Capital Market

Capital Market

The Egyptian capital market is one of the fundamental pillars of the national economy, as it provides a platform for mobilizing and channeling savings toward productive investments through the issuance and trading of securities, such as equities, bonds, and sukuk, across various sectors, thereby contributing to the achievement of sustainable economic growth.

The Financial Regulatory Authority (FRA) is the competent body responsible for regulating and supervising non-bank financial markets in Egypt, foremost among them the capital market, which represents a key driver of economic development and investment attraction. The Authority performs a dual role that combines regulatory and service-oriented dimensions, reflecting its comprehensive vision of striking a balance between protecting the market and investors on one hand, and facilitating the growth and development of economic activity on the other.

From a regulatory perspective, the FRA is responsible for establishing the legislative and regulatory frameworks governing the capital market, monitoring the compliance of companies and market participants with applicable laws and standards, and combating violations and market abuses that may undermine market integrity or harm investors’ interests. This supervision covers disclosure and transparency, fair trading practices, trade surveillance, and corporate governance, with the objective of ensuring market efficiency and fairness.

From a services-oriented perspective, the Authority’s responsibilities extend to facilitating the business environment by providing a range of services to investors and companies, including simplifying licensing and listing procedures, offering electronic service platforms, enabling financial technology solutions, and promoting investor education and awareness. The FRA also supports innovation and the diversification of investment instruments, which enhances the attractiveness of the Egyptian market and strengthens its regional and international competitiveness.

The integration of the regulatory and services-oriented roles is central to the Authority’s performance. The FRA seeks to achieve effective oversight without imposing undue burdens on investors or institutions, offering instead a flexible and balanced regulatory model that supports sustainable growth and safeguards the rights of all market participants.

Capital Market Activities

The Egyptian capital market encompasses a range of key activities, most notably:

• Trading in securities (equities, bonds, and sukuk)
• Portfolio management and investment funds
• Promotion and underwriting of public offerings
• Financial valuation and the preparation of fair value studies
• Central depository and registry activities carried out by Misr for Central Clearing, Depository and Registry (MCDR), aimed at facilitating the transfer of ownership of securities and ensuring safe and efficient settlement

Governing Laws and Regulations

The capital market is governed by several laws and regulations, most notably:

• Capital Market Law No. 95 of 1992 and its Executive Regulations
• The Central Depository and Registry Law and its Executive Regulations
• Regulatory decisions issued by the FRA

For capital market legislation via the Legislative Portal, (click here)

Governance and Compliance

Corporate governance plays a vital role in enhancing the investment environment and delivering multiple benefits to companies and their shareholders. Through its mechanisms, governance contributes to improving the efficiency of financial markets, most notably through compliance with accounting and auditing standards, the establishment of audit committees, and the implementation of internal and external audit functions. The effective and integrated application of governance mechanisms enhances disclosure and transparency, providing useful financial information to all market stakeholders, strengthening stakeholder confidence, and improving the efficiency of the securities market.

In this regard, the FRA works to entrench the principles of transparency, disclosure, and sound corporate governance through:

• Requiring companies to make periodic disclosures of financial statements and material information
• Monitoring institutions’ compliance with professional rules and standards
• Combating fraud, market manipulation, and money laundering within the market
• Promoting a safe investment environment that protects investors’ rights.

This is in accordance with FRA Board of Directors Decision No. (100) of 2020 on the Corporate Governance Rules applicable to entities operating in non-bank financial activities.

• FRA Services Guide

Capital Market Professionals

The FRA grants licenses to practitioners and professionals in the capital market in accordance with specific requirements. These licenses include:

• Independent Financial Advisor
• Investment Manager
• Promoter and Underwriter
• Investor Relations Officer
• Internal Compliance Officer
• Custodian
• Accredited Financial Valuer

Obtaining these licenses is subject to passing approved professional examinations and complying with professional rules and ethical standards.

Capital Market Data According to the FRA Annual Report 2024

The value of securities issuances (equities, bonds, and sukuk) in the primary market declined to EGP 535.5 billion in 2024, compared to EGP 601.7 billion in the previous year, representing a decrease of 11%. This was primarily attributable to a 6.7% decline in equity issuances (establishment, capital increases, reductions, and amendments), which amounted to approximately EGP 479.6 billion in 2024 compared to around EGP 514.1 billion in the previous year. Excluding the impact of the decline in capital reductions and amendments, the value of establishment and capital increase issuances rose by 16%, reaching approximately EGP 385.7 billion in 2024, compared to around EGP 332.5 billion in the previous year.

Issuances of non-equity securities (securitization and corporate bonds) also declined by 36.2% in 2024 compared to the previous year. This was mainly due to the increase in the Central Bank of Egypt’s benchmark interest rates from 9.75% in March 2022 to 27.75% in March 2024, which led to a reduced investor demand for fixed-income financing instruments owing to their higher cost, despite expectations of future interest rate cuts amid declining inflation.

Total trading value reached EGP 14,333.4 billion in 2024, compared to EGP 3,222.8 billion in 2023, representing an increase of 344.8%. This surge was driven by a significant rise in the trading value of government securities (including Treasury bills), following the commencement of Treasury bill trading at the end of September 2023. Trading in government securities increased by 428%, reaching EGP 13,135.1 billion in 2024 compared to EGP 2,487.6 billion in 2023. Equity trading value also rose to EGP 1,198 billion in 2024—the highest level in the history of the Egyptian Exchange—compared to EGP 735.1 billion in 2023, representing an increase of 63%.

In comparison with global exchanges, the EGX70 EWI Index ranked among the top-performing indices worldwide, recording a gain of 48.77%, followed by the EGX100 EWI Index with an increase of 42.35%. The EGX30 Index also rose by 19.47%, outperforming the stock exchanges of London, Japan, and Paris. At the Arab regional level, it outperformed the exchanges of Oman, Bahrain, Saudi Arabia, and Abu Dhabi, all measured in Egyptian pounds.

Market capitalization of listed equities increased as a result of higher share prices, reaching EGP 2,170 billion at the end of 2024, up from EGP 1,720 billion at the end of 2023.

During 2024, the FRA approved the establishment of seven new investment funds, in addition to three new issuances under existing multi-issuance funds. Accordingly, the total number of investment funds operating in Egypt reached 154 by the end of 2024, comprising 145 open-ended funds and nine closed-ended funds.

The net market value of units issued by all investment funds amounted to approximately EGP 155.9 billion at the end of 2024 (excluding funds currently under subscription).

Non-Banking Financial Activities

Non-Bank Financing

Non-bank financial activities constitute a core component of the modern financial system, playing an effective role in supporting economic growth and promoting financial inclusion through the provision of diverse financing services outside the framework of the traditional banking system. These activities encompass several vital areas, most notably mortgage finance, leasing, factoring, consumer finance, and financing for micro, small, and medium-sized enterprises (MSMEs).

Mortgage finance provides financing solutions that enable individuals to acquire residential units and enhance the capacity of real estate developers to implement their projects, thereby contributing to bridging the housing gap and supporting the construction and building sector. Leasing, in turn, represents an effective tool for financing productive assets without the need for immediate ownership, allowing institutions and companies to improve their operational efficiency.

Factoring provides companies with immediate liquidity through the purchase of their receivables from customers, thereby helping to improve working capital cycles. Consumer Finance addresses the growing needs of individuals to acquire essential goods and services through accessible and flexible financing solutions, which in turn stimulates domestic demand.

Microfinance also plays a critically important role in empowering low-income segments, particularly micro-entrepreneurs, by enabling them to access the necessary financing to improve their living standards and contribute to the formal economic activity.

Laws Governing Non-Bank Financial Activities in Egypt

The Law Regulating Leasing and Factoring Activities, promulgated by Law No. (176) of 2018

• The Mortgage Finance Law, promulgated by Law No. (148) of 2001
• The Law Regulating the Practice of Financing Micro, Small, and Medium Enterprises, promulgated by Law No. (141) of 2014
• The Law Regulating Consumer Finance Activities, promulgated by Law No. (18) of 2020
• Regulatory decisions issued by the Authority

To view the legislations governing non-bank financial activities via the Legislation Portal, click here.

Governance and Compliance

The Financial Regulatory Authority (FRA) works to entrench the principles of transparency, disclosure, and sound governance through the following measures:

• Requiring companies to make periodic disclosures of their financial statements and material information
• Monitoring the extent of institutions’ compliance with professional rules and standards
• Combating fraud, manipulation, money laundering, and the financing of terrorism within the non-bank financial sector

Professionals Operating in the Non-Bank Financial Sector

The Authority grants licenses to practitioners and professionals operating in the non-bank financial sector in accordance with specific regulatory requirements. These licenses include:

• Real Estate Agent License
• Asset Revaluation Expert License
• Real Estate Valuation Expert License
• Mortgage Finance Broker License

Obtaining these licenses is conditional upon passing approved professional examinations and adhering to professional rules and ethical standards.

Non-Bank Financial Sector Data according to the FRA Annual Report for 2024

First: Mortgage Finance

Mortgage finance companies extended EGP 25.5 billion in financing to their clients in 2024, compared to EGP 10.4 billion in the previous year, representing a growth rate of 144.9%.

Second: Consumer Finance

Consumer finance is the most recent non-bank financial activity to fall under the supervision of the Financial Regulatory Authority, pursuant to the Consumer Finance Law (Law No. 18 of 2020), which designated the Authority as the competent regulator. The value of consumer finance extended amounted to EGP 61.3 billion in 2024, compared to EGP 47.3 billion in 2023, achieving a growth rate of 29.6%.

Third: Leasing and Factoring

The value of leasing contracts reached EGP 118.9 billion in 2024, compared to EGP 117.5 billion in the previous year, recording an increase of 1.2%.

The total value of factored receivables amounted to EGP 74.6 billion in 2024, compared to EGP 44.0 billion in the previous year, achieving a growth rate of 69.4%.

Fourth: Financing of Micro, Small, and Medium Enterprises

The outstanding balances of financing extended to MSMEs reached EGP 80.5 billion at the end of 2024, compared to EGP 57.1 billion in the previous year, reflecting an increase of 41%.

The number of beneficiaries stood at 3.7 million at the end of 2024, compared to 3.8 million in the previous year, representing a decrease of 2.3%.

The total value of financing extended to MSMEs amounted to approximately EGP 95.8 billion at the end of 2024, compared to EGP 72.6 billion in the previous year, recording a growth rate of 31.9%. The number of beneficiaries reached 3.4 million in December 2024, compared to 3.7 million at the end of 2023.

Fifth: Movable Collateral Registry

The Movable Collateral Registry is an electronic system that enables the registration of rights and security interests over movable assets—such as equipment, inventory, vehicles, or receivables—with the aim of facilitating access to finance for individuals and enterprises, particularly small and medium-sized enterprises, by allowing such assets to be used as collateral instead of relying solely on real estate.

This registry represents an important step toward improving the business environment and expanding opportunities for secured lending in the Egyptian market, as it enables creditors to verify the existence of valid collateral prior to extending financing, thereby reducing risks and enhancing confidence among market participants.

The (FRA) is responsible for overseeing the regulation and management of the Movable Collateral Registry, ensuring the protection of rights, enhancing transparency, and providing an integrated legislative framework in line with international best practices.

The registry is governed by:

Law No. 115 of 2015 on the Regulation of Movable Collateral

• The Executive Regulations issued by Prime Ministerial Decree No. 108 of 2016

The FRA Board of Directors’ issued Decision No. 145 of 2016 concerning the assignment, establishment, and management of the registry to a specialized company.

To view the legislation governing movable collateral activities via the Legislation Portal, click here.

The electronic Movable Collateral Registry was launched in March 2018. From its inception until the end of 2024, the estimated value of registered security interests over movable assets reached EGP 3.1 trillion, with approximately 202,000 registrations recorded. The value of registrations increased by approximately 24.5% in 2024 compared to the previous year.

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