contents - egx ipo summit marketing brochure english feb.pdf · 4 the egyptian exchange: the...

To be a World-Class, Egypt-based Exchange: the Premier Capital Market in the Middle East & North Africa Region that best serves its stakeholders.

The mission of EGX is to operate and develop a high quality market for the benefits of its Egyptian and international clients.EGX will serve and empower its customers by pro-viding top notch market technology, innovative products, fair, transparent and efficient market.

EGX system of values have a common denomination of ethics practiced with all its stakehold-ers :customers, members, issu-ers, managers, employees, regu-lators, the international and local investment communities.

Vision

Mission

Values

The Egyptian Exchange: The Market of Tomorrow

Why Join the Egyptian Exchange?

Benefits to your Company

List & Trade on EGX

Trading Procedures

3

7

11

19

23

Contents

2 The Egyptian Exchange:

Gateway to Finance 3


The Egyptian Exchange (EGX) is the premier capital market in the Middle East and North Africa, having a niche of being the most open and progressive exchange in the region. Operating since more than 130 years, EGX has always been regarded as one of the world’s lead-ing trading venues, providing top-notch market technology, innovative and flex-ible products and a transparent, efficient platform.

EGX was first identified as the Cairo and Alexandria Stock Exchanges (CASE). It officially evolved from Alexandria’s Futures Market in 1885, when the first cotton transaction took place. It was then followed by Cairo Exchange, known as equity trading platform, in 1903. After a

while, the two platforms merged togeth-er, forming the Egyptian Exchange.

Recognizing its regional leadership, sev-eral international renowned organizations have endorsed EGX and its chairman as essential members in their communities. In 2005, EGX has become the first Arab member in the World Federation of Ex-changes. Its executive chairman is also a member of the executive committee of African Securities Exchanges Associa-tion (ASEA), the Vice Chairman of Fed-eration of Euro Asian Exchanges (FEAS) and a founding member of the Union of Arab Stock Exchanges.

As a regional top player, EGX lives up to international standards. EGX imple-

EGX has become the first Arab member in the

World Federation of Exchanges


ments international standards that fulfill every requirement for global exchanges. It offers a dynamic trading platform to assist issuers in attracting potential in-vestors to increase their capital with a reasonable cost, ensuring integrity and proper disclosure in the market. It has an endeavor to continuously update trad-ing tools and mechanisms, giving more depth to the market.

EGX also offers a diversified package of products for prestigious and sophisti-cated listing and trading. It is an efficient trading platform for equities, govern-ment/corporate bonds, and close-ended mutual funds.

However, EGX’s competitive advantage stems from its unique regional diversity

of its listed companies. EGX offers a pool of market sectors for its investors to choose among. Those sectors include banks, chemicals, construction and ma-terials, food and beverage, telecommuni-cations, travel and leisure. Dividing the market into 17 sectors is aimed at pro-viding the investing public with a clas-sification of the listed companies on the basis of homogeneous characteristics that relate to the companies’ economic activities and main business revenues.

Furthermore, modest transaction and listing fees and absence of restrictions on foreign investment are among EGX advantages.

As a regional top player, EGX lives up to international

standards. EGX implements international standards

that fulfill every requirement for global exchanges.

Efficiency


Enlisting your company in a public mar-ket is a major decision. In many scenar-ios, it is one of the crucial steps not only for development of the company but also to keep its institutional structure and trade mark from desertion. It also en-hances the horizontal and vertical means of growth of the company.

A professional market such as EGX ap-plies the latest trading and listing tech-nological applications. The number of listed investors on EGX reached around 2 million investors of the different seg-ments, individuals and institutions, and investment funds.

Moreover, EGX offers a wide range of benefits, including access to public capi-

tal to fund growth. Unlike private sources of capital like bank loans that are insuf-ficient to support the expansion strate-gies of successful companies, listing on the Exchange enables a better support to capital and a global media profile.

Being the leading market of the region, EGX ensures a balance between protect-ing investors and preventing overbur-dening companies with expensive and unnecessary obligations. Thus, main-taining quality in selecting companies to list is also considered one of the main priorities of EGX.

EGX directs any brokerage firm that is not listed should abide by its corporate governance rules. A manual is set to

EGX offers a wide range of benefits, including

access to public capital to fund growth.


secure the understanding of the compa-nies’ executives of their role in imple-menting corporate governance princi-ples. The main purpose is to limit risks arising from trading activities and de-fining clearly the member’s rights and obligations. This in return increases the confidence of the different parties, and limits the conflict of interests.

Financial integrity and membership rules are also key success elements for EGX. Local and foreign members are expected to follow to access and trade in the mar-ket. The rules are periodically reviewed to guarantee the application of business ethics, professionalism, and solvency.

Being the leading market of the region, EGX

ensures a balance between protecting investors

and preventing overburdening companies with

expensive and unnecessary obligations.

Opportunities


EGX offers a wide range of benefits that provide the company with the means to respond to key strategic plans.

Gateway to Finance

Through EGX, the company can access the investors’ community and increase the number and diversity of security holders from large institutional investors to private investors local and interna-tional.

Listing on EGX grants the opportunity to respond to the companies’ main strate-gic target, which is access to finances. It takes you to the gateway of a large capi-tal market that funds both present and fu-ture growth. Thus, listing is the keyword to pursue expansion through issuing ad-ditional securities to raise equity or debt finance.

Foreign Participation by Region in 2012 *

* After Excluding Deals

US & Canada 23%

Arab 29% Europe 41%

Others 7%

Foreign Participation by Country in 2012 *

Others 22%

UK 32%

Saudi Arabia 15%

UAE 5%Cayman Islands 4%

USA 23%


Prominent Profile

Being on the EGX board enhances your profile within the community of inves-tors as there is extensive media coverage that creates a greater awareness of your products or services.

This media publicity adds to your com-pany’s value and promotes the position and reputation of the company within its particular industry. This also would be favorable in terms of holding deals with suppliers, customers and potential inves-tors.

Employees’ incentives

Listing and trading the company on EGX creates a market value for its shares. This grants company management the opportunity to further motivate its staff through the introduction of an employee

incentive scheme. Offering the option of awarding employees incentives of the company’s shares for the high perfor-mance creates a sense of loyalty in the sense of sharing the company’s growth.

Company credibility (Regional Credible Profile)

The Egyptian Exchange continuously seeks transparency, which is a corner-stone of its main strategy. As compared to other regional markets, EGX is con-sidered the most transparent; thus en-hancing its credibility. Even at times of crises, EGX stands firmly stable when it comes to its investor base.

Diversity


Similarly, the newly adopted listing rules promote corporate transparency and high disclosure standards. This facilitates for member companies and issuers to intro-duce comparative analysis for investors. And in turn, it boosts shareholders con-fidence.

Qualified Market (World Class Trading Environment)

EGX is always abreast with the latest in-ternational technological advancements and employs them. It has adopted new world-class trading system of Nasdaq OMX “X-Stream” solution, providing

one of the best investment experiences to its domestic and international diverse customer base.

Fulfilling its vision to serve and empow-er investors as one of the fair, transparent and efficient capital markets in the region and the world, EGX has also recently launched the new automated surveil-lance trading system from “Millennium IT”. It is an international best practice based surveillance system that provides an instantaneous warning mechanism

the newly adopted listing rules promote corporate

transparency and high disclosure standards


for any violations in the Egyptian capital market.

International Presence

EGX has a strong regional and interna-tional presence. It is a member of the World Federation of Exchanges (WFE), the African Securities Exchanges Asso-ciation (ASEA), and the Federation of Euro-Asian Stock Exchanges (FEAS). In addition, it is a founding member of the Union of Arab Exchanges and an af-filiate member of the International Or-ganization of Securities Commissions (IOSCO). Also, EGX has signed many memoranda of understanding with oth-

er stock markets through which they can exchange experiences and increase means of cooperation.

Mergers and Acquisitions

The daily market trading price of the shares is a way of evaluating the per-formance of the company based upon its strength in the market. This evalua-tion is a critical component in the Merg-ers and Acquisitions. Thus, being one of EGX listed companies paves the way for M&A.

Control


Benchmark the company

As EGX has 17 sectors classifications, it is very easy for the company to be compared with its competitors. Thus, these sector indices are very significant for those who want to deeply look at the industry participants and evaluate their performance.

Exit Strategy

Being listed on EGX is the core of keep-ing and preserving the existence of the company name no matter who the share-holders are. This gives the chance for the main shareholder on their long-term strategy to plan for selling the whole company at a true value if they wish to.

EGX ... launched the new automated surveillance trading

system from “Millennium IT”. It is an international best

practice based surveillance system that provides an in-

stantaneous warning mechanism for any violations in the

Egyptian capital market.


Benefits

ListingBenefits

Mergers & Acquisitions

Benchmark the company

Exit Strategy

International Presence

Gateway to Finance

Prominent Profile

Employees Incentives

World Class Trading Environment


A team of EGX experts is the gateway for your company to be on EGX trading platform. It takes the company through easy stations to be on board and the first station is preparing the required docu-ments to be submitted to the relevant de-partment. Follows is introducing the of-fering prospectus in order to prepare the company to be tradable on EGX trading platform. Finally, the company’s shares are traded on EGX.

Main Issues You Need to Know

• All securities should be centrally de-posited.

• The company’s by-laws & the issuing terms should not include any restric-tions on the trading of the securities to be listed.

• To list on EGX, the issuer must sign an agreement with the Exchange whereby the issuer agrees to abide to the listing rules and ongoing obliga-tions of EGX.

• The minimum allowed capital to be listed is L.E 50 million or equivalent in foreign currency and it shall be ful-ly paid for the blue ships to be listed on EGX platform. On the other hand, it is also allowed to list the small and mid capital enterprises (SMEs) whose issued and paid in capital is less than L.E 50 million or equivalent in for-eign currency on its specialized plat-form on EGX.

• The company shall publish offering prospects that clarify the 10% to be offered of the company’s shares. The number of shareholders after the of-fering shall not be less than 500 share-holders whereby the main sharehold-ers shall hold 25% of the company’s shares for 2 years from the offering date. For the small and mid cap en-terprises, the number of shareholders shall not be less than 25 shareholders and the number of shares shall not be less than 100 thousand shares; for the major companies, the share to be listed shall not be less than 5 million shares.


• There shall be at least a financial state-ment for one year before the listing request issued in accordance to the Egyptian Accounting Rules. It shall also be revised by a financial advisor whereby it includes a 5% net profit of the capital that is requested to be list-ed and the investors rights shall not

be less than the capital. For small and mid sized enterprises (SMEs) that did not issue a financial statement for a year, it can be exempted from this re-quirement in case it has a 5 year future plan indicating the prospected profits accredited by the nominated advisor or an official financial advisor.

Listing

The company’s desire to list

Trading starts on the regular trading system

Submit the listing documents to the Stock Exchange

Publish the listing request

Fulfilling the document and studying the listing request

Sign an agreement with the Stock Exchange

Submit the disclosure report to the Stock Exchange to study

An approval on the listing request is issued

Publish the disclosure report on the trading system

Present the prospectus on the trading system

Adding the company stocks on the trading data base

Execute the IPO in the OPR

v

Step

s to

List

on E

GX


EGX has always been an attractive fi-nancial hub regionally and internation-ally. Over the years, it has accumulated and maintained a massive number of in-vestors. In 2012 alone, 22 thousand new investors were registered while in 2011, 36 thousand joined.

Besides individual investors, EGX ap-peals to institutions especially foreign ones. Newly coded non-Arab foreign institutions captured around 71% of the total number of newly coded institutions in 2012.

The exchange has adapted a trading sys-tem of Nasdaq OMX “X-Stream”. This system supports the increasing volume of trading on EGX as well as the simul-taneous trading multiple product classes including equities, debt, commodities, ETFs, futures and options.

Trading starts when an investor gives an order to buy or sell a specified number of shares. The order is then queued into the trading system until it matches a sell or buy order. The company’s shares always keep its value as EGX rules impose price limits that control fluctuations through a 5 to 10% ceiling.

As a regional exchange, listing on the Egyptian Exchange is an aspiration for many companies. In general, the Egyp-tian Exchange is for ambitious and ma-ture companies that are confident in their ability both to utilize the benefits that EGX offers, while meeting the standards of disclosure, governance and regulation that it requires.

The company’s shares always keep its value as EGX rules impose

price limits that control fluctuations through a 5 to 10% ceiling.

Contact

Financial District, Building B 135, Smart Village, KM 28 Cairo - Alexandria Desert Road, 6th of October, Egypt, P.O Box 47 Smart VillageTel: (202) 35316300 / 400

4 A El Sherifein Street, Down Town, Postal Code 11513,P.O. Box 358 Mohamed Farid Cairo, EgyptTel: (202) 23931462

contents - egx ipo summit marketing brochure english feb.pdf · 4 the egyptian exchange: the...

Documents