As part of its ongoing efforts to strengthen engagement with international financial institutions to support foreign investment inflows into the Egyptian capital market, The Egyptian Exchange (EGX) is collaborating with the European Bank for Reconstruction and Development (EBRD) on a project aimed at improving market liquidity and enhancing overall market efficiency. This initiative involves analyzing the liquidity situation in the Egyptian market and identifying key requirements for boosting liquidity, such as expanding the role of liquidity support institutions, including Market Makers and Liquidity Providers. Additionally, the project focuses on diversifying financial instruments and advancing trading and hedging strategies. "The importance of introducing additional mechanisms has been highlighted, including the establishment of an active and efficient securities lending framework for short selling, streamlined access to lendable stocks, and the availability of active hedging mechanisms. Additionally, the project seeks to improve brokerage firms' business models to incorporate the use of various trading strategies and multiple hedging tools on a wide range of tradable products to enhance liquidity levels in the market.
As part of this initiative, the project team conducted a field visit to Egypt to analyze the stock market. The Research findings revealed that the Egyptian capital market has a strong foundation positioning it to become one of the most advanced regulated markets in the region. This potential is supported by its robust capital market infrastructure, upcoming listing opportunities, and the scale of the Egyptian economy." Market participants have been actively engaged to gain deeper insights into the challenges and opportunities that enhance accessibility for both individual and institutional investors—both domestic and foreign alike—while promoting a dynamic, competitive market environment aligned with global best practices.
