EGX signed an MOU

Thursday, 3 November 2011

The Egyptian Exchange (EGX) and The General Authority for Investment  (GAFI) signed a Memorandum of Understanding (MOU) for mutual cooperation aiming to attract new companies  to list in the Egyptian  stock  market  for small  and medium  enterprises,  Nile Stock Exchange (NILEX).

During the press conference  following  signing of MOU, Dr. Mohamed  Omran, Chairman of  EGX,  emphasized   the  mutual  cooperation   between  EGX  and  GAFI  to  launch  the initiative supporting  small and medium enterprises  that have a proper financial standing in order to diversify  their access to funding.  He noted that GAFI has provided  EGX with ample database for potential companies to NILEX.

Dr. Omran revealed that GAFI provided EGX with the data of more than 8500 of their registered  companies  of which  their  capital  of ranges  between  LE  5 million  to  LE  100 million. This will enable NILEX management  to address these companies trying to attract them   to  list  in  the  market   which   will  initiate   new   investments   and   contribute   in revitalization of the labor markets to achieve high economic growth in Egypt.

Moreover, EGX Chairman asserted that the MOU signed between GAFI and EGX includes establishing  a fund to support small and medium enterprises.  This fund is established  by GAFI  to  support  NILEX  with  a  capital  of  LE  1  billion,  which  will  facilitate  listing  new companies   and   will  contribute   in  supporting   the  growth   of  these   companies   and increasing their investments. The Chairman also added that the most important success indicator of the fund is its ability to attract new companies to list on NILEX as an arm of financing companies to grow.

Additionally, EGX Chairman stated that the future of the Egyptian economy is significantly associated with the growth of small and medium enterprises as they represent about 90% of the total companies  in Egypt. He also asserted  that the growth opportunities  of the small entities exceed by far those opportunities available to their major counterparts.  On the other hand, Dr. Omran pointed out that the recent decline in Egypt's credit rating is due  to  the  unstable  political  future  expectations  of  Egypt;  where  he  highlighted  that these  ratings  were  not  of  a  significant  negative  impact  on  the  performance   of  the Egyptian capital market because the financial aspect as well as the fundamental  analysis of the companies concerns the investors more when the take their investment decisions.

On the other hand, Dr. Osama Saleh pointed that due to the political circumstances Egypt is going through now which is affecting SMEs,   GAFI was keen to have this kind of cooperation   with  EGX.     This  agreement   will  provide   support  to  small  and  medium enterprises  with solid  solutions  for their  stability  during  the current  period.   The  MOU also aspires to developing domestic investments and support the concept of entrepreneurship in Egypt and accordingly helping in finding practical solutions to unemployment, especially among young people.

GAFI  chairman  noted  that  such  protocols  and  bilateral  agreements  between  various institutions demonstrate  the interest of the Egyptian Government  in investment field.  It also reflects government  attention to small and medium investor as the cornerstones  inthe investment process and the growth of national economy in General.

Dr.   Saleh   concluded   by   stating   that   GAFI   will   be   launching   a   new   program   forentrepreneurship    "Ryada" during the coming month aiming to build a culture of entrepreneurship  among young people.   It also aims at transforming  ideas and interests than  just  looking  for  post  to  job  makers,  through  successful  projects  contribute   to supporting   the  economic  development   of  society.  He  referred  to  an  investment   by providing a number of facilities and mechanisms to support small and medium sized enterprises, in particular to allocate a separate window for easy construction of small and medium sized  enterprises  within  the  investment  services  complexes  in  Cairo  and  the provinces.