CAIRO: Egypt’s stock market will launch a commodities exchange April-May 2009 that will trade in several agricultural and industrial products, said Minister of Investment Mahmoud Moehieldin on Thursday.
“In today’s world, investors are keen on trading in primary commodities . particularly in agricultural products due to spiraling costs of food products, he said. “Several stock markets around the world trade in commodities exchanges, and we are looking into following suit in Egypt.
Officials expect Egypt’s commodities exchange to be up and running by summer 2009. The commodities market will begin trading in at least five primary commodities such as wheat, rice, cotton, sugar, metals, and cement.
Senior government officials said in 2006 that they planned to liberalize Egypt’s grains, cotton and sugar markets by pushing for a futures market. Egypt is one of the world’s biggest wheat importers, with wheat imports towering over 7 million tons last year. It also imports sugar. It produces about 4 million tons of milled rice a year and consumes about 3.2 million tons.
Talks of an Egyptian commodities exchange began as early as 2007. Maged Shawky, chairman of the stock exchange, announced in March 2007 that the commodities market would be independent and that the Ministry of Investment would send out requests for proposals for it soon. He added that the stock exchange would put together a consortium and bid strongly for the commodities exchange.
The Egyptian stock exchange also revealed the same year it was in talks with the Dubai Gold and Commodities Exchange (DGCX) on the possibilities of a joint study on the exchange, Shawky added. The DGCX is the only gold and commodities exchange in the Middle East.
Officials at that time said the Egyptian commodities exchange would launch in 2008.
In a related development, Minister Mohieldin said that changing the name of the Cairo and Alexandria Stock Exchanges into the Egyptian Stock Exchange would allow for trading nationwide.
“Trading is no longer confined to one location, but it is rolled out across all Egyptian cities, he explained. “Having presence in every Egyptian city will boost trading on the bourse.
He added that the Egyptian stock exchange has been revamped in recent years in terms of size of trading, listing procedures, transparency and disclosure regulations, and types of trading. “The capital market is now hovering over 115 percent of GDP, compared to 33 percent of GDP in 2003.
