Research Into The Egyptian Stock Exchange Finance Essay

The stock exchange of Egypt is situated in Cairo, Egypt. The Egyptian Stock Exchange ( EGX ) is one of the oldest stock markets established in Middle East, who traced its beginning from the amalgamation of two stock exchanges in Egypt viz. , Alexandria Stock Exchange which was established in 1883 and Cairo Stock Exchange established in 1903, now known as Egyptian Stock Exchange which was once known as Cairo and Alexandria Stock Exchange ( CASE ) . Both exchanges were really active in 1940s, and both the exchanges combined were ranked 5th in the universe. The vision of Egyptian Stock Exchange is “ To be a First, Egypt-based exchange: which would function best to its stakeholders in the Middle East and North Africa part. ” ( The Egyptian Exchange, 2010 ) . As every stock exchange has certain values and responsibilities, the EGX besides has system of values which have a common denomination of moralss practiced with every person whether it is client, members, issuers, local investing communities, employees and regulators. The Chairman, Mr. Maged Shawky is the caput of the Egyptian Stock Exchange. ( The Egyptian Exchange, 2010 ) . The exchange has merchandising session from 10:30am to 2:30 autopsies on all yearss except Fridays and Saturdays and vacations declared in progress by the Exchange.

Measure of Activity

The chief public presentation index or step of activity of Egyptian Stock Exchange ( EGX ) is EGX30, which was antecedently known as CASE30 index. It includes the top 30 companies in footings of liquidness or 30 most active companies in the Egyptian Stock Exchange. The CASE 30 was started with base value of 1000 points on January 2, 1998 and was renamed to EGX 30 on March 1st, 2009. Any company to acquire listed or to acquire included in EGX30 must hold a 15 % free float. ( The Egyptian Exchange, 2010 ) .

Tendencies in Egyptian Stock Exchange

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Egypt has a long and rich history of fiscal market. In late 1980s, Egypt had a sophisticated fiscal construction keeping a mature stock exchange in both Alexandria and Cairo. ( Wilson, 1995 ) . The Egyptian Stock market has experienced several cardinal alterations during major periods such as from 1888-1958, 1959-1971, 1972-1992, and 1992-present. Egyptian stock market was really mature and singular at earlier stages of its operation ; in 1940s both the exchanges were really active. In 1959-1971 stages the stock exchange left its effectual operations due to the intercession of authorities policies and limitations. ( MohieEldin, Sourial, 2000 ) . After high intercession of authorities, there were several efforts made to better the working and effectivity of neglecting Egypt stock market which continued to stagnate. In 1990s the Egypt stock market went under important resurgence of authorities liberalisation policies and eventually in 1997, major alterations were made in Egypt stock market that reformed the stock market and several of import stairss have been taken by authorities to overhaul the stock exchange. The Egyptian Stock Market has significantly grown by 40 % per twelvemonth since the 1997 reforms and in May, 2001 it reached $ 36.7 billion. ( AMF, 2001 ) . In the current state of affairs of Egypt Stock market, the monetary values of portion fell down on Monday and EGX30 index fell by 3.84 per centum with the shutting of stock market ( AFP, 2010 ) . With the losingss on two back-to-back yearss the Egyptian Stock Exchange rose on Tuesday with an addition of 2.1 per centum in the EGX30 deriving 140 points near to 6659 and the monetary values of portion jumped to 3.5 per centum ( Egypt News, 2010 ) .

Egypt Stock market History

The Egyptian Stock exchange is one of the oldest stock exchange which was established in the Middle East. In early times Egypt had two stock exchanges viz. Alexandria Stock exchange which was established in 1883 and so Cairo Stock exchange in 1903. The Alexandria hereafter ‘s market was one of the oldest market in the universe. The first dealing which took topographic point in 1885 was of cotton in Alexandria ‘s cafe de l’Europe, which was later, named as Mohamed Ali Square. At that clip Reputation was everything and timing and dependability was considered to be of import if the net incomes were made on regular footing. There were two respected establishments which were affiliated with the International Cotton Congress. At an informal meeting in the early 1900s, the Monsieur Maurice Cattaui reminded the merchandisers and agent that there should be stocks exchange in Cairo same as of Alexandria. The official central office for Cairo stocks exchange was chosen to be the old premiss of Ottoman Bank. In 1928, the Cairo stocks exchange moved into its present premiss Sherifien Street. In July 1961, the two stock exchanges merged into Cairo and Alexandria stock exchange which was ranked fifth in the universe in footings of market capitalisation. ( The Egyptian Exchange, 2010 ) .

Currency and its History

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Beginning: Google Images

The official currency of the Egypt is Egyptian Pound ( Geneih ) normally written as L.E. Earlier Egypt was portion of the Ottoman Empire until the Gallic business took control in 1798 and subsequently on by British in 1801. In early 1900s the Egypt was made a British associated state. In 1922, the Egyptian land was declared and on November 14, 1936 Egypt gained its full independency. From 1958-1961, Egypt was untied with Syria, as a portion of United Arab Republic. In 1834, the fiscal system was reformed by Mohammed Ali, puting 1 Egyptian Piastre/Qrish divisible into 40 Para and equal to 1/100 Pound. On November 14, 1985, the Gold criterion was adopted and in 1898, the National Bank of Egypt started publishing Bank Notes but they were non legal until 1914. In 1961, Central Bank of Egypt took control and became the ultimate authorization of publishing note and they started publishing some little denomination notes ( Global Financial Data, 2010 ) . The Egyptian Pound was pegged to the US dollar until 2000 and cardinal bank of Egypt was forced to devaluate the Egyptian Pound due to several economic crisis in Egypt. From 2000-2003 the value of Egyptian Pound felt about to 50 per centum. The paper money of Egypt has two faces ; an English face and an Arabic face and there are different images on each faces. The Arabic face has images of mosques in Egypt while the English side has Pharaonic scene. The coins are by and large made of Ag and Cu and the coins have images of pyramids on one side and value denomination on the other side ( Egyptvoyager, 2000 ) .

Banking

The banking sector of Egypt is one of the well-established portion of the economic system and the first bank in Egypt was dated back in 1920s and expanded markedly in 1970s by their so called unfastened door policy ( AmCham Egypt, 2010 ) . The Central Bank of Egypt is the regulating organic structure of the banking sector in Egypt, which comprises of 11 Investment Bankss, 24 commercial and joint venture Bankss, 15 subdivisions of foreign Bankss and 3 specialised Bankss ( HSBC, 2001 ) . There has been uninterrupted growing in the one-year growing in sedimentations and assets. By June 2004, the ROE and ROA of Egyptian Bankss rose to 9.8 % and 0.5 % severally. The Egyptian banking sector is bettering with clip and has gone assorted reforms in the signifier of M & A ; A, denationalization from 1991 up to today. ( AmCham Egypt, 2010 ) .

Egyptian Currency Exchange to USD

The Egyptian Pound is the official currency in Egypt and its symbol is ?E. The Current transition of Egyptian Pound to US Dollar.

Mathematically,

5.50 Egyptian lb per 1 USD. ( Indirect Quote ) ( CoinMill, 2010 )

0.18 USD per 1 Egyptian lb. ( Direct Quote ) ( CoinMill, 2010 )

Business Practices

In the Egyptian concern civilization, the key to making concern good is forbearance. Initial contacts sing concern are really of import and they frequently mean the difference between success and failure. Egyptians are little more concern on the portion of trust and cognize how i.e. why they largely do the concern that they know or trust, for this ground before practising any concern in Egypt 1 should hold a go-between or a representative who can help in meeting and Acts of the Apostless as go-between ( CIA World Fact Book, 2007 ) . As there is diverseness in civilization of every state, there are certain Do ‘s and Don’ts while practising or get downing or making a concern in Egypt which must be followed.

Do ‘s

Before making concern, make assignments which should be scheduled either in written or over telephone a hebdomad before the assignment. ( CIA World Fact Book, 2007 ) .

Keeping an oculus contact with the Egyptian opposite number, particularly with male co-worker is a mark of truth and honestness. ( CIA World Fact Book, 2007 ) .

Always wait for your Egyptian concern associate to originate the salutation at first meeting.

Addressing Egyptian opposite numbers with their rubric followed by their family name is profoundly appreciated with pride. ( CIA World Fact Book, 2007 ) .

While making a concern faultless visual aspect is of import. Male concern visitants should have on suits with neckties on most juncture.

Don’ts

Rushing or coercing the Egyptian concern opposite number while doing speedy determination can sometimes proves to be uneffective. ( CIA World Fact Book, 2007 ) .

If, Egyptian concern associate stands really close to you and speak so do n’t acquire surprised and do n’t seek to acquire back as this would make a bad feeling and may take to offence.

Asking elaborate inquiry about their household members is considered to be inappropriate, particularly household members. ( CIA World Fact Book, 2007 ) .

Avoid puting up meetings during Ramadan.

Get downing a concern in Egypt

While get downing a concern or a house in Egypt, one has to travel through the legal and bureaucratic hurdlings. There is a certain process which has to be followed while registering a new company or a house. ( World Bank Group, 2010 ) .

The first and first measure in get downing a concern is to obtain a legal certification from a well-known authorised bank, which might be EGP 300 and take up to a twenty-four hours to acquire the certification in manus.

Following measure is to lodge the paperss to the section of companies, which are viewed by a attorney and a elaborate bill of all the fees is issued.

Third measure is to acquire the articles of association registered and notarise the company ‘s contract.

After the articles are registered, the authorization so issues a certification advising the constitution of the company ; this procedure might take up to 24 hours.

Once the company gets establishment certification, the company completes the revenue enhancement enrollment procedure.

Last measure is to acquire the employees registered with the National Authority of Social Insurance. ( The World Bank Group, 2010 )

Negotiation Practices

Egyptian concern people are largely experienced in making concern and interacting with foreigners. While negociating with these people one thing should ever be kept in head is that the people here expects the things to be done in their manner. ( Katz, 2008 ) . There are some negotiating patterns while making a concern in Egypt:

Leveraging relationships is a cardinal component while negociating in Egypt and Egyptian concern people ne’er look for state of affairss like win-win. ( Katz, 2008 ) .

Pace of dialogue is slow and drawn-out and frequently negotiation determinations are made in unit of ammunitions instead than at a tabular array. ( Katz, 2008 )

Information is non shared freely as Egyptians think sharing information can make bargaining advantages. ( Katz, 2008 )

Egyptian business communities are really smart at utilizing delusory techniques and are frequently use them.

Beginnings

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AMF. ( 2001 ) , The database for Arab fiscal markets, pp. 51-55, AMF: Abu Dhabi

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Coin Mill. ( 2010 ) , retrieved from,

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Egypt Voyager. ( 2000 ) , retrieved from,

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Global Financial Data. ( 2010 ) , retrieved from,

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Google Images. ( 2010 ) , retrieved from,

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HSBC Investment Bank. ( 2001 ) , Treasury and Capital Markets: Guide to Egypt

Katz, L. ( 2008 ) , Negotiation International Business- The Negotiator ‘s Reference Guide

to 50 Countries Around the World

Mohie, E. M, Sourial, M.S. ( 2000 ) , Institutional Aspects, Distributional features and efficiency of Egyptian securities markets ; recent tendencies in Arab stock markets: Recent tendencies and public presentations, pp. 1-44, Cairo: AVC imperativeness

World Bank Group. ( 2010 ) , retrieved from,

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