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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2008EGYPTIAN EXCHANGEMaged Shawky SourialChairmanThe Egyptian Exchange is on the right pathto achieve its vision of being a World-ClassEgypt-based Exchange: the Premier CapitalMarket in the Middle East & North AfricaRegion.The Egyptian market witnessed a mixed performanceduring the first half of 2008, experiencing an upsurgeduring the first four months of the year, with CASE 30index recording the highest-ever since its inception,approaching the 12000 threshold, with an increase of11.7% over this period.The Egyptian market, however, showed a lacklusterperformance since the month of May, affected by thesharp decline in the emerging as well as internationalmarkets, following the dramatic increase in oil pricesas well as the global food crisis, pushing CASE30index downward by 6.8% over the first half of 2008 toconclude the period at 9827 points.The Egyptian Exchange has, however, recordedimpressive trading figures, whereby the value tradedjumped to L.E. 397 billion during the first half of year2008, surpassing the recorded value traded in year2007, which amounted to L.E. 363 billion.Consequently, the average daily value traded surgedto L.E. 2.5 billion (after excluding large deals) asopposed to L.E. 1.5 billion last year. Likewise, theaverage daily number of transactions soared to 66thousand compared to 37 thousand transactionsduring year 2007In its continuous efforts to enhance the market depthand development, the Egyptian Exchange has delistedthe inactive companies, ending the first half of2008 with 375 listed companies compared to 435companies at the end of 2007. From anotherperspective, the Exchange is continuously working onattracting the family-owned and the closedcompanies to widen their ownership structure. In thatrespect, the market witnessed three offerings duringthe first half of the year, with a cumulative amount ofL.E. 4.3 billion. These offerings were highlyoversubscribed, with a ratio reaching 40 times, whichrevealed the rising demand to new offerings as wellas the increasing liquidity in the market.Moreover, he Egyptian Exchange continued its effortsto increase the product mix available to investors bylisting and trading new products in the market. In thatrespect, EGX took effective steps to implement theShort Selling system and MCDR started to acceptrequests from investors who wish to lend theirshares.On the technological front, EGX has finalizedupgrading its trading platform to OMX highperformance “X-stream” solution. The brokers werewell trained on using the new system and simulationsessions are currently run to make sure that allmember firms can successfully use the new system.The system is expected to go live in the third quarterof 2008Additionally, EGX is about to implement the marketmaking system, whereby two institutions havealready obtained the license from the Capital MarketAuthority.With regards to Nilex, the mid and small cap marketin the Egyptian Exchange, nine financial institutionswere granted the license to be nominated advisorsduring the first half of 2008, raising the number ofnominated advisors in NILEX, to 10 financialinstitutions. This reflects the interest of many financialinstitutions in the small and medium enterprises. Bythe end of the first half of year 2008, three companieswere listed on Nilex.On the International front, the Egyptian Exchange iseager to strengthen and maintain strong relationswith the regional and international exchanges andassociations. In February 2008, the EgyptianExchange organized the Sixth Conference of theEmerging Capital Markets, which is one of the mostimportant conferences of the World Federation ofExchanges (WFE). Moreover, the Exchange signed amemorandum of Understanding with Cyprus StockExchange in order to consolidate the cooperationbetween the two Exchanges in the areas of commoninterest of the development of the two markets.With these developments in the market, I trust thatEGX is on the right path to achieve its vision of beinga World-Class Egypt-based Exchange: the PremierCapital Market in the Middle East & North AfricaRegion.FUTURE OUTLOOK• Continuous development of the regulatoryinfrastructure to increase the quality of servicesand to ensure investor protection.• Implementing, shortly, the Next GenerationTrading System.• EGX, in collaboration with MCDR, will shortlyimplement the Securities Lending and BorrowingSystem.• The launch of the first ETF on CASE 30 index.• The effective launch of new markets, such asmarkets for derivatives.• Encouraging dual listing of blue chip companies.• 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.CONTACT INFORMATIONContact Name Ms. Nevine MansourE-mail nmansour@egyptse.comWebsite www.egyptse.comPAGE 48