Egypt's Stock Exchanges need new companies to reactivate the market
Egypt, Economics, 4/2/2002

Chairman of Egypt's Stock Exchanges (ESE) Sameh El Torgoman said that the floating of any new company for sale will reactivate the ESE and the stock market.

He said there is no relationship whatsoever between the privatization program and putting up for sale the oil, electricity and telecommunications companies.

The entry into the stock exchange by those companies is left for the companies themselves to select the best timing, he said, adding that some companies are subject to foreign circumstances such as the Telecommunication Company, where telecommunications companies are suffering from low demand.

In recent statements, A1 Torgoman said that the main reason behind the activity of ESE in the wake of the Corban Bairam is attributed to the improvement of economic figures in Egypt, after the convening of the Donors Conference and the big confidence expressed in the Egyptian economy.

He said that the past period witnessed remarkable activity in purchasing bonds, as investors have shown confidence in this kind of investment which accounts for nearly 60 percent of the volume of transactions.

He said the stability of the exchange rate is positively reflected on the stock exchange and on foreign investments, whether Arab or non-Arab. He referred to the tendency by foreign investors to purchase stocks after their recent tendency towards selling, saying that decisions on selling and purchasing are based on purely economic figures and not on emotions.

AL Torgoman said that companies violating the new registration rules will be severely punished, adding that any company which is not committed to the rules of disclosure and transparency and does not publish its budget, will be either deleted or fined in order to guarantee the rights of investors in the stock exchange.

He said the Ministry of Foreign Trade is currently considering new amendments in the Capital Market law which will give the ESE more powers in maintaining control over it.

AL Torgoman added that junior investors should take their decisions on investment after consulting genuine experts in this field, adding that prices are extremely encouraging for the entry of new investors into the stock exchange.

He said that problems have completely disappeared after the application of the new central deposit law and after customers' deposits were transferred from brokerage companies to Misr Company for Clearance, settlement and Depository. He said these assert would move to banks next May.

Many closed companies have turned into general subscription ones, he added. These companies are finding a high demand as the reason behind the backtracking of demand was motivated by the lack of liquidity.

"There is a pressing need for having new companies which could move the market and attract investors," Torgoman concluded.

Previous Stories:
  Four axes to develop Egyptian stock exchange activities   (3/12/2002)
  Egypt's growth rate to hit 2.5 per cent in 2002   (2/19/2002)
  Egyptian economy sound, despite looming recession   (2/5/2002)

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