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

The Egyptian Exchange: The Market of Tomorrow 3

Why Join the Egyptian Exchange? 7

Benefits to your Company 11

List & Trade on EGX 19

Trading Procedures 23 2 The Egyptian Exchange: Gateway to Finance 3 The Egyptian Exchange (EGX) is the while, the two platforms merged togeth- premier capital market in the Middle er, forming the Egyptian Exchange. East and North Africa, having a niche of being the most open and progressive Recognizing its regional leadership, sev- exchange in the region. Operating since eral international renowned organizations more than 130 years, EGX has always have endorsed EGX and its chairman as been regarded as one of the world’s lead- essential members in their communities. ing trading venues, providing top-notch In 2005, EGX has become the first Arab market technology, innovative and flex- member in the World Federation of Ex- ible products and a transparent, efficient changes. Its executive chairman is also a platform. member of the executive committee of African Securities Exchanges Associa- EGX was first identified as the and tion (ASEA), the Vice Chairman of Fed- Stock Exchanges (CASE). eration of Euro Asian Exchanges (FEAS) It officially evolved from Alexandria’s and a founding member of the Union of Futures Market in 1885, when the first Arab Stock Exchanges. cotton transaction took place. It was then followed by Cairo Exchange, known as As a regional top player, EGX lives up equity trading platform, in 1903. After a to international standards. EGX imple-

EGX has become the first Arab member in the World Federation of Exchanges

4 The Egyptian Exchange: Efficiency

ments international standards that fulfill of its listed companies. EGX offers a every requirement for global exchanges. pool of market sectors for its investors It offers a dynamic trading platform to to choose among. Those sectors include assist issuers in attracting potential in- banks, chemicals, construction and ma- vestors to increase their capital with a terials, food and beverage, telecommuni- reasonable cost, ensuring integrity and cations, travel and leisure. Dividing the proper disclosure in the market. It has market into 17 sectors is aimed at pro- an endeavor to continuously update trad- viding the investing public with a clas- ing tools and mechanisms, giving more sification of the listed companies on the depth to the market. basis of homogeneous characteristics that relate to the companies’ economic EGX also offers a diversified package activities and main business revenues. of products for prestigious and sophisti- cated listing and trading. It is an efficient Furthermore, modest transaction and trading platform for equities, govern- listing fees and absence of restrictions ment/corporate bonds, and close-ended on foreign investment are among EGX mutual funds. advantages.

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

As a regional top player, EGX lives up to international standards. EGX implements international standards that fulfill every requirement for global exchanges.

Gateway to Finance 5 6 The Egyptian Exchange: Gateway to Finance 7 Enlisting your company in a public mar- tal to fund growth. Unlike private sources ket is a major decision. In many scenar- of capital like bank loans that are insuf- ios, it is one of the crucial steps not only ficient to support the expansion strate- for development of the company but also gies of successful companies, listing on to keep its institutional structure and the Exchange enables a better support to trade mark from desertion. It also en- capital and a global media profile. hances the horizontal and vertical means of growth of the company. Being the leading market of the region, EGX ensures a balance between protect- A professional market such as EGX ap- ing investors and preventing overbur- plies the latest trading and listing tech- dening companies with expensive and nological applications. The number of unnecessary obligations. Thus, main- listed investors on EGX reached around taining quality in selecting companies 2 million investors of the different seg- to list is also considered one of the main ments, individuals and institutions, and priorities of EGX. investment funds. EGX directs any brokerage firm that is Moreover, EGX offers a wide range of not listed should abide by its corporate benefits, including access to public capi- governance rules. A manual is set to

EGX offers a wide range of benefits, including access to public capital to fund growth.

8 The Egyptian Exchange: Opportunities

secure the understanding of the compa- Financial integrity and membership rules nies’ executives of their role in imple- are also key success elements for EGX. menting corporate governance princi- Local and foreign members are expected ples. The main purpose is to limit risks to follow to access and trade in the mar- arising from trading activities and de- ket. The rules are periodically reviewed fining clearly the member’s rights and to guarantee the application of business obligations. This in return increases the ethics, professionalism, and solvency. confidence of the different parties, and limits the conflict of interests.

Being the leading market of the region, EGX ensures a balance between protecting investors and preventing overburdening companies with expensive and unnecessary obligations.

Gateway to Finance 9 10 The Egyptian Exchange: Gateway to Finance 11 EGX offers a wide range of benefits that Listing on EGX grants the opportunity provide the company with the means to to respond to the companies’ main strate- respond to key strategic plans. 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- Gateway to Finance ture growth. Thus, listing is the keyword to pursue expansion through issuing ad- Through EGX, the company can access ditional securities to raise equity or debt the investors’ community and increase finance. the number and diversity of security

holders from large institutional investors to private investors local and interna- tional.

Foreign Participation by Foreign Participation by Region in 2012 * Country in 2012 *

Cayman Islands 4% UAE 5% Arab 29% Europe 41% Others Saudi 22% Arabia 15%

USA 23% UK 32% US & Canada 23% Others 7%

* After Excluding Deals

12 The Egyptian Exchange: Diversity

Prominent Profile incentive scheme. Offering the option of awarding employees incentives of the Being on the EGX board enhances your company’s shares for the high perfor- profile within the community of inves- mance creates a sense of loyalty in the tors as there is extensive media coverage sense of sharing the company’s growth. that creates a greater awareness of your products or services. Company credibility This media publicity adds to your com- (Regional Credible Profile) pany’s value and promotes the position and reputation of the company within its The Egyptian Exchange continuously particular industry. This also would be seeks transparency, which is a corner- favorable in terms of holding deals with stone of its main strategy. As compared suppliers, customers and potential inves- to other regional markets, EGX is con- tors. sidered the most transparent; thus en- hancing its credibility. Even at times of crises, EGX stands firmly stable when it Employees’ incentives comes to its investor base.

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

Gateway to Finance 13 Similarly, the newly adopted listing rules one of the best investment experiences promote corporate transparency and high to its domestic and international diverse disclosure standards. This facilitates for customer base. member companies and issuers to intro- duce comparative analysis for investors. Fulfilling its vision to serve and empow- And in turn, it boosts shareholders con- er investors as one of the fair, transparent fidence. and efficient capital markets in the region and the world, EGX has also recently launched the new automated surveil- Qualified Market lance trading system from “Millennium (World Class Trading Environment) IT”. It is an international best practice based surveillance system that provides EGX is always abreast with the latest in- an instantaneous warning mechanism ternational technological advancements and employs them. It has adopted new world-class trading system of Nasdaq OMX “X-Stream” solution, providing

the newly adopted listing rules promote corporate transparency and high disclosure standards

14 The Egyptian Exchange: Control

for any violations in the Egyptian capital er stock markets through which they market. can exchange experiences and increase means of cooperation.

International Presence Mergers and Acquisitions EGX has a strong regional and interna- tional presence. It is a member of the The daily market trading price of the World Federation of Exchanges (WFE), shares is a way of evaluating the per- the African Securities Exchanges Asso- formance of the company based upon ciation (ASEA), and the Federation of its strength in the market. This evalua- Euro-Asian Stock Exchanges (FEAS). tion is a critical component in the Merg- In addition, it is a founding member of ers and Acquisitions. Thus, being one of the Union of Arab Exchanges and an af- EGX listed companies paves the way for filiate member of the International- Or M&A. ganization of Securities Commissions (IOSCO). Also, EGX has signed many memoranda of understanding with oth-

Gateway to Finance 15 Benchmark the company Exit Strategy

As EGX has 17 sectors classifications, Being listed on EGX is the core of keep- it is very easy for the company to be ing and preserving the existence of the compared with its competitors. Thus, company name no matter who the share- these sector indices are very significant holders are. This gives the chance for for those who want to deeply look at the the main shareholder on their long-term industry participants and evaluate their strategy to plan for selling the whole performance. 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.

16 The Egyptian Exchange: Benefits

Listing Benefits

Mergers & Gateway to Finance Acquisitions

Prominent Benchmark the Profile company

Employees Incentives Exit Strategy

World Class Trading International Environment Presence

Gateway to Finance 17 18 The Egyptian Exchange: Gateway to Finance 19 A team of EGX experts is the gateway • The minimum allowed capital to be for your company to be on EGX trading listed is L.E 50 million or equivalent platform. It takes the company through in foreign currency and it shall be ful- easy stations to be on board and the first ly paid for the blue ships to be listed station is preparing the required docu- on EGX platform. On the other hand, ments to be submitted to the relevant de- it is also allowed to list the small and partment. Follows is introducing the of- mid capital enterprises (SMEs) whose fering prospectus in order to prepare the issued and paid in capital is less than company to be tradable on EGX trading L.E 50 million or equivalent in for- platform. Finally, the company’s shares eign currency on its specialized plat- are traded on EGX. form on EGX.

Main Issues You Need to Know • The company shall publish offering prospects that clarify the 10% to be • All securities should be centrally de- offered of the company’s shares. The posited. number of shareholders after the of- fering shall not be less than 500 share- • The company’s by-laws & the issuing holders whereby the main sharehold- terms should not include any restric- ers shall hold 25% of the company’s tions on the trading of the securities shares for 2 years from the offering to be listed. date. For the small and mid cap en- terprises, the number of shareholders • To list on EGX, the issuer must sign shall not be less than 25 shareholders an agreement with the Exchange and the number of shares shall not whereby the issuer agrees to abide to be less than 100 thousand shares; for the listing rules and ongoing obliga- the major companies, the share to be tions of EGX. listed shall not be less than 5 million shares. 20 The Egyptian Exchange: Listing

• There shall be at least a financial state- be less than the capital. For small and ment for one year before the listing mid sized enterprises (SMEs) that did request issued in accordance to the not issue a financial statement for a Egyptian Accounting Rules. It shall year, it can be exempted from this re- also be revised by a financial advisor quirement in case it has a 5 year future whereby it includes a 5% net profit of plan indicating the prospected profits the capital that is requested to be list- accredited by the nominated advisor ed and the investors rights shall not or an official financial advisor.

The company’s desire to list

Submit the listing documents Submit the disclosure report to the v to the Stock Exchange to study

Publish the disclosure report on Publish the listing request the trading system

Fulfilling the document and Present the prospectus on the studying the listing request trading system

Sign an agreement with the Adding the company stocks on Stock Exchange the trading data base Steps to List on EGX

An approval on the listing Execute the IPO in the OPR request is issued

Trading starts on the regular trading system

Gateway to Finance 21 22 The Egyptian Exchange: Gateway to Finance 23 EGX has always been an attractive fi- Trading starts when an investor gives an nancial hub regionally and internation- order to buy or sell a specified number of ally. Over the years, it has accumulated shares. The order is then queued into the and maintained a massive number of in- trading system until it matches a sell or vestors. In 2012 alone, 22 thousand new buy order. The company’s shares always investors were registered while in 2011, keep its value as EGX rules impose price 36 thousand joined. limits that control fluctuations through a 5 to 10% ceiling. Besides individual investors, EGX ap- peals to institutions especially foreign As a regional exchange, listing on the ones. Newly coded non-Arab foreign Egyptian Exchange is an aspiration for institutions captured around 71% of the many companies. In general, the Egyp- total number of newly coded institutions tian Exchange is for ambitious and ma- in 2012. ture companies that are confident in their ability both to utilize the benefits that The exchange has adapted a trading sys- EGX offers, while meeting the standards tem of Nasdaq OMX “X-Stream”. This of disclosure, governance and regulation system supports the increasing volume that it requires. of trading on EGX as well as the simul- taneous trading multiple product classes including equities, debt, commodities, ETFs, futures and options.

The company’s shares always keep its value as EGX rules impose price limits that control fluctuations through a 5 to 10% ceiling.

24 The Egyptian Exchange: Contact

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

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