Experts in the “financial” market give quick recommendations to revive the stock market

Egyptian stock market indices are declining regularly and strikingly in the current period, amid a clear continuation of the sales wave by foreign investors, whose value has exceeded £ 10 billion since the beginning of this year.

Recently, there have been reports of the establishment of a higher committee that includes the governor of the Central Bank and the head of the Financial Supervisory Authority to discuss the reasons for foreigners’ exit from the stock market and the banking sector, confirmed by informed sources to Al Mal.

The head of one of the major investment banks in the local market – who prefers not to be named – has identified a set of steps that need to be taken to improve the market situation and restore foreign investment accordingly.

At the top of these recommendations was the entry of investments by local institutions, such as insurance and pension funds, with the aim of moving the market and improving stock valuations, which reached very low levels.

He added that the local market is a part forgotten by investors in emerging markets, emphasizing that foreigners have many alternatives to enter it, unlike the Egyptian Stock Exchange, so work must be done to create a local investment climate before they are lured.

He said all taxes levied on the Egyptian Stock Exchange should also be abolished, and the general atmosphere improved, explaining that the matter is not complicated as the movement of the market through local investment will lead to higher stock valuations , and thus attract foreign investment, which will allow the possibility of listing companies on the stock exchange in the coming period.

He added that some of the leading stocks have fallen by very large percentages in the recent period, despite the strength of their financial position, for example, Commercial International Bank shares are currently down to 34 pounds, compared to 44 last April , despite the fact that the stock witnessed a major transaction represented in the acquisition of “ADQ” company.Posses a stake in the bank at a price of 44 pounds, and therefore even this Golf investor has a losing much of the value of its investments in. the stock so far.

He also pointed out that many traders in the Egyptian market prefer to save their money in bank certificates, given the high interest rates and the growing risk of the stock market.

He said the only offer currently being implemented in the market is the Mahalla Spinning Company, with a very limited value of around £ 98 million, adding that this value is sometimes the entry of a single entity – one ticket – in the companies represent ‘IPOs in the past.

He said that it is currently very difficult to place companies on the stock exchange during the current period, given the low stock valuations and also the high risk of poor coverage, and therefore it is excluded that any listing operations will be implemented. at the present stage.

Sheriff Samy, former head of the Egyptian Financial Supervisory Authority, pointed out that what the Egyptian Stock Exchange is experiencing during the last period of decline in price indicators or trading values ​​is the result of several factors, some of which are global, that are affected. by emerging markets, and others related to investors’ view of the Egyptian economy, in addition to a few factors related to Specifically in the money market.

He pointed out that with regard to the money market, especially in recent months, several meetings have been held at the government’s headquarters under the auspices of the Prime Minister, which are expected to be implemented, which will strengthen confidence and help deal with some of the challenges we face.

Samy added that with regard to the aspect of stimulating demand, several government meetings have been held with public entities, which are some of the largest local investment institutions, including the Social Security Authority and the Endowment Authority, and they have great liquidity to invest, and their portfolios, Egyptian equities represent only a very small percentage of their assets in line with international standards. .

He stressed the need to pay attention to the increase in the relative weight of the Egyptian market in international indices, especially the Morgan Stanley Emerging Markets Index, which is followed by investment funds with large funds, and then the inflow or outflow from the Egyptian Stock Exchange. influenced by the increase or decrease in Egypt’s relative weight with these indicators.

He recommended that the benefit in the offering program be taken into account to offer existing large entities or to create new large entities by acquiring listed companies on other entities or by stock exchange or using the proceeds of capital increases to the requirement to achieve market value and free trade.

In general, he explained that spreading optimism among market participants is important, so announcing various initiatives and solutions to existing problems, including those included in the state ownership document, certainly contributes to changing the view of traders in the stock market. .

Sameh Al-Torgoman, CEO of Evolve Investment Holding Company, said that the solutions proposed and accepted by neighboring countries to increase foreign traders’ investments in their stock markets are numerous.

He added that the exit of foreign traders from the local stock market has clearly appeared during the recent period, and may be driven by various factors and influences.

Al-Torgoman explained that the most prominent recommendations to attract foreign investment back to the local market are restructuring the market, pointing out that the first steps of restructuring are to strengthen the empowerment and contribution of the private sector to the Egyptian economy. increase.

He pointed out that increasing the contribution of the private sector and its further empowerment would have a positive effect on the local stock market, especially as all departments are linked, and explained that foreign investment usually prefers their partnerships with the private sector. be established. sector.

He said the second recommendation was related to studying the causes of poor liquidity in the local market, and developing urgent solutions to reactivate it, explaining that the volumes of liquidity available in some neighboring countries, especially the Saudi market, frighteningly large.

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