The Egyptian Exchange Investors' Summit Report

Transcription

1 The Egyptian Exchange Investors' Summit Report

2 EGX Investors Summit Report The Egyptian Exchange (EGX) held EGX Investors Summit for the second consecutive year under the auspices of the Prime Minister, Eng. Ibrahim Mahleb. The annual summit focuses on two main pillars; the first is activating the stock exchange s role in enhancing the Egyptian economy via supporting the companies in getting funding through the stock market. This helps the companies capital increases and helps them to grow. The second pillar focuses on attracting more investments through facilitating the necessary liquidity for funding. The summit introduced the results of the previous summit; it attracted 20 new companies to list on the Egyptian Exchange with a total paid in capital about LE 5.7 billion which is considered one of the highest in a long period. It also assisted 50 companies to execute capital increase of about LE 9 billion. The major IPOs were back with values of about LE 4.4 billion and during the upcoming days LE 2.7 billion will be added. 1

3 Summit Premise & Date Cairo, 9 June 2015 at the Four Seasons, Nile Plaza Hotel Attendees There were more than 500 attendees on top of them was H.E. the Prime Minister, and the Minister of Planning, Minister of Housing, Utilities & Urban Communities, Minister of Supply and Domestic Trade, Minister of Social Solidarity, and Minister of Investment, in addition to a large number of representatives from companies along with local and international investment banks. The summit also witnessed the participation of Egyptian business associations as well as officials from the Arab stock markets on top of them NASDAQ Dubai. 2

4 Challenges Companies low awareness of the importance and the advantages of lisitng on the stock exchange. Inadequate mental image about the stock market and the low awareness of the stock market s main role in supporting the economy within the society. This results in the society s low degree of investment in the stock market. The increase in the regional competition of the capital markets to seize liquidity and listing of companies and to provide great facilities for investors and companies, especially from countries of competitive economic position. The urge to restore the confidence of foreign investors and institutions as well as resolving the faced obstacles to restore liquidity in the market. Despite the availability of the NILEX, the medium and small companies have not acquired the full benefit of the market through lisitng as the process in requires time and cost to restructure the companies to comply with the lisitng requirements. Agenda The Summit included 3 main panels in addition to the opening session during which H.E the Prime Minister, the Minister of Investment, the Chairman of EFSA and Chairman of EGX commenced by their opening speeches at the summit. H.E the Prime Minster presented his opening speech during which he asserted the importance of the role EGX plays in the economic development. He also assured the government s persistance to support the private sector and assisting it to expand and grow; in addition to supporting the public portfolio and re-launching it to benefit from its potential through the stock exchange where it re-establishes and funds the governmental enterprises. Meantime, Mr. Ashraf Salman, the Minister of Investment, affirmed the last period witnessed major initiatives from the government to support the business sector. He highlighted that the growth rates had increased while the unemployment rates and 3

5 deficit has decreased assuring that a lot is still required to attain the proper achievement that is suitable for the capabilities of the Egyptian economy. Mr. Sherif Samy, EFSA Chairman declared the approach of launching new financial tools like the pledged bonds, sukuk, unrated bonds, wakf funds that aim at assisting the business society in providing the necessary funding. From his side, Dr. Mohamed Omran, EGX chairman assured in his speech that the society is now aware of EGX role, and that its main role is to fund companies, consequently creating more job opportunities for the society. He also asserted that the stock exchange funded more than LE 100 billion during the last decade, in addition to around LE 9 billion during the past few months. The Minister of Supply and Domestic Trade, Minister of Social Solidarity, and Minister of Transportation participated in the first panel where Dr. Khaled Hanafy, Minister of Supply, stated that the study of offering the Holding Company for Food Industries in the stock exchange is still a highly recommended preference. It needs legal study and restructure for the subsidiaries, assuring that this is a very important step for getting finance that allows the re-birth of the stagnant assets of the governmental institutions. He added that the projects of the commercial and shopping city and the logistics center are among the ministry s investigation for different means of finance one of which is the stock exchange. 4

6 Ms. Ghada Waly, Minister of Social Solidarity, added that the return on investment of the social insurance in the stock exchange reached an average of 24% annually during the last decade compared to 9.5% only on the treasury bonds, which is more than the double. She asserted that social insurance does not speculate but depends on the long term investment emphasizing that the volume of the social insurance investments in the stock exchange does not exceed 2% compared to not less than 13% in the region and 50% in the developed countries. Mr. Mahmoud Gamal El Din, Consultant of the Minister of Transport, added that the ministry requires annually USD billion to fulfill the major projects such as underground and speed train which requires diversified means of finance one of which is the stock market. The second panel introduced the case studies of many of EGX listed companies, where one of the automotive companies stated that listing on the stock market not only did it provide the funding of billions but also raised the confidence level of the investors and partners. It also facilitated the attraction of the foreign investors and founders from all over the world. The final panel, incorporated representatives from investment banks and foreign investment funds, introduced the means of attracting foreign investments to the market. The speakers asserted that the overall perspective of the Egyptian economy is positive and helps in attracting more foreign investment specially with the steps that the Central Banks of Egypt has done to solve the problem of the foreign investors transfers. 5

7 Summit s Results Clear announcement of the government s responsibility and its approach to restructure and fund the public companies through the Egyptian Exchange in addition to funding the major projects through IPOs. In addition to the social awareness about the real role of the stock exchange, the conference witnessed holding many meetings between the potential companies that intend to list and many of the investment banks in order to take serious steps to list and carry out an IPO on the stock exchange. Informing the society of the return on the social insurance in the stock exchange (average of 24% annual) as well as the low amount of the social insurance investments in the stock exchange (2%) compared to 13% regionally. Due to the need for more discussion for the small and medium capital enterprises to benefit from the stock market, there is an approach to hold new conference for this sector (NILEX). Media Coverage The Summit witnesses wide media coverage from the local, regional and international media. Also, some panels of the summit were live on many TV channels. 6

8 Sponsors EGX Management thanks the sponsors who cooperated for the success of this event. PIONEERSHOLDINGCO. TM 7