Nile Stock Exchange (NILEX), the market for small and medium enterprises in Egypt, expects trading value to hit the EGP 1 billion (USD 143 million) -mark by the end of the year, chairman of the Egyptian Exchange (EGX), Mohamed Omran, told Zawya.
"We are studying transferring companies with capital of less than EGP 50 million from EGX to NILEX to increase market liquidity," said Omran, who also heads NILEX. He said this would require regulations obliging investors to hold shares for specific period.
"The SME industry represents 90% of the Egyptian economy and we expect the listing of 50% of this activity on NILEX over the next five years. The market is an important source of liquidity for small investors and will help them maintain operations," Omran added.
Small and medium companies whose issued capital does not exceed EGP 50 million can list on NILEX, with the stipulation that issued capital should not exceed EGP 100 million after listing. The regulations also state that issued capital should be fully paid and that the number of issued shares to be listed should not be less than 100,000 shares. Minimum shares offered should not be less than 10% of total issued shares and the number of shareholders should not be less than 25.
Companies in the non-banking financial services sector are not eligible to list on the NILEX market.
Omran said trading values increased to EGP 750 million at the end of 2013 from EGP 248 million a year earlier. He expected the figure to hit EGP 1 billion by the end of 2014.
He attributed this growth to recent measures aimed at developing the market, including launching an index to track SME performance in 2011, moving from an auction trading system to continuous trading, and extending trading hours to four hours from one hour in 2013.
NILEX is the first market for SMEs to be set up in the region. It started with 16 companies in 2010 and the list has grown to 22 companies, with eight firms waiting to be listed, most of which operate in the fields of information technology, communications and textiles.
© Zawya 2014
