Following three turbulent years, the Egyptian Stock Exchange has been awarded the title of Most Innovative African Stock Exchange.
The award, given by the investment holding company Africa Investor, is granted to the most developing African stock exchange market over the past year, according to a statement by the Egyptian Stock Exchange.
Since the 2011 uprising, the stock market has been suspended several times when political events have spooked traders. Most recently, trading on the EGX100 was temporarily suspended on June 1, when news of a planned capital gains tax prompted a selling frenzy.
The award was announced in a ceremony at the New York Stock Exchange in the attendance of some of the biggest financial and investment companies in the world, the statement said.
The Egyptian Stock Exchange was selected from five other markets. The judges’ panel lauded the development the Egyptian stock market has undergone over the past year – particularly given all the instability the country has witnessed.
“We are happy with this international recognition which is the fruit of continuous efforts to guarantee a quantum leap in the market’s performance,” EGX chairman Mohamed Omran said. “The last year saw the launch of several mechanisms such as significant deals…as well as the extension of trading hours.”
Omran said that the stock market moved to activate suspended activity such as exchange-traded funds (ETFs) and activating the over-the-counter market (OTC). Investor rights were also given special attention whereby new rules were set to guarantee transparency for investors.
He explained that the relative political and economic stability in the country helped eliminate most of the precautionary measures put in place following the 2011 uprising. Omran added that the stock exchange is committed to avoiding suspensions in trading, regardless of the circumstances, which is why investors are confident in investing again.
Last month, the Egyptian Stock Exchange, in coordination with the Egyptian Financial Supervisory Authority (EFSA), decided to lift precautionary measures put in place in 2011 following the January 25 uprising in light of positive developments and market stability.
The stock market went back to using the price discovery session, which means reinstating a 30-minute pre-trading session.
Most stocks were also allowed to fluctuate by an additional 10 percent during regular trading hours, up from the five percent currently allowed. The Nile index will remain limited to five percent.
Trading hours were also extended to become four and a half hours, from 10 am until 2:30 pm, the statement said.
Earlier this month at the Euromoney conference, Investment Minister Ashraf Salman pointed to the strong performance of the capital market as an indicator of what’s to come, saying “the index has surged 104 percent since June 30 and it’s become one of the best performing markets in the world. It’s said that the market tends to go up before the economy does.”
The developments in the stock market are reflected in the increase in cash flow levels which managed to secure over LE10 billion for Egyptian companies over the past months to help them grow and offer more job opportunities, Omran said.
It was also reflected in the rise in stock indexes at 108 percent since June 2013, and 44 percent since the beginning of this year, he added.
“We are excited to continue working and accomplish more over the coming period,” Omran said, vowing to cooperate with all relevant bodies to attract more investment in the Egyptian economy.
