Current economic reform program is different: Farid

CAIRO – 18 September 2017: The Egyptian Exchange (EGX) Chairman Mohamed Farid praised Monday the economic reform program, noting that although it has been implemented before, this time is different.

At the two-day Euromoney Egypt Conference which kicked off in Cairo Monday, Farid highlighted that the reforms are not about reducing the budget deficit through cutting energy subsidies, but about addressing the core issues hitting the whole economy.

"Every time we did not resolve the problems from the roots, but took them marginally," Farid said.

The EGX Chairman pinpointed to the One Stop Shop, saying that it was only implemented partially before but now we can say that it is fully implemented.

Talking about the companies’ listing on the EGX, Farid said that the number of listings is not the important factor, but the size and quality of the firms and how they will contribute to the market.

"Number is irrelevant but the quality and the approach the firms adopt when they come to the EGX… We seek to attract firms with entrepreneur spirit to finance its growth," Farid noted.

Farid highlighted that a committee was formed with all relevant jobs to foster the listing of the state-owned enterprises.

Offering is not only about attracting new investors, but will lead to reorganizing the companies' capitals and improve governance, Farid added.

Speaking about financial inclusion, Farid stressed on the fact that financial literacy is something that will be addressed, pinpointing that a part of pension funds is used in capital market investment.

"Twenty-five percent of the gross domestic product (GDP) that contributes to meeting the financial gap shall be financed through saving schemes," Farid said.

Farid added that hot money would help the economy as it would be financing deficit at lower rates, either in fixed income or equity markets.

"The ultimate target is trying to fixing the problem from roots which will lead to attracting hot money, foreign direct investment (FDI) and all forms of investments," Farid said.

The EGX chairman added that hot money will reduce the burden on the financing sector and will allow investors to exit the market easily.