Bond trading coming to Egyptian Exchange, listing regulations eased

A bond-trading platform could be launched in Egypt in Q2 of 2014, after 10 years of planning, according to a story on Reuters, quoting Mohamed Omran, chairman of the Egyptian Exchange (EGX): “We hope to activate the bonds market in the second quarter of this year. The file is now with the central bank to come to an agreement with banks on how to issue certain percentages of the bonds for trading,” Omran told Reuters.

The regulator (Egyptian Financial Supervisory Authority EFSA) is to relax regulations from 1 Feb so that a listed company will no longer need EFSA permission to split shares or need to call a general meeting before a capital increase, provided it complies with pre-set rules. Reuters cited a telephone interview with EFSA head Sherif Samy. He said the new regulations would also make it easier for companies who wish to list. The draft that amends listing and delisting regulations has been shared with capital markets institutions in Egypt last week and can be obtained (in Arabic) via this link.

Omran told the agency the new regulations would help boost trading on the African securities exchange and attract more investment. According to an earlier Reuters story, the new regulations will also include developing mechanisms for exchange-traded funds (ETFs). The aim is to attract new companies and boost turnover. Samy had told Reuters in October that listing regulations were in “dire need” of change.

A few treasury (government) and corporate bonds are listed for trading on the EGX but so far investors tend to hold until maturity and bond trading is slow.

The EGX also announced recently new monthly reports on important data and financial indicators of listed companies including PE ratio, turnover ratio, percentage of change in the stock price, market capitalization, average daily value of shares traded and volume (number of shares traded). According to a news release, Omran said the data and indicators would boost the quality of information, raise capacity of small dealers in making comparisons, and help investors make decisions.

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