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Q&A about the largest plan to develop the Nile Stock Exchange for the first time



Although 10 years have passed since the launch of the market for small and medium enterprises, known as the Nile Stock Exchange, the market has not achieved its purpose, which is to help small and medium-sized companies to grow and expand, and over the past years it has suffered from the registration of a limited number of companies amounting to only 26 companies with trading volumes not reaching one million A dollar a day after institutions were reluctant to invest in them, and the stock exchange management led by Dr. Mohamed Farid drew up a plan to develop it. Al-Youm Al-Sabea presents questions and answers about the first plan to develop the Nile Stock Exchange.


Q- First of all, what is the Nile Stock Exchange, and what is the purpose of establishing it?

C- The Nile Stock Exchange is the first market in the Middle East that aims to develop small and medium-sized companies in the region by providing the necessary financing to complete expansions, and aims to create a market for promising companies from all countries of the region without being bound by a specific industry or geographical boundaries, including family companies.


Q- What is the importance of a private exchange for small and medium enterprises?

C- Establishing a private exchange for small enterprises that contributes to; 1- Obtaining unlimited financing for small and medium enterprises without complicated procedures and without the need for guarantees.

 

2- Providing promising companies for huge Egyptian and foreign investments that they are looking for to participate in and finance them

 

3- Institutions and investment funds that wish to invest in successful companies and help develop them in terms of management, marketing, technology and other systems.

 

4- The company's presence on the stock exchange facilitates the process of obtaining banking facilities of all kinds.

 

5- Providing circulation mechanisms to speed the transfer of ownership and providing a fair mechanism for pricing within the limits of supply and demand mechanisms.

 

6- Companies registered in the market of small and medium-sized companies worldwide have witnessed remarkable growth opportunities after their registration in the market and the start of obtaining the required financing.


Q- Why were you launching a plan to restructure the Nile Stock Exchange?

A- Although 10 years have passed since the activation of the market for medium and small companies (the Nile Stock Exchange) for trading from within the Egyptian Stock Exchange as a table for a special system for trading instead of establishing a private exchange, the number of companies listed in this market is only 26 companies, after deleting many companies and suspending companies Other, which led to many dealers incurring huge losses, in addition to their inability to exit gains from that market.


Q- What are the stages of developing the Nile Stock Exchange development plan?

C- The stages of developing the market for small and medium enterprises went through several stages, starting with analyzing the situation to find out the shortcomings, secondly, hearing sessions with market parties, thirdly, choosing the European Bank for Reconstruction after conducting a comparative study between international institutions with experience, and fourth holding workshops between the European Bank The market parties, fifth, receiving the restructuring plan from the bank after being reviewed more than once by the stock exchange, and sixthly reviewing the restructuring plan with the market’s participation in its formulation.

 

The development plan included, firstly, a comprehensive structuring of the register of accredited sponsors, secondly developing the capabilities of listed companies "supply side", thirdly communicating with fund investment managers, financial portfolios to enhance liquidity "demand side", and fourthly, a comprehensive marketing and promotion plan that includes a website and launching an Excellence Index.


Q- How will the sponsor registry be structured?

C- Steps for structuring and revising the record of the sponsors of the Nile Stock Exchange, which began by canceling 10 sponsors who do not abide by the rules of the sponsors' work in the first phase, and adding 3 new companies, forming a committee to conduct a second evaluation of the sponsors, 17 meetings were held to ensure their readiness and capabilities, and the results of the purification will be announced during Ayyam, an intensive training program to develop the capabilities of the sponsors, followed by an additional evaluation. Coordination with the European Bank for Reconstruction and Development to register the sponsors approved by the Stock Exchange in the bank’s records to start activating the restructuring plan and contracting with the listed companies to develop and structure and finance part of the restructuring.


Q- How will the listed companies be developed?

C- The capabilities of the listed companies will be developed “the supply side”. It was agreed with the European Bank for Reconstruction and Development to bear a portion of up to 70% of the cost of restructuring the listed companies. The Egyptian Stock Exchange agreed to contribute part of the costs of the research coverage as an integral part of the restructuring requirements. The sponsors have worked to raise the profile of companies in matters related to developing investor relations, providing research coverage, and maintaining high levels of transparency and corporate governance.

Q- What about activating liquidity volumes?

C- The stock market management will work on communicating with investment managers to enhance liquidity "the demand side", by holding meetings with investment managers of various funds and financial portfolios to introduce them to success stories in the market, to motivate them to pump more investments to enhance liquidity and trading, and to arrange quarterly meetings between Investor Relations Managers with established companies of excellence and Research Managers to familiarize them with the company's business model and its revenue sources to increase research coverage to enhance liquidity and trading.


Q- Is there a plan to market and promote the SMEs market?

A- Yes, there is a plan for marketing and promoting the SME market, which will begin by dividing the SME market into two markets. The first is the "Tamayouz" market, which includes the best companies in terms of strong financial and operational performance, and the second is the Nile Market, which includes the rest of the companies. The Egyptian Stock Exchange has completed the development of a new index that includes existing companies "Tamayouz". The Egyptian Exchange Administration will finalize the development of a website as a more effective communication channel to provide a distinguished service that meets the needs of market parties, and highlights the list and index of "Tamayouz" and even extends to include introductory and promotional materials to motivate companies and individuals to register and invest.

 

The EGX will also host the executive leaders of existing companies that excel through the "EGX TALKS" platform developed by the ASE to talk about the latest developments in their business, and to help spread it on the stock exchange pages on social media platforms as well.

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