The Egyptian government has affirmed its full support for efforts to develop the country’s capital market, signaling a new push to attract large companies and boost private sector participation. The new Chairman of the Egyptian Exchange (EGX), Dr. Islam Azzam, has outlined a strategy to deepen the market by introducing new financial products and mechanisms.
Key Highlights
The new strategy aims to enhance the efficiency and competitiveness of the Egyptian stock market:
- New Strategy: The EGX will pursue two parallel tracks: deepening the market and expanding its instruments.
- New Financial Products: The plan includes introducing new products such as derivatives.
- Market Mechanism: A key focus is activating the market maker mechanism to boost liquidity and reduce volatility.
- High-Level Support: Prime Minister Dr. Mostafa Madbouly affirmed the government’s full support for developing the capital market to enhance private sector participation.
A Two-Track Strategy for Market Development
In a meeting with the Prime Minister, Dr. Islam Azzam explained that the EGX will pursue a two-track strategy in the coming phase. This includes deepening the market and expanding its available instruments by introducing new financial products. This approach aims to provide more opportunities for investors and strengthen the efficiency and competitiveness of the market.
Introducing Derivatives and Market Makers to Boost Liquidity
A key part of the new strategy is the introduction of derivatives and the activation of a market maker mechanism. Derivatives are financial contracts whose value is linked to an underlying asset, allowing investors to manage risk. A market maker is a firm that constantly offers to buy and sell specific stocks, which ensures there is always someone ready to trade. This mechanism keeps the market liquid, reduces volatility, and gives investors more confidence that they can enter or exit positions without delays.
Government Backing to Enhance Private Sector Growth
The initiative has strong government backing. Prime Minister Dr. Mostafa Madbouly described the capital market as one of the key tools for economic growth, boosting investment rates, and enhancing private sector participation. Dr. Azzam emphasized that his administration is committed to continuous dialogue with all market participants to shape more effective policies that enhance the competitiveness and attractiveness of the exchange.
Source: WAYA
