Mohamed Reda, CEO of SOLID Capital-Egypt, asserted that the Egyptian Exchange (EGX) had an effective role in African Exchanges during recent years, creating transforming experiences. This is why Mohammed Omran, chairperson of the Financial Regulatory Authority (FRA) and former chairperson of the EGX, has been celebrated by the African Securities Exchanges Association (ASEA) as the Man of Africa, reflecting Egypt’s positive effect on African exchanges.
“We have African investment funds that deal with direct investment tools on the EGX,” Reda said.
He noted that the EGX has been greatly developed, in comparison with other African stock exchanges, however, more progress can be achieved, he said.
“I think that the newly elected board of the EGX intends to supply the Egyptian Exchange with new development tools, but there are financial tools which are of a high-risk, this is why they need more time to study them well before making the decision on implementation,” he noted.
According to Reda, linking the EGX with African exchanges enhances cooperation between the continent’s countries, adding that dual-listing of both Egyptian and African companies grants the market the chance of having a variety of investments, a base of different investors, and much more transactions, which would in turn enhance trading volume and value, and support the market liquidity.
“To apply dual-listing for both Egyptian and African companies, we need to supply the market with more laws to control the matter,” he added, noting that this experiment succeeded between Egypt and Kuwait.
“Reducing listing costs is an effective means that can push the experiment to success,” he asserted.
Furthermore, Reda said that we can deal with similar markets, like South Africa’s exchange, to apply that experiment, pointing out that the rest of African exchanges are still emerging to a great extent, while the EGX is regarded as one of the most strong African stock markets.
“However, the circumstances we witnessed after 25 January 2011 affected the EGX and the whole economic climate negatively,” he added.
Moreover, Reda noted that the EGX is passing through a great stage of development, led by the newly elected board, starting with applying the short selling mechanism and reducing the period of halt trading time, in addition to revising the laws that manage the EGX to update them, asserting that the EGX board discusses increasing trading session time.
“I believe that the newly elected board of the EGX intends to develop it and they will work hard during the upcoming years to achieve progress and prosperity,” Reda said.