In a historic step targeting deepening the market and enhancing liquidity levels, EGX Chairman, Dr. Islam Azzam, announces the official launch of financial derivatives market during an extensive conference. The conference held at EGX headquarters, with the participation of Dr. Mohamed Farid Saleh, Minister of Investment and Foreign Trade, via zoom; in the presence of Mr. Mohamed Elsayyad, Vice Chairman of Financial Regulatory Authority; Dr. Ahmed AbdelAziz, Vice Chairman of Financial Regulatory Authority; Mr. Mohamed Sabry, EGX Vice Chairman.
During his opening speech, EGX Chairman explained that this launching time is chosen to align with the usual scheduled time for starting new activities at the beginning of the month. He pointed out that if not implemented during this period, the launch was to be postponed till next June.
He clarified that commencement of trading in financial derivatives market targets in its first phase Future contracts on EGX30 Index with maturity 3 and 6 months. Besides a plan to expand later adding derivatives on EGX70 Index, and then future contracts on stocks, according to the technical and operational readiness levels. This will happen through integrated technological systems including trading and settlements systems, which were both developed internally 100%, reflecting EGX full technical independence in managing and operating its infrastructure.
EGX Chairman, Dr. Azzam emphasized that launching derivatives market represents a historic step aiming to deepen the market and increase liquidity levels, through providing future contracts. This enables investors to hedge and manage regular risks, according the best global practices, contributing to attract investments and increase liquidity turnover rates.
His excellency Dr. Mohamed Farid Saleh, Minister of Investment and Foreign Trade, emphasized in his speech via zoom that this day marks a historic milestone in the journey of the Egyptian financial market and economy. He pointed out that launching the first trading day of financial derivatives comes after completing the legislative and regulatory frameworks, as well as obtaining the license from The Financial Regulatory Authority, allowing the actual activation of this vital market.
He clarified that launching derivatives market represents a qualitative step towards enhancing investment environment in Egypt, through providing effective tools for hedging and risk management, enabling various categories of investors to deal with market fluctuations efficiently and professionally. He also pointed out that launching Future contracts paves the way for the activation of new financial mechanisms, among which is hedge funds and short selling, supporting market’s efficiency and enhancing investors’ protection.
As part of the conference, EGX Chairman presented practical demonstration during the trading session tracking the trading order since the moment of entering it on the system screen, passing by real-time matching mechanism, and ending by immediate execution on the clearing and settlement systems and information dissemination screens. This proves the full technical readiness and operational stability. He also explained the integration of roles between: Taswyaat Clearing Services, the company responsible for real time clearing, settlement and risk management; Egypt for Information Dissemination (EGID), the developer of the trading platform; besides EGX technical team, which created and secured the infrastructure, ensuring the technical connections with brokerage firms.
EGX Chief Technology Officer, Eng. Ahmed Attia, explained the stages of establishing the project’s infrastructure from design to operation, clarifying the role of networks, cybersecurity, and technical connections teams in establishing integrated system according to the highest global technical standards.
Eng. Yasser Elalily, EGID CEO, discussed the role of the trading platform in managing future contracts trading efficiently and rapidly, as well as the mechanisms of smart connections with brokerage firms and information dissemination systems, ensuring full transparency and accurate execution.
In the same context, Eng. Khaled Amer, Taswyaat CEO and Managing Director, clarified that derivatives market represents a qualitative leap in the journey of developing the Egyptian financial market, resulting from integration of the efforts of all concerned entities establishing comprehensive technical and regulatory framework as per the best global standards. He explained that the company has a pivotal role in the market system through implementation of clearing, settlements and risk management via advanced systems, ensuring adequate collateral and real time Mark-to-Market position evaluation, enhancing market’s stability and protecting rights of all parties.
Finally, EGX concluded that launching derivatives market represents a new phase in the history of the Egyptian financial market, enhancing its institutional depth, increasing its investment attractiveness, and supporting state’s direction towards developing the financial market according to the latest global systems and standards.
