The Visit to the Egyptian Stock Market

8/6/2019 The Visit to the Egyptian Stock Market

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Sarah Ezz El Din El Shahawy

2005/2740

The Visit to the Egyptian Stock Market

Egypt's Stock Exchange (CASE) comprises two exchanges, Cairo and Alexandria,

both of which are governed by the same board of directors and share the same trading,

clearing and settlement systems. In March 2009, the 30 largest companies being traded,

CASE 30 Index changed its name to EGX 30 Index. EGX 30 index value is calculated in

local currency terms and denominated in US dollars since 1998. EGX started publishing

its dollar denominated index on 1st of March 2009.

The Alexandria Stock Exchange was officially established in 1883, with Cairo

following in 1903. Both exchanges were very active in the 1940s, and the combined

Egyptian Stock Exchange ranked fifth in the world. The central planning and socialist

policies adopted in the mid 1950's led to the Stock Exchange's dormancy between 1961

and 1992. In the 1990s, the Egyptian government's restructuring and economic reform

program resulted in the revival of the Egyptian stock market, and a major change in the

organization of the Cairo and Alexandria Stock Exchanges took place in January 1997

with the election of a new board of directors and the establishment of a number of board

committees.

Under the chairman at that time, Sherif Raafat, the board of directors determined

to modernize the Exchange. Steps taken since then have included:

• creating a coherent organization structure with clear division of authority and

responsibilities

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• deciding to install a new state-of-the-art trading, clearing and settling system

conforming to international standards (In May 1998 a contract was signed with EFA

Software Ltd., a Canadian company, to this end)

• developing new membership and trading rules, and arbitration and dispute

resolution procedures

• Planning the improvement of the clearing, settlement and payment systems

By the end of November 1998, these efforts had started to bear fruit and there

were 833 listed companies on the Egyptian Stock Exchange with a market capitalization

of approximately L.E. 71.3 billion (up from 627 companies listed in 1991 with a market

capitalization of L.E. 8.8 billion). The exchange has normal trading sessions from

10.30am to 02.30pm on all days of the week except Fridays, Saturdays and holidays

declared by the Exchange in advance.

As for the visit, when we first arrived they took our IDs at the front desk and they

gave it back to us when we were leaving. This is the second time that I went to the stock

market with the university, the first one was for the Finance one course and this time it is

for the Financial Decision Making course. We went up stairs to a small room that has

glass windows that over look the brokers working field. This year there was a fewer

number of brokers, and most of them were just reading the newspapers, or sleeping or

chatting with their colleague. This is a big proof of the financial crisis. In both times it

was the same tour guide her name was Yasmine, she talked about nearly the same things

she talked about a year ago, she explained what the boards down stairs mean and how

they worked and she told us about the number of companies that were listed in the

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Egyptian stock market, but the only difference this time was that she added the part of the

change of the name of the stock market from CASE to EGX. One of the students asked

her about the law that says that the law doesn’t protect the foolish people and that the

ignorance of the people who invest in the stock market has affected the stock market

itself. Her answer was that they held some seminars to increase the awareness of people

about the stock market, but when he told her that most of the Egyptians who invest in the

stock market nowadays are ignorant she had no answer.

These are some of the pictures that I was able to take while I was there:

Old Stocks:

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The working field of brokers:

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The Visit to the Egyptian Stock Market