The stock exchange of Egypt is situated in Cairo, Egypt. The Egyptian Stock Exchange (EGX) is one of the oldest stock markets established in Middle East, who traced its origin from the merger of two stock exchanges in Egypt namely, Alexandria Stock Exchange which was established in 1883 and Cairo Stock Exchange established in 1903, now known as Egyptian Stock Exchange which was formerly known as Cairo and Alexandria Stock Exchange (CASE). Both exchanges were very active in 1940s, and both the exchanges combined were ranked fifth in the world. The vision of Egyptian Stock Exchange is “To be a World-Class, Egypt-based exchange: which would serve best to its stakeholders in the Middle East and North Africa region.” (The Egyptian Exchange, 2010). As every stock exchange has certain values and duties, the EGX also has system of values which have a common denomination of ethics practiced with every individual whether it is customer, members, issuers, local investment communities, employees and regulators. The Chairman, Mr. Maged Shawky is the head of the Egyptian Stock Exchange. (The Egyptian Exchange, 2010). The exchange has trading session from 10:30am to 2:30 pm on all days except Fridays and Saturdays and holidays declared in advance by the Exchange.
The main performance indicator or measure of activity of Egyptian Stock Exchange (EGX) is EGX30, which was previously known as CASE30 index. It includes the top 30 companies in terms of liquidity or 30 most active companies in the Egyptian Stock Exchange. The CASE 30 was started with base value of 1000 points on January 2, 1998 and was renamed to EGX 30 on March 1st, 2009. Any company to get listed or to get included in EGX30 must have a 15% free float. (The Egyptian Exchange, 2010).
Egypt has a long and rich history of financial market. In late 1980s, Egypt had a sophisticated financial structure holding a mature stock exchange in both Alexandria and Cairo. (Wilson, 1995). The Egyptian Stock market has experienced several fundamental changes during major periods such as from 1888-1958, 1959-1971, 1972-1992, and 1992-present. Egyptian stock market was very mature and remarkable at earlier phases of its operation; in 1940s both the exchanges were very active. In 1959-1971 phases the stock exchange left its effective operations due to the intervention of government policies and restrictions. (MohieEldin, Sourial, 2000). After high intervention of government, there were several attempts made to improve the working and effectiveness of failing Egypt stock market which continued to stagnate. In 1990s the Egypt stock market went under significant revival of government liberalization policies and finally in 1997, major changes were made in Egypt stock market that reformed the stock market and several important steps have been taken by government to modernize the stock exchange. The Egyptian Stock Market has significantly grown by 40% per year since the 1997 reforms and in May, 2001 it reached $36.7 billion. (AMF, 2001). In the current situation of Egypt Stock market, the prices of share fell down on Monday and EGX30 index fell by 3.84 percent with the closing of stock market (AFP, 2010). With the losses on two consecutive days the Egyptian Stock Exchange rose on Tuesday with an increase of 2.1 percent in the EGX30 gaining 140 points close to 6659 and the prices of share jumped to 3.5 percent (Egypt News, 2010).
The Egyptian Stock exchange is one of the oldest stock exchange which was established in the Middle East. In early times Egypt had two stock exchanges namely Alexandria Stock exchange which was established in 1883 and then Cairo Stock exchange in 1903. The Alexandria future’s market was one of the oldest market in the world. The first transaction which took place in 1885 was of cotton in Alexandria’s café de l’Europe, which was later, named as Mohamed Ali Square. At that time Reputation was everything and timing and reliability was considered to be important if the profits were made on regular basis. There were two respected institutions which were affiliated with the International Cotton Congress. At an informal meeting in the early 1900s, the Monsieur Maurice Cattaui reminded the merchants and broker that there should be stocks exchange in Cairo same as of Alexandria. The official headquarters for Cairo stocks exchange was chosen to be the old premise of Ottoman Bank. In 1928, the Cairo stocks exchange moved into its present premise Sherifien Street. In July 1961, the two stock exchanges merged into Cairo and Alexandria stock exchange which was ranked fifth in the world in terms of market capitalization. (The Egyptian Exchange, 2010).
The official currency of the Egypt is Egyptian Pound (Geneih) usually written as L.E. Earlier Egypt was part of the Ottoman Empire until the French occupation took control in 1798 and later on by British in 1801. In early 1900s the Egypt was made a British protectorate. In 1922, the Egyptian kingdom was declared and on November 14, 1936 Egypt gained its full independence. From 1958-1961, Egypt was untied with Syria, as a part of United Arab Republic. In 1834, the financial system was reformed by Mohammed Ali, setting 1 Egyptian Piastre/Qrish divisible into 40 Para and equal to 1/100 Pound. On November 14, 1985, the Gold standard was adopted and in 1898, the National Bank of Egypt started issuing Bank Notes but they were not legal until 1914. In 1961, Central Bank of Egypt took control and became the ultimate authority of issuing note and they started issuing some small denomination notes (Global Financial Data, 2010). The Egyptian Pound was pegged to the US dollar until 2000 and central bank of Egypt was forced to devalue the Egyptian Pound due to several economic crisis in Egypt. From 2000-2003 the value of Egyptian Pound felt almost to 50 percent. The paper money of Egypt has two faces; an English face and an Arabic face and there are different pictures on each faces. The Arabic face has pictures of mosques in Egypt while the English side has Pharaonic scene. The coins are generally made of silver and copper and the coins have pictures of pyramids on one side and value denomination on the other side (Egyptvoyager, 2000).
The banking sector of Egypt is one of the well-established part of the economy and the first bank in Egypt was dated back in 1920s and expanded markedly in 1970s by their so called open door policy (AmCham Egypt, 2010). The Central Bank of Egypt is the governing body of the banking sector in Egypt, which comprises of 11 Investment banks, 24 commercial and joint venture banks, 15 branches of foreign banks and 3 specialized banks (HSBC, 2001). There has been continuous growth in the annual growth in deposits and assets. By June 2004, the ROE and ROA of Egyptian banks rose to 9.8% and 0.5% respectively. The Egyptian banking sector is improving with time and has gone various reforms in the form of M&A, privatization from 1991 up to today. (AmCham Egypt, 2010).
The Egyptian Pound is the official currency in Egypt and its symbol is £E. The Current conversion of Egyptian Pound to US Dollar.
Mathematically,
5.50 Egyptian pound per 1 USD. (Indirect Quote) (CoinMill, 2010)
0.18 USD per 1 Egyptian pound. (Direct Quote) (CoinMill, 2010)
In the Egyptian business culture, the key to doing business well is patience. Initial contacts regarding business are very important and they often mean the difference between success and failure. Egyptians are little more concern on the part of trust and know how i.e. why they mostly do the business that they know or trust, for this reason before practicing any business in Egypt one should have a mediator or a representative who can assist in meeting and acts as go-between (CIA World Fact Book, 2007). As there is diversity in culture of every nation, there are certain Do’s and Don’ts while practicing or starting or doing a business in Egypt which must be followed.
While starting a business or a firm in Egypt, one has to go through the legal and bureaucratic hurdles. There is a certain procedure which has to be followed while registering a new company or a firm. (World Bank Group, 2010).
Egyptian business people are mostly experienced in doing business and interacting with outsiders. While negotiating with these people one thing should always be kept in mind is that the people here expects the things to be done in their way. (Katz, 2008). There are some negotiating practices while doing a business in Egypt:
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