Egypt’s Stock Exchange Adds Depositary Receipts

Emerging Markets Investor: DR News

By Gordon Platt

The Egyptian Exchange, one of the more active stock exchanges in the Middle East and North Africa (MENA) region, has begun trading Egyptian Depositary Receipts (EDRs). The first company to list EDRs on the exchange was Orascom Development Holding, a Switzerland-based real estate developer with projects in new resort towns in eight countries, including Egypt. The exchange also aims to attract companies from the Gulf Cooperation Council (GCC) countries.

“Any company can now list EDRs on the Egyptian Exchange in Egyptian pounds, instead of listing GDRs [global depositary receipts] in London,” says Maged Shawky, chairman of the Egyptian Exchange. The exchange, formerly known as the Cairo and Alexandria Exchange, is upgrading its infrastructure and regulation, Shawky told a MENA conference in New York sponsored by Beltone Financial, a Cairo-based investment bank.

The Egyptian Exchange, with 219 listed companies, had a market capitalization of about $75 billion at the end of May. A new division, the Nile Stock Exchange, was opened in June for trading shares in 10 small and medium enterprises.

The Egyptian economy has been resilient throughout the global financial crisis, and the exchange trades stocks in a wide variety of sectors, Shawky says. It plans to introduce new derivatives products next year, he adds.

Orascom Development Holding relocated from Cairo to Altdorf, Switzerland, in 2008 to be closer to developed capital markets to fund its expansion.