EGX Board Discusses Stock Market Developments And Suggestions For Recovery From Market Parties

The Egyptian Exchange (EGX)’ board met yesterday, January 19, 2016 to discuss the developments that have affected the financial markets globally and regionally, and the impact on the local market during the recent period, where the board stressed that although the external conditions impose a pressure on the local and foreign investment flows, but it is important that investors wait a bit in taking  decisions and deepen their outlook with regard to the companies’ financial basics, where the board pointed to the importance of EGX’ request from the listed companies to rapidly announce the financial statements of 2015 to enable investors to identify clearly the companies’ economic status.

On the other hand, within the context of approaching with the market’ parties, the board discussed during the meeting a number of proposals submitted by a number of investors’ associations based on a survey for investors and brokerage firms, the board stressed on the importance of taking these views into account, given that some of those proposals have been already implemented earlier such as the decision to amend the time needed to approve the treasury shares, in addition to the efforts performed to attract the governmental companies to the stock market.

With regard to the associations and investors’ proposals to call companies for early financial disclosure for the year 2015, Omran pointed that the board explained that EGX formally took that step from several days through official correspondences with the listed companies.

The board also ensured the importance of the proposals that include addressing the  governmental agencies to speed up the introduction of new mechanism to authorize the records, associations and decisions taken by the listed companies that are ratified by the governmental agencies.

On the other hand, the board approved the proposed reduction of the burdens imposed on brokerage firms in order to overcome the current situation and to preserve the workers in those companies, where it decided to reduce the burden by 15% on temporary basis during the year 2016 until the situation improves again, and the board noted that EGX’ response gives a clear message that it deals  with brokerage firms as an essential partner in the capital market system and focus on maintaining the market and the brokerage firms in crisis time.

In a related context, Dr. Mohammad Omran, EGX chairman, said that the board appreciated the state’ announcement about the orientation to offer a number of governmental companies and banks in the Egyptian stock market, stressing that this is a strong message from the government that it understands the capital market’ importance of and its role to facilitate financing companies through it,  he also noted that this approach helps significantly to deepen the market and restore investor confidence. Omran said  “In my opinion, it is an important step at this time, and one of the best economic trends over the past years.”