Corporate Governance in Egypt:Corporate Governance in Egypt:Im plem entation phaseIm plem entation phase

Presented byPresented byMagedMaged ShawkyShawky Sourial Sourial

Deputy ChairmanDeputy ChairmanCairo & Alexandria Stock ExchangesCairo & Alexandria Stock Exchanges

February 2005February 2005

11RO SC ExerciseRO SC Exercise

CG ’01& ’03A& A

22Listing & delisting Listing & delisting

rulesrules

33Creating incentive Creating incentive

using m arket m echanismusing m arket m echanism

44N onN on--m arket incentivesm arket incentives

& education& education

recommendations

Mar

ket

disciplin

eCreating culture in the management

Eva

luat

ion

The ProcessThe Process

23234848TotalTotal

0022N ot O bservedN ot O bserved

2266M aterially not M aterially not observedobserved

55D oesn’t ExistD oesn’t ExistPartially Partially O bservedO bserved

11112626Largely Largely O bservedO bserved

551414O bservedO bserved

2003200320012001PrinciplePrinciple

11--Com pliance with O ECD PrinciplesCom pliance with O ECD Principles

www.worldbank.org/ifa/rosc & www.cma.gov.eg

22--Listing & Delisting rulesListing & Delisting rules

Corporate Governance in Listing & D elisting Rules:Corporate Governance in Listing & D elisting Rules:

Business contracts between the company and its subsidiaries and/or any (Art. 4).

Ownership structure of the issuer (for cross-holdings and indirect controls) (Art. 4).

All transaction between the issuer and any of its shareholders (Art. 4).

The establishment of an audit committee, structure and its responsibilities (Art. 7).Comprehensive Disclosure requirements: material events, related parties transactions, BOD transactions …etc (Art. 12-19).

22--Listing & Delisting rules (cont’d)Listing & Delisting rules (cont’d)

The financial statements to be prepared in accordance with EAAS, and should be provided quarterly & annually to the exchange accompanied by the auditors’report (Art. 20-23).

www.egyptse.com

772

Number of Listed Companies vs. Market Capitalization

-

200

400

600

800

1,000

1,200

1,400

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Num

ber

of C

ompa

nies

0

50

100

150

200

250

LE

Billion

Number of listed companies Market capitalization

Enforcem ent & Im pact on N um ber Enforcem ent & Im pact on N um ber of Listed Com paniesof Listed Com panies

33--Incentives by Incentives by creating m arket m echanismcreating m arket m echanism

Criteria Criteria for considering for considering Stocks as the Stocks as the m ost activem ost active

Q ualifiedQ ualifiedFor noFor no--price lim itprice lim it

Trading Trading

M ost liquidM ost liquid&&

M ore ReflectiveM ore Reflective

During the period Jan' 04- Jan ' 05

Total value

traded

60%

The no-lim

com panies

40%

4 (A)4 (A)--N onN on--m arket incentivesm arket incentives

Establishing Institute of Directors:Establishing Institute of Directors:ArabizedArabized Curricula Curricula

Drafting Code of Corporate Governance: Drafting Code of Corporate Governance: To be adopted by the ExchangeTo be adopted by the Exchange

4 (B)4 (B)--EducationEducation

Thank YouThank You