Country Presentation CASE Vision & Plans Dr. Shahira Abdel Shahid Advisor to the Chairman 11 September 2005 (CASE)

Topics Overview of CASE CASE Strategic Vision CASE Competitive Advantage CASE Recent Developments CASE Ongoing Plans Latest Market Statistics

Overview of CASE-1  Starting in the 1880’s= Alexandria 1883, Cairo  5 th Largest Exchange in the World in the 1940’s.  Active Role through the 1950’s.  Dormant for three decades due to socialist & central planning systems.

Overview of CASE-2  Re-emergence in 1992 (Capital Market Law, Privatization Program & private placements whereby private companies started tapping the capital market).  CASE started its modernization program in 1997, the Exchange is currently implementing another phase of its modernization to meet the challenges of globalization, competition & internationalization of markets.

CASE Strategic Vision  Goal----operate a quality market through enhancing regulation & market infra- structure.  Geographical focus------Egypt, Middle East & Africa.  Business Focus on core market operations such as trading, information services & market systems.

Building a Quality Market Improve market infrastructure. Increase market liquidity. Foster transparency & corporate governance culture. Raise customer satisfaction & investor confidence. Improve investor education & information dissemination.

CASE Competitive Advantage-1 One of the most open financial markets in the Middle East North Africa (MENA) region- free float of CASE 30 Index reached 40% end of June No dividends, capital gain taxes & stamp duties. No controls on foreign investment or investors. No restrictions on foreign securities firms (brokers) or issuers.

CASE Competitive Advantage-2 No restriction on the repatriation of capital & dividends. Active retail & institutional participation. Settlement is t+1 for government bonds, t+2 for most active stocks list & t+3 for remaining securities, following international standards. Foreign investors represented 30% of total trading in 2004 & over January-June 2005.

CASE Competitive Advantage-3 Low listing/trading fees in relation to MENA region. Well diversified sectors/companies are listed on CASE including communications, financials, petrochemicals, building materials, consumer goods, tourism etc. Egypt is included in MSCI, FTSE and S&P/IFC indices. Local presence of international investment banks & custodians e.g. Citigroup, HSBC, American Express etc.

CASE Competitive Advantage-4 Presence of large foreign institutional investors including Merrill Lynch, JP Morgan, Morgan Stanley, Arab funds, emerging funds, high net worth individuals. High dividend yield on average 7% in the last three years. Attractive P/E ratio on average 12 times in the last three years.

CASE Framework Ministry of InvestmentCentral Bank of Egypt (CBE) General Authority for Mortgage Financing Companies Real Estate Valuation Experts Mortgage Financing Intermediaries Mortgage Financing Agents Mortgage Financing Activities Guaranty & Subsidizing Fund Higher Council for Insurance Public Insurance Companies Private Insurance Companies Reinsurance Companies Capital Market Authority (CMA) Cairo & Alexandria Stock Exchanges Clearing & Settlement & Depository Investment Banks Brokers Asset Management Firms Primary Bond Dealers Venture Capital Rating Companies General Authority for Investment and Free Zones Corporate Companies Free Zones Industrial Parks Public Banks Private Banks Joint Ventures Foreign Banks Specialized Banks

CASE International Affiliations  CASE is an Affiliate member of WFE, expected to be a Full member of WFE next November  Member of ASEA, FEAS, Union of Arab Stock Exchanges.  Signed joint agreements with most Arab exchanges including Kuwait, Morocco, Oman, Bahrain, Jordan, Sudan & Abu Dhabi.  Signed MOU with London, Madrid, Korea, Johannesburg, Malta, Malaysia, India, China etc.

Egypt for Information Dissemination-1  Egypt for Information Dissemination (EGID) was established in 1999 as a fully-owned subsidiary of CASE to enhance market transparency.  EGID combines technology with information to improve the efficiency of financial markets in the Middle East North Africa (MENA) region.

Egypt for Information Dissemination -2  EGID transmits CASE data internally & externally such as Reuters & Bloomberg etc.  EGID avails CASE issuer information using several delivery channels, latest of which, is mobile phones.  EGID develops market software solutions for exchanges such as Surveillance & Disclosure Systems.

CASE Regulatory Developments-1  In April 2003, the SEC approved CASE as a designated offshore securities market under Regulation S of the Securities Act of This classification is in recognition of high standards attained by CASE.  CASE implemented new listing rules in 2003, which improved corporate governance & disclosure practices for issuers.

CASE Regulatory Developments-2  Continuous review of trading rules to meet market needs such as Liquid versus Less-liquid market, Primary Dealers Market, removing price cap on 35 most active stocks, re- arranging the OTC market.  CASE has new membership since 2004 rules which categorizes members according to activities, ensures financial integrity of members, their professionalism, fair dealings with customers, etc.

CASE Technological Developments  CASE implemented an enhanced version of its developed Surveillance System in 2004 that included more features & functions to ensure investor protection & fairness.  CASE developed a Primary Dealers System, which was implemented in November 2004 for government securities.  Linking CASE trading system with the clearing & settlement system of MCDR (in a step towards having a seamless Straight Through Processing Solution).

CASE Information Dissemination  CAE re-launched 4 th version of its web site on 1 September 2005, which includes additional features & information about CASE vision, rules & regulations, products, material news of listed companies, members, market data, etc.  Strengthened the Disclosure Department to provide market participants with timely & useful information.  Enhanced the quality of information provided by EGID.

CASE Public Awareness-1 oA public awareness campaign through Stock Riders games & publications in sports clubs & universities. CASE in coordination with the Ministry of Communications has provided on- line education through Stock Riders Out Reach Program since oCASE will hold its annual Borsa Step by Step Event in November 2005, which is a forum including CASE, MCDR, CMA, market participants & the public at large. oEncouraging tours from university students.

CASE Public Awareness-2 oCASE has successfully conducted two educational programs in Egypt’s largest & oldest universities i.e. Cairo & Ain Shams in the first half 2005, covering the basics of investment in the capital market. The programs were well received by students (more than 100 students in each university). oMore educational programs will be conducted in other universities in order to educate prospective investors about the basics of investment in the capital market.

CASE Ongoing Plans-1  Introduced intra-day trading rules on 9 August  Introduce margin trading, to be followed by short selling & Internet trading, before end of  Encourage listing & trading of Islamic products on CASE (Co-organized for the first time a conference on Islamic finance with HSBC Egypt & HSBC Amanah).

CASE Ongoing Plans-2  Introduce ETFs on CASE 30 Index in  Link CASE electronically with 30 top issuers to disseminate information online i.e. provide a facility like Regulatory News Service at LSE by end of  Encourage blue chips from Egypt & MENA region to list on CASE. The first of which was Raya Holding. CASE is in discussions with other issuers locally & regionally.

Main Trading Statistics-1 CASE 30 Index a free-float market capitalization weighted price index. It includes the top 30 companies in terms of liquidity. CASE 30 surged by 134% in 2003, 122% in 2004 & 87.5% end of August 2005: due to Egyptian pound flotation January 2003, new Cabinet & new laws (taxes & customs), speed up of privatization sales, sound corporate results, CASE strong efforts to enhance disclosure.

Performance of MSCI-Egypt vs. other Emerging Markets (Jan 2004 – December 2004)

Performance of MSCI-Egypt vs. other Emerging Markets (Jan 2005 – August 2005)

Main Trading Statistics-2 CASE 50 or Liquid Market accounted for more than 75% of total trading. Market Capitalization amounted to $ 59.5 billion end of August brokerage firms where the top 30 brokers accounted for 80% of business volume. Average daily turnover amounts to $ 100 million.

Main Trading Statistics-3 P/E ratio = 16 Dividend Yield = 5% Government securities market witnessed more activity over the period (4 November August 2005) i.e. $ 1,529 million after the implementation of Primary Bond Dealers System. 9 GDRs listed on London Stock Exchange, one on Luxembourg Exchange & one on NYSE.

Market Statistics No. of Listed Shares Millions (2000 – August 2005)

Market Statistics Total Volume Traded Million ( August 2005)

Market Statistics Total Value Traded US$ million ( August 2005)

Market Statistics Top Sectors in Terms of Market Cap (August 2005)

Market Statistics Egyptians vs. Foreigners in terms of Value Traded (August 2005).

Market Statistics Comparative Valuation of S&P/IFCG Indexes P/E ratio vs. Dividend Yield (August 2005)

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