Head of the Egyptian Stock Exchange Mohammed Farid said that preliminary measures have already been taken to establish a futures contracts market in the country after international financial institutions have shown their desire to sign contracts on certain Egyptian products.
In statements to Asharq Al-Awsat on the sidelines of the meetings between the International Monetary Fund (IMF) and the World Bank in Washington, Farid explained that “most emerging markets have contracts markets, as demonstrated by the request from some international financial institutions to sign contracts on Egyptian products.”
He added that the Egyptian stock exchange will attract new investors during the coming period in light of the new proposals that will be received by the primary market soon, but the volume and value of liquidity will witness a leap.
He pointed out that before starting to prepare for the contracts markets, they are “activating the sale of borrowed securities, which is important in contributing to the pricing of contracts markets in general and increasing trading rates.”
Efforts are being made to reduce the suspension time from 30 to 15 minutes in cases of temporary suspension of securities, in order to increase the liquidity rates so that the market can build contracts market with good transactions in the future, he revealed.
“The steps we are currently preparing for are to first have the legislative framework. We already have amendments to the level of the capital market law, which is supposed to be discussed in the parliament. It proposes the regulating legislative framework for the different markets and bourses.”
“Then, we have start to work on the different requirements, whether technological at the level of trading, or in regards to the settlement of these contracts or others associated with financial risk management and settlement of these securities,” Farid added.
Farid, who took office last August, is considering raising the 250-share capital increase and demanding that these increases be recorded.