- Middle East/North Africa
Egypt’s listed companies will join the new Pan-African Index when it goes live Monday, which will encompass 19 stock exchanges from across the continent, according to Mohamed Omran, EGX chairman.
The index launch will coincide with the opening of the 16th annual conference of the African Securities Exchanges Association (ASEA), which Egypt is hosting for the second time in Cairo until 4 December.
Speaking to Egypt Independent late Sunday, Omran said that applying to host the conference is meant to send a message to the global community and investors that Egypt is ready to start the path to recovery.
“The EGX was more or less absent in 2011 from all international partnerships, due to the political situation and the financial turmoil Egypt faced, and our goal this year is to improve that image,” he added.
Egypt is a partner in the Federation of Euro-Asian Stock Exchanges and member of the World Federation of Exchanges.
The goal of the new index is to encourage investors to recognize Africa as an attractive destination and the “future” of emerging markets with a wealth of untapped potential, Omran said.
Some companies of the EGX will be listed on the new index, but the details have not yet been announced.
The index was developed by FTSE, a British provider of stock market indices and associated data services that started out as a joint venture between the London Stock Exchange and Financial Times.
Egypt is already listed on a similar index, the MSCI Emerging Market Index, created by Morgan Stanley Corporate International and designed to measure equity market performance in key emerging markets.
On Sunday, the ASEA held its general assembly at the Egypt Stock Exchange headquarters in Smart Village, ahead of the opening of the annual conference, in attendance of ASEA President Sunil Benimadhu, who is also the chief executive of the Stock Exchange of Mauritius (SEM).
The conference will be held at a hotel in Garden City, just steps away from the scene of recent clashes between protesters and security forces last week, and a short walk from Tahrir Square, where opponent’s of President Mohamed Morsy’s recent constitutional declaration continue to hold a sit-in.
But the organizers of the conference insisted on keeping the venue unchanged, and luckily, the area is now less precarious than it was last week.
“The point is for people to come to Egypt and see for themselves that it’s not as bad as what they see in the news on TV,” Omran said.
Announced 22 November, Morsy’s declaration has thrown Egypt into another bout of political uncertainty as the standoff continues between opponents who call it an unprecedented power grab, and others who see it as a means to protect the revolution from a plot that would have set out to derail the transition process.
The effect on market sentiment has been significant, and many analysts are wary that the tenuous political climate has thrown any potential economic recovery in flux.
In the first trading session after the announcement, Egypt’s stock market lost LE29.3 billion of total market capitalization, the third largest single-day drop since January 2011, with the benchmark EGX 30 hit hard.
Some recovery was made with this week’s opening session, however, as the market recouped Sunday about LE4 million of last week’s total loss of LE33.7 billion. The EGX 30 rose by 1.8 percent.
“Our goal this week is to attract investors to Africa, and in turn, Egypt as very much a part of this region,” he added.