 27.50TOTAL 16,838.34 139.17 3,509.36 28.42MarketCapitalization(US$ millions)IndexMONTHLY STOCK VOLUME VS INDEX(US$ millions)StocksIndexMONTHLY MARKET CAPITALIZATION(US$ millions)Jul-09 89,768.49 6,052.44Aug-09 96,632.85 6,596.61Sep-09 102,299.43 6,633.82Oct-09 100,200.80 6,838.33Nov-09 89,081.59 5,761.96Dec-09 91,004.33 6,092.17CONTACT INFORMATION6,0005,0004,0003,0002,0001,00007,000 120,0006,000 100,0005,00080,0004,00060,0003,0002,00040,0001,000 20,00000Jul Aug Sep Oct Nov Dec Jul Aug Sep Oct Nov DecContact Name Ms. Heba Serafi E-mail Heba.Serafi@egx.com.eg Website www.egx.com.egPAGE 81
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