Egypt’s stock exchange has signed a license agreement in London with the NYSE Liffe, the European derivatives business of NYSE Euronext, allowing the listing of an EGX 30 futures contract on NYSE Liffe London. Ideas were also discussed to soon begin listing and trading stock options on the same index.
The signing was attended by an official Egyptian delegation led by Minister of Investment Osama Saleh, accompanied by the Chairman of the Egyptian Stock Exchange Mohamed Omran.
This agreement is the first of its kind when it comes to joint cooperation between the NYSE, Euronext and an Arab/African stock market exchange in trading future derivatives. Many hope that this agreement will help secure the role of Egypt’s stock market as a regional leader.
Saleh stated that the signing of this agreement represents a turning point for Egypt’s capital market and their level of openness to the international community, marking a new era of development for Egypt’s non-banking financial sectors. He added that the timing of the signing was important as well considering that Egypt’s economy had still not yet completely recovered from its current state of crisis. The agreement would help to restore the international community’s confidence in Egypt’s economy and its ability to achieve growth in the future.
He went on to say that the agreement would not be the last of its kind, emphasising the need to take further measures to open up Egypt’s stock exchange to world markets. This he hoped, would help transform Egypt’s stock exchange into one of the largest in the region.
Omran highlighted the importance of the agreement, saying that it would go far to help secure the confidence of the international community regarding the strength and efficiency of Egypt’s stock exchange. He added: “Futures contract on EGX 30 index will increase volumes on the underlying constituents of EGX 30 index, which will increase liquidity on EGX cash market. Furthermore, it will introduce for the first time a beneficial hedging tool for investors to manage their risks.”
This agreement he said, represented the first instance of Euronext and the NYSE cooperating with an Arab stock market in the listing and trading of derivatives. Omran further went on to express his sincere appreciation for the NYSE and Euronext for their cooperation with the Egyptian stock exchange, adding that he hoped that all parties would soon engage in more joint cooperation projects in the future.
Roland Bellegarde, executive vice president of European Equities and Equity Derivatives at NYSE Euronext, said: “We are delighted that EGX selected NYSE Liffe as its European derivatives partner to internationalise the EGX 30 index. The Exchange is committed to developing and offering a broad suite of derivatives contracts that meet the trading requirements of our customers and community.”