Ahmed El-Sheikh:
- Establishing common grounds for the rules and regulations of Arab stock exchanges as a means to pave the way for integration.
- Inviting Arab stock exchanges to capitalize on EGX's experience in Sharia index and sustainability.
- Inviting listed companies to issue carbon credits to be listed on EGX as well.
- Inviting asset managers to establish sectoral-indexes tracking funds.
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Ahmed El-Sheikh, Executive Chairman of the EGX, delivered an opening speech at "Portfolio Egypt 2024" Forum, held under the slogan "Arab Stock Exchanges. Competition or Integration?", on Monday, September 30, 2024. He also participated in the first panel attended by the heads of Abu Dhabi, Qatar and Jordan stock exchanges, titled "Opportunities for integration and bridging gaps".
El-Sheikh's speech emphasized that the nature of relationships between the Arab financial markets is "integration" rather than competition.
In light of the international competition to attract investments, especially amid geopolitical tensions in various regions, including our Arab region, the ability of the Arab financial markets to attract international investments has become a cornerstone in their development and growth. Therefore, the exchange of professional and technical expertise and unifying efforts among Arab stock exchanges have become essential. Each of our Arab countries possesses competitive advantages that, if integrated, could enhance the Arab world as a cohesive entity across all fields.
He pointed out that the Egyptian economy is characterized by several factors that position it unique among the region's economies:
First: It boasts genuine sectoral diversity, with no single sector dominating the economy. Instead, several sectors most notably agriculture, industry and services hold balanced shares.
Second: It benefits from the strategic location that is considered the meeting point of the continents, and this is reflected in the tourism and Suez Canal sectors.
Thirdly: The Egyptian market is the largest in the region by population, with over 110 million residents including Egyptian and Arabs. This demographic advantage makes it one of the most accommodating markets for goods and services.
The significance of the Egyptian economy is further enhanced by the structural reforms currently underway, which have begun to yield tangible positive results.
All of this has contributed to placing The Egyptian Exchange (EGX) in the spotlight both regionally and among emerging markets, due to its growth potential, particularly its sectoral diversity, which encompasses 18 sectors; reflecting the diversity of the Egyptian economy. Additionally, EGX benefits from cumulative experience that extends across several generations, dating back to the 19th century.
El-Sheikh stressed that EGX has developed a strategy that reflects its belief in its vital role in the national economy and regional leadership for about 140 years. Accordingly, EGX's Board of Directors approved in January 2024 its plan for the coming period, which includes in its sixth pillar a special section on international relations that encompasses EGX's participation and presence in international federations, most notably the Union of Arab Stock Exchanges, to exchange expertise and information and work to promote investment in the Egyptian market, and strengthen ties and cooperation with international and regional stock exchanges to include the exchange of information and expertise, developing joint projects, adopting best practices, and signing cooperation agreements with these stock exchanges. From this standpoint, we urge Arab stock exchanges to consider unifying the rules and regulations governing operations and trading system among them, starting with the establishment of unified foundations and principles governing the following:
First: Listing companies on the Arab stock exchanges, as along with disclosure rules.
Second: Trading operations and mechanisms on the Arab stock exchanges.
Third: Membership rules and operational mechanisms for brokerage firms.
Fourth: Mechanisms and rules of clearing and central deposit companies and custodian banks.
Fifth: Mechanisms and rules for registering investors and opening accounts (KYC).
Sixth: Tax policies applicable to Arab stock exchanges.
Seventh: Trading systems and trading surveillance systems.
All of this will pave the way for making the Arab financial markets more interconnected and facilitate mutual investment operations among them.
El-Sheikh also encouraged Arab stock exchanges to leverage the expertise of EGX in the following areas:
-First: Launching the EGX33 Shariah Index, the methodologies for calculating the index and its tracking mechanisms.
-Second: EGX's Sectoral indices, their calculation methodologies and tracking mechanisms, especially real estate, banking and communications indices.
-Third: The carbon credits trading system, as EGX encourages listed companies to achieve sustainable growth and issue carbon credits.
