Atef El-Sherif, the new chairman of Egypt’s Stock Exchange, has identified the revival of liquidity and increased market depth are the stock market’s top priorities, in addition to addressing the problems faced by businesses and investors.
In his first statement in the post, the chairman said that other goals include reviving the role of the Nile Boursa as a “launching pad” for financing that could be provided to new small and mid-sized level development projects, in addition to maintaining and improving lines of communication with all relevant market based parties throughout the coming months. He stated that he believed that pursuance of such policies would serve as the cornerstone for future strategic development.
El-Sherif further emphasised the need for society to recognise and realise the true role of the stock market as the primary source of aid and funding for companies seeking to achieve growth in the market. He called on investors to put money into the stock exchange, in order to better prop up the national economy, saying that the stock exchange can provide upwards of EGP 15bn in funding a year to Egyptian companies. Despite that, investment in the stock market has been minimal. El-Sherif did, however, point to efforts made by Egypt’s Finance Minister to support the sector, promising to help investors and businessmen overcome obstacles faced on the road to development.
He stressed the need to release increased amounts of liquidity throughout the Egyptian market, and to involve all concerned parties in the decision-making process with regards to such issues. Such improvements will be the hallmark of the new administration he said, which is “keen to revive investor confidence in the market and take serious steps to correct any problems faced by those operating within it over the last several years.” He further emphasised the need for stock market officials to be more aware of the effects of the decisions they make by consulting often with the country’s professional organisations.
He stated that he would also seek to strengthen Egypt’s over the counter (OTC) market mechanisms, saying that the new administration was in the process of concluding a new comprehensive study to prepare new legal foundations for OTC markets in a number of countries throughout the world, adding that the administration would seek to better restructure the market in order to identify specific times when transfer of ownership certificates could be issued.
El-Sherif went on to extend his thanks to the previous administration of Egypt’s stock exchange, led by former Chairman Muhammad Amran, and Vice Chairman Khalid al-Nishaar. He stated that the new administration and its members, who possessed a wide range of skills and various forms of experience, would work to continue the efforts of the previous administration in order to strengthen the market.
He said that he sought to focus on the role that could be played by Egypt’s stock exchange in working to strengthen the country’s relationship with foreign nations, particularly those in Africa located along the Nile Basin. He stated that the country’s stock exchange could play a large role in working to strengthen and improve these relationships.
He also stated his desire to reach agreements with Arab, regional and international stock exchanges and financial institutions, particularly on issues related to double entry bookkeeping systems, a fact which could have a positive effect on liquidity rates seen within the market.
He also emphasised the need to rethink the ways in which the stock exchange interacted with local and regional media outlets, and the potential for such outlets to provide outreach for the stock exchange and change society’s perceptions regarding investment.
Ashraf Kamel, Vice Chairman of Egypt’s Stock Exchange, said that the new administration is keen to study and review the legislative system governing Egypt’s financial markets, and restructure them in a way that is compatible with developments in international markets, and would work best to protect the rights of investors. He discussed ways to restructure and improve regulation within the market to make it more accommodating to investors. He further discussed his desire to make the Nile stock exchange the platform from which financing could be provided for small and mid-sized projects throughout Egypt, making the stock exchange the primary engine of growth for economic activity over the coming months and years.
Kamel added that he was also in the process of reviewing and studying the state of companies whose stock shares had either been discontinued or written off from being traded. By engaging in such a process, he said he hoped that necessary logistical aid could be better provided to such companies in a way that was compatible with legal precedents and in line with the desires of shareholders.
He added that both foreign and domestic advertising campaigns for the stock exchange would be renewed after having been stopped over the previous months and years, calling on media outlets and society at large to help promote investor advertising campaigns in order to strengthen Egypt’s local financial markets.
Translated from Al-Borsa Newspaper