New investment activities to reinvigorate the Cairo Stock Exchange
Egypt, Economics, 4/17/2002

Egypt plans to introduce new investment activities to reinvigorate the Cairo Stock Exchange, a senior Egyptian official said yesterday.

Abdel Hamid Ibrahim, chief of the Capital Market Authority (CMA) which supervises the stock market, said that a new investment portfolio fund would be established within a month to lure new investments into the stock market.

"The total capital of the fund will be LE200 million and three leading banks will contribute to the capital," Ibrahim said in press statements during a visit to New York to attend a conference on developing stock markets.

"In the coming period, the CMA will focus on unconventional methods to effectively activate the capital market in Egypt. New funds will positively help the Egyptian economy overcome the current slowdown," he said.

Egypt has suffered several economic problems over the past few years that have ranged from cash shortage to market recession and unstable foreign exchange markets.

Economic woes increased in the aftermath of the September 11 attacks which undermined the tourism industry, a key hard currency earner in Egypt.

Shrugging off investors worries, Ibrahim said that the capital market in Egypt was '100 per cent secure'.

"An American company working in the field of data and networking security has provided technical assistance to secure our system, which includes the CMA, the stock exchange and Misr Clearance Company," he said."Now we have a comprehensive secured database with the names of subscribers."

Ibrahim said that with the assistance of the American company, the CMA has also introduced a new computerised system for central registration.

"Through the Internet, each investor can get detailed information about his portfolio and its current values and developments," he noted.

Ibrahim was optimistic that a new law for the banking sector would boost the banking and stock market activities in Egypt. The law, which will be discussed by the People's Assembly shortly, will pave the way for the establishment of investment banks for the first time in Egypt.

"The main activity of these investment banks will be to cover the establishment of holding companies and also accept deposits and establish and manage investment funds," he said.

He added that the new investment banks would also push forward the enforcement of the real estate mortgage law through establishing companies to finance housing projects.

"The banks will undoubtedly help activate the real estate market in Egypt," he said. "Egypt is secure from stock market turmoil similar to the market troubles in the United States after the collapse of energy giant Enron.

The auditing system used in Egypt does not allow any company to hide its activities and therefore an Enron-like crisis is a remote possibility."

Previous Stories:
  Accelerating economic reforms   (4/6/2002)
  Egypt's Stock Exchanges need new companies to reactivate the market   (4/2/2002)
  Four axes to develop Egyptian stock exchange activities   (3/12/2002)

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