INTERVIEW: Efforts to support EGX, offering NAC in IPO to boost Egypt’s financial market

Doaa A.Moneim , Monday 23 Aug 2021

Since the onset of the COVID-19 crisis in March 2020, Egypt has taken several actions to protect its economy against the severe impacts of the pandemic across all economic sectors, including its stock exchange market

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In an interview, Vice Chairman of Mubasher Capital Holding Ehab Rashad discussed with Ahram Online the key targets of the trading platform his company launched on Monday for international financial markets and his forecasts concerning Egypt’s stock market going forward.

Since the onset of the COVID-19 crisis in March 2020, Egypt has taken several actions to protect its economy against the severe impacts of the pandemic across all economic sectors, including its stock exchange market.

These actions have managed to attract more investors to Egypt and encourage businesses to create innovative ideas that serve this objective.

Ahram Online: What is the key objective behind launching the trading platform?

Ehab Rashad (ER): The objective of launching this trading platform is to provide trading services in international markets for foreign investors who reside abroad, and it is the first of its kind to be introduced in Egypt.

We provide this service in more than 70 stock exchanges worldwide with the newest available technology in the Middle East through the website and mobile apps Mubasher Trade Plus & Mubasher Pro 11.

All this can be done through one account and one currency. These mobile apps are considered the newest, with tools that help investors make investment decisions, in addition to advanced charts.

AO: What are the expected benefits for the financial market in Egypt from the presence of such a platform?

ER: Providing such a service in Egypt should attract attention towards Egypt's financial market performance, and that can be a factor for attracting foreign investments towards the stock market in Egypt. It also highlights the importance of establishing a financial centre in Egypt.

AO: How do you see the performance of Egypt’s stock exchange amid the ongoing challenges imposed by COVID-19?

ER: The Egyptian Exchange (EGX) is known by its diverse listed companies. Despite the circumstances of the pandemic, the financial results were positive in many companies since we have attractive prices and most companies' shares are still below fair value.

We expect more cash inflows into the market, therefore, there will be strong activity and gains by the main index going forward, particularly with the growing interest Egypt’s government pays to the stock exchange and the recent announcement of Egypt’s President Abdel-Fattah El-Sisi regarding plans for the Administrative Capital Company to go public through an initial public offering (IPO) on EGX within two years.

AO: How can the performance of the EGX be enhanced to push forward?

ER: The EGX needs companies with a strong financial return to achieve positive performance to attract capital for investment. The government’s plans to list more companies in the fourth quarter (Q4) of FY2021/2022 through IPOs will also be a main factor in enhancing the stock exchange and attracting local, regional, and international investors.

Egypt’s EGX has recently carried out advertisement campaigns on various social media platforms, as well as signing a protocol with the Ministry of Emigration and Egyptian Expatriates’ Affairs to attract investments by Egyptians abroad, which resulted in more investors both locally and internationally.

AO: How do you perceive the actions that have been taken since the onset of the pandemic to boost the EGX?

ER: The partial lockdown measures that were adopted at the onset of the pandemic starting March 2020 had a negative impact on the economy, and the EGX 30 fell to nearly 8,000 points in March 2020, before the intervention of the Egyptian president, who directed the Central Bank of Egypt to support the stock market with EGP 20 billion.

This has had a positive effect on encouraging investors to return to the stock market, as they were assured that the prices won't decrease further; and from that point, the market was strongly pushed to pass the 11,000-point mark, and there are expectations that it will increase further, especially with a total trading value exceeding EGP 2 billion in one session.

AO: Would you like to share any additional comments on the topic?

ER: Mubasher International has plans to cover all listed companies in international markets by the end of 2021.

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