FEDERATION OF EURO-ASIAN STOCK EXCHANGES > YEARBOOK 2002/2003 > PAGE 31
CAIRO AND ALEXANDRIA STOCK EXCHANGES
LETTER FROM THE CHAIRMAN
The year 2001/2002 witnessed the culmination
of a number of long-awaited projects by market
participants.
The year 2001/2002 witnessed the
culmination of a number of long-awaited
projects by market participants. In brief these
were: the publication of the CASE strategic
plan for the next three years; the
implementation of the new listing rules,
which emphasize timely information
disclosure, transparency and good corporate
governance practices by the issuers; re-
organizing the Over-the-Counter Market; the
removal of the price ceiling on the most active
shares; and draft proposals for new
membership. Besides these projects, we have
not neglected our ongoing emphasis on
investor awareness, training and information
dissemination.
operators of stock exchanges around the
world are struggling to cope at these difficult
times in order first to restore the confidence
of investors and then to remain viable engines
for economic growth. We at CASE plan to
do this by continuing to insist on having
strong brokerage firms, quality issuers, and
well-regulated markets to ensure that our
markets support disclosure, transparency,
fairness and efficiency.
There have been a number of globally
significant events in the past year. These
include increasingly diminishing values in
the global capital markets mainly due to the
sharp decline in the prices of the
technology/dot.com sector; the devastating
corporate scandals including Enron,
WorldCom and Global Crossing that shocked
investors worldwide and forced the US
government to change its disclosure,
reporting and fraud rules. Accordingly, Chairman
(CMA) played an instrumental role in initiating
and leading the effort for the revival of the
Egyptian stock market. In mid-1997, the
Exchange started its modernization plan that
included an overhaul of its trading system, listing
and membership rules, OTC trading, and investor
education. counter (OTC) market rules for trading unlisted
shares that do not meet the listing requirements;
and the removal of the 5% price ceiling on the
12 most active stocks traded, together with a
reduction in their settlement period through the
Misr Clearing Settlement and Depository to T+2
versus a previously implemented T+3.
In early 2002, the CASE finished formulating its
three-year strategic plan aimed at raising the
Egyptian capital market and equipping it for
integration into global markets and assuring a
leading role in the region. The three-year plan
emphasizes four main objectives for the CASE:
enhancing liquidity, efficiency, transparency and
fairness in the Egyptian market. With respect to information dissemination and
public awareness, the CASE has established a
company “Egypt for Information Dissemination
Company” (EGID), which started disseminating
information in the third quarter of 2001.
Moreover, the Exchange held its first interactive
exposition “Borsa Step X Step” last October 2002,
linking the public with the main capital market
players.
Dr. Sameh Y. El-Torgoman
HISTORY AND DEVELOPMENT
The Egyptian Stock Exchange is comprised of
two exchanges: the Cairo and Alexandria Stock
Exchanges (CASE), and is governed by the same
board of directors that share the same trading,
clearing and settlement systems. The Alexandria
Stock Exchange was officially established in 1888
followed by Cairo in 1903. The two exchanges
were very active in the 1940s, when the Egyptian
Stock Exchange ranked fifth in the world.
Nevertheless, the central planning and socialist
policies adopted in the mid-1950s led to the
demise of activity on the Exchange, which
remained dormant throughout the period
between 1961 and 1992.
In 1990, the Egyptian government started an
economic reform and restructuring program.
The move towards a free-market economy has
been remarkably swift and the process of
deregulation and privatization has stimulated
stock market activity. In the period between
1992 and 1996, the Capital Market Authority
In 2002, the CASE enacted new regulatory
reforms including the implementation of new
listing rules aimed at improving corporate
governance and disclosure practices for all listed
securities; the modification in the over-the-
FUTURE OUTLOOK
To be one of the leading exchanges in the MENA
Region by:
1. Continuing to provide a well-regulated and
transparent market.
2. Attracting new local and regional investors.
3. Enhancing the accessibility of the Egyptian
capital market by building regional links, signing
additional cooperation agreements and pursuing
integration with both regional and international
exchanges.
To enhance the regulatory framework by:
1. Working to achieve efficient listing and
membership rules in the region.
2. Continuing to improve corporate governance
and disclosure practices of listed companies
under the new listing rules administered by the
CASE in August 2002.
3. Increasing the market professionalism and
discipline of licensed brokers through new
membership rules and the establishment of a
membership committee.
4. Establishing a listing committee at the
Exchange.
5. Investing further in the development of the
arbitration process.
To develop new products and services such as:
1. A bonds market and the establishment of a
primary dealers system.
2. Implementation of margin trading to activate
the market.
To develop in education by:
1. Continuing the organization of education and
training programs for market participants and
professionals, as well as university graduates.
2. Continuing to publish educational brochures
and leaflets for individual investors that tackle
various issues of interest, such as basics about
equity investment, bonds, mutual funds, and
brokers.