Country PresentationCASE Vision & Plans

Dr. Shahira Abdel ShahidAdvisor 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 1903.

5th 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 2005.

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

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 2005.

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 1933.

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 4th version of its web site www.egyptse.com 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

o A 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 2003.

o CASE 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.

o Encouraging tours from university students.

CASE Public Awareness-2

o CASE 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).

o More 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 2005.

Introduce margin trading, to be followed by

short selling & Internet trading, before end of

2005.

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 2006.

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 2005.

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(

87.5

76.6

59.1 58.6

-4.0

24.124.624.6

125.7

-0.8-0.2

4.16.57.88.6

118.2

45.4 45.0 44.540.7 38.5

30.520.0 18.4 17.6 16.5 11.8

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

32.8 31.9 31.725.5

20.0

12.0

38.9

10.77.8

3.35.2

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60.5

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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 2005.

• 125 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

2004-31 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 StatisticsNo. of Listed Shares Millions

(2000 – August 2005)

4,673

5,433 5,6006,218

6,5737,222

0

2,000

4,000

6,000

8,000

2000 2001 2002 2003 2004 2005

Market StatisticsTotal Volume Traded Million

(1993 - August 2005)

1,108 1260

904

1,422

2,435

1,622

2,911

0

500

1,000

1,500

2,000

2,500

3,000

2000 2001 2002 2003 2004 Jan-Aug 04 Jan-Aug 05

Market StatisticsTotal Value Traded US$ million

( 2000 - August 2005)

13,814

6,9127,397

4,514

6,808

3,846

15,239

0

4,000

8,000

12,000

16,000

2000 2001 2002 2003 2004 J an-Aug 04 J an-Aug 05

Market StatisticsTop Sectors in Terms of Market Cap

(August 2005)

1.8%1.8%2.2%6.2%

33.8%

25.5%

10.0%

4.2% 3.7% 3.6%

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Total Market Capitalization= $ 59,582 million

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

Foreigners28%

Egyptians72%

Total Value Traded on Market )listed securities( = $ 2,165 Million

Market StatisticsComparative Valuation of S&P/IFCG IndexesP/E ratio vs. Dividend Yield )August 2005(

0.00

10.00

20.00

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0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00

P/ E Ratio

EgyptHungary Peru

China

Mexico

Morocco

Czech Republic India

Jordan

South Africa

Saudi Arabia

DY %

Thank You