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History of the stock exchange in Egypt

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Up until the 1950's most of the trading was done with the Liverpool Cotton Exchange evidencing Egypt's strong ties with the waning British Empire. Not unlike oil today, Egyptian cotton trade had invariably been politicized during the interwar period figuring as a clause in most of Egypt's international agreements. It was a major bargaining tool as well as a collateral for Egypt's currency. The powerful Manchester trade relied heavily on this staple which was responsible for untold fortunes made in the UK.

There were also the Joint Egyptian Cotton Committee and the Cotton Institute, two highly respected institutions affiliated with the International Cotton Congress. By time, more and more Egyptians entered the trade, once the jealously guarded preserve of the Finneys, the Rheinharts, the Rolos, the Cicurels and Pintos. Newcomers included Talaat Harb Pasha, a founder of the Banque Misr group of companies, and Mohammed Farghaly Pasha, president of the Alexandria Cotton Exporters Association. On the expert side, there was Ahmed Abdel Wahab Pasha, a former minister of finance, and Fouad Abaza Pasha the director of the Royal Agricultural Society.

Just as the native intelligentsia was to have its turn at the helm, agricultural trade was brought within the aegis of the state through a series of 1950s agrarian reform laws. Henceforth, the agricultural sector mutated into unprofitable small holdings and bureaucratic cooperatives.

A few years later, the bourse along with Egypt's private sector was nationalized by strongman Gamal Abdel Nasser. Capitalism went into rigor mortis and soon enough King Cotton suffered the same fate. The irony here is that the epoch making speech which catapulted al-Rais onto the forefront of the international arena when he announced to the world that he had nationalized the Suez Canal Company in July 1956, was made from the parapet of Alexandria's bourse, for a long time the definitive symbol of Egypt's thriving cotton based capitalism. Fourty one years later, King Cotton is being painfully resurrected.

Achievements of the Stock Exchange

When the Exchange embarked on its modernization program, it defined its mission and objectives clearly, set its priorities carefully and then proceeded to accomplish them in a systematic and methodical manner.

Due to the continually changing landscape in the global stock exchange arena, the exchange has allowed for flexibility in the design of its objectives and consequently has added new goals and sharpened the focus of existing ones along the way.

A modern and robust technology infrastructure is being implemented at the Exchange. This includes the installation of state-of-the-art telecommunications and networking infrastructure covering local and wide area networks and linking all market entities to the Exchange. This solution allows for the expansion of the number of remote trading terminals ensuring wide coverage and accessibility of the trading system for information broadcast as well as for trading accessibility. This network represents the backbone for the spread of trading to other locations all over Egypt. The Exchange has also started the implementation of institution-wide information systems, to equip the Exchange with intelligent decision support and strategic planning tools and information.

One of the Exchange's main objectives and priorities is protecting investors. It has approached this objective along two axes: a monitoring and regulatory axis, and an information dissemination axis. On the monitoring and regulatory side, an advanced surveillance system has been developed. This integrated, open and expandable system uses the latest data warehousing and mining technologies that provide for real time on-line surveillance functionality and furnish a wealth of information for off-line surveillance. Also, the Exchange, with the assistance of international experts, has drafted a set of membership rules to ensure that investors receive high-quality services and adequate protection.

As it is becoming more evident that stock exchanges will require some form of integration to enhance efficiency, liquidity and remain competitive, the senior management of the Exchange has discussed with the leadership in the Gulf area and Saudi Arabia avenues for cooperation in that respect. This campaign will continue throughout the MENA region and Africa. Equipped with the EFA system and its powerful market solution that is shared by several markets in the region, the Exchange in Egypt is in a favourable position to play a leading regional role.

Recognizing the importance of the role of the Egyptian market in the region, EFA Software Services has decided to establish a support office in Cairo to service the Exchange in Egypt as well as the regional markets using the EFA system. This presence will not only guarantee support for the system being implemented, but it will also ensure a complete and sustained transfer of know-how and technology to the Egyptian market and enhance the opportunities for regional cooperation.

The Exchange is also focusing on the next generation by designing programs for schools and colleges to educate students in the role of the stock market using instructional guides such as simulation games and videos.

Finally, the Exchange embarked on, and successfully completed, an ambitious project to restore and renovate the building housing the Cairo Stock Exchange furnishing it with the latest-technology trading floor. The Exchange also leads a project to remodel the area surrounding the premises to become an environmentally-friendly pedestrian district equipped with wall displays and screens showing stock prices in real time.

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