الهيئة العامة للرقابة المالية

Dr. Islam Azzam:
• Derivatives market is set to become a primary draw for youth… An integrated project to provide all market data and information in both Arabic and English
• Market Maker mechanism will boost liquidity, and we are considering incentives to activate carbon credit trading.
• Evolving investment patterns necessitate intensified awareness of non-banking financial activities.

Dr. Islam Azzam, FRA Chairman received a delegation from Bloomberg, currently visiting Egypt. During the meeting, he reviewed ongoing development efforts in the Egyptian Capital Market and their transformation into tangible results regarding liquidity, market depth, and the attractiveness of institutional and foreign investment.

Dr. Azzam outlined FRA’s strategic framework for market oversight and development, focusing on diversifying financial instruments, optimizing pricing efficiency, and elevating disclosure standards. He underscored Egypt’s evolution from a conventional market into a sophisticated, multi-asset ecosystem equipped with robust risk management tools and advanced investment alternatives.

He explained that the new trading system developed by the Egyptian Exchange (EGX) in cooperation with Nasdaq will be activated soon. It will provide integrated trading for equities, fixed-income instruments, derivatives, and carbon credits, thereby increasing order execution efficiency, settlement speed, and risk management.

Dr. Islam Azzam highlighted the significance of the steps following the launch of derivatives market, such as the introduction of EGX30 index futures on the Egyptian Exchange. He noted that work is underway to make option contracts available in the coming period and to activate market maker activities. Furthermore, the final step in activating short-selling mechanisms has been completed through the integration between brokerage firms and Misr for Central Clearing, Depository and Registry (MCDR).

Dr. Azzam noted that launching option contracts within the coming year will provide vital hedging and risk management instruments, essential for attracting new institutional capital. Furthermore, the activation of market-making mechanisms is expected to drive higher daily liquidity levels, thereby strengthening price discovery and market efficiency.

Addressing the secondary market, Dr. Azzam detailed a suite of measures aimed at streamlining listing and trading protocols to accelerate market accessibility. The FRA is leveraging fintech solutions and innovative outreach channels to cultivate a high-liquidity environment supported by a broader, more diversified investor demographic.

He revealed that the Authority is working on an ambitious project to make all data and information across the markets available in both Arabic and English. This will achieve three goals: attracting new investors by informing them of current developments, ensuring full connectivity with market participants, and enabling FRA, federations, and companies to perform advanced analytical operations to support accurate future decision-making and policy efficiency.

Dr. Azzam emphasized that derivatives markets are expected to become a primary attraction for young investors. He pointed out that the 18-to-40 age group now accounts for approximately 79% of all market participants, a clear signal of the rising appetite among younger generations for sophisticated financial instruments.

He also noted that newly introduced investment funds, including gold and silver funds, recorded high participation from youth at approximately 80%. This reflects a qualitative shift in their saving and investment patterns, which also necessitates intensified awareness efforts to ensure sound investment decision-making.

Additionally, FRA Chairman emphasized that the Authority adopts an integrated approach to spread awareness, such as collaborating with the Ministry of Education to integrate financial literacy into the secondary school curriculum. This is in addition to developing interactive digital content that explains investment concepts and risk management in simplified language to raise financial awareness across broader segments of society.

Dr. Azzam further noted that the launch of the Voluntary Carbon Market represents a strategic milestone in integrating Egypt’s financial ecosystem with global markets. He revealed that the Authority is currently evaluating a framework of incentives designed to activate carbon credits trading.

The meeting addressed ways Bloomberg can contribute to support Egyptian markets, particularly in providing advanced data and analytics to foreign investors, supporting transparency and disclosure quality, and participating in financial awareness programs. Discussions also covered the transfer of international expertise in derivatives markets and sustainable investment.

Members of the delegation confirmed that introducing derivatives, activating carbon market, and updating technological infrastructure are attractive elements for international investors, as they ensure market efficiency and expansion. They also expressed a keen interest in sharing Egypt’s experience in these specialized fields.