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UAE-Egypt capital markets ties are growing stronger

By Hamed Ali Published on 15-Mar-2015

Capital markets cooperation between Arab countries is key to unlocking their economic potential and promoting the prosperity of their people. While significant progress has been made over the years, there is plenty of scope for faster development. So it is gratifying to see that in recent months significant steps have been taken linking the markets of the UAE and Egypt.

This is one of the Arab world’s most important relationships, and not only because they are respectively the 2nd and 3rd largest Arab economies, with GDP of 402 billion dollars and 271 billion dollars, according to IMF figures. Links between the two nations are especially important because both economies are currently enjoying growing investor confidence and strong growth prospects, during a time of uncertainty across much of the rest of the region. The UAE and Egypt are positioned to take a lead in capital markets collaboration for the benefit of the whole MENA area.

Nasdaq Dubai and Misr for Central Clearing, Depository and Registry (MCDR) signed a far-reaching agreement in November 2014, paving the way for companies to dual list on both the Egyptian Exchange and NASDAQ Dubai. The technical details concern clearing, enabling fungibility of shares on both exchanges. The commercial possibilities that flow from this are dramatic. For the first time, Egyptian companies now have the opportunity to list on an international exchange in their home region, giving them access to investors around the world, while at the same time enjoying a fully complementary listing in Cairo. Earlier this month Orascom Construction, one of the leading names in Egyptian business, became the first company to take advantage of this new infrastructure.

This framework is available to support enterprising Egyptian businesses as they seek more capital, to benefit from an upsurge in economic activity. Egyptian GDP is likely to grow nearly 4% this year, according to the IMF. As a leading centre for Sukuk and conventional bonds, Dubai is also an ideal venue for listing Egyptian debt issuances. And with plenty of prominent financial institutions traditionally active in both Cairo and Dubai, there is no shortage of experts ready to advise Egyptian companies wishing to list a broad range of asset classes in the Emirate.

Capital markets collaboration between the two nations complements the growing links in other areas. We see a clear synergy, with Dubai offering Egyptian issuers enhanced investor access regionally and internationally, while Egyptian firms’ presence in Dubai offers investors access and exposure to Egypt. This is but one of many collaboration opportunities between the two markets.

The UAE’s commitment to Egyptian economic development was reaffirmed during the Egypt the Future conference held this month, with a further USD 4 billion of support being pledged on top of the billions of dollars already committed. New projects in Egypt range from construction and transport to energy and health. Dubai’s exchange architecture structure stands ready to support this activity.

About the author

Hamed Ali
Chief Executive Officer, Nasdaq Dubai
Hamed Ali

Mr Ali was appointed Chief Executive Officer in July 2013, after serving as Acting Chief Executive Officer since August 2012. He previously served as Executive Director of Nasdaq Dubai from 2006 to 2008. His experience includes serving as Chief Operating Officer of DIFC Authority and most recently as Executive Director at the Dubai Knowledge & Human Development Authority.

Mr Ali played a key role in the development of the Dubai Strategic Plan 2015 and participated in number of strategy development exercises. These included Nasdaq Dubai’s strategy in 2006 where he had the role of overseeing the implementation of the Market of Markets strategy expanding the exchange’s activities beyond the equity and debt markets into derivatives and other sectors.

Mr Ali holds an Executive MBA from London Business School, a B.Sc. in Applied Computing from Leeds Metropolitan University, and a Master Certificate in Project Management.

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