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Egypt's stock market needs new blood: Bourse president

The new president of the Egyptian Stock Exchange wants to reinvigorate the Bourse, he tells his first press conference

Bassem Abo Alabass, Saturday 24 Sep 2011
Egypt
New Bourse head promises a shake-up and expansion of exchange practices (Photo: Reuters)
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The new president of the Egyptian Stock Exchange has said his main task in the days ahead will be persuading new companies to list themselves on the Bourse.

Mohammed Omran, a former vice president of the Bourse, was appointed head by the Egyptian cabinet on Wednesday, replacing Mohamed Abdel Salam who had been in the position since March.
 
Speaking at an introductory Cairo press conference on Saturday, Omran said that as well as encouraging wider participation, he would also reinstate daily discovery sessions and help boost the performance of the Nilex, the market's small enterprise exchange.
 
"We will try to attract new companies to the market. We will be helpful to any company wishing to be listed," Omran said, admitting raising the number of listed shares, which currently stands at around 180, was "unlikely to happen overnight."
 
The stock exchange has taken heavy losses since the beginning of Egypt's revolution, closing for seven weeks and seeing more than LE125 billion wiped from its value. Despite periodic gains, revived political tensions are hobbling the market. The EGX30, the market's benchmark index, fell near a three-year low in mid-September in the aftermath of the storming of the Israeli embassy in Cairo by protesters.
 
Omran, who said his 'mission' would last until 30 June 2013, also pledged to make changes to the Nilex, the Bourse's side-market for small and medium-size enterprises which lists just six firms.
 
Investors on the smaller exchange have demanded their trading operations, rather than just the day's results, be displayed on the Bourse's main trading screen, claiming it would bring 'more transparency'. Omran said he would enact this change 'soon'.
 
He also promised the reinstatement of  'discovery sessions' -- trading initiated before the official operating hours to determine prices for the day's activities. The practice was frozen when the Bourse reopened on 23 March, with officials promising its return when market conditions stabilised.
 
The chairman of the Egyptian Financial Supervisory Authority (EFSA) Ashraf El-Sharkawy also attended the press conference, saluting the effort of Abdel Salam in overseeing the Bourse's reopening.
 
The appointment of Omran, who served as the exchange's vice-president between 2006 and 2010, was met with anger by some in the financial sector who previously accused the former Bourse authorities of turning a blind eye to conflicts of trader interest during the Mubarak era. 
 
"I am innocent of any corrupt practices that occurred, and I have the ability [in the new position] to resolve any outstanding disputes from this period," Omran said.
 
During the meeting, Omran restricted his comments on the stock market to generalities but promised another press briefing in two weeks.
 
But he did admit there was a lack of confidence in both the market and Egypt's economy among investors, and that political stability was key to recovery.
 
"There are external factors we can not control. Egypt is experiencing now conditions it has not seen for 50 or 60 years," said Omran. 
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