The Egyptian Exchange has recently achieved many leaps. In 2004, it provided an ideal channel for attracting national and foreign investments.

 This is attributed to the remarkable level of economic performance as a result of reform measures adopted by the government. The said reform measures included reducing custom tariffs, amending tax laws and improving investment climate. However, the new monetary policies followed by the Central Bank of Egypt (CBE), leading to stability in the exchange market, which coincided with banking reform measures including the expansion of ownership base of the joint-venture banks and merging or raising the capital of small banks. The most outstanding success was the enhancement of the settlement guarantee fund, which brought discipline into the market through decreasing outstanding operations.

In November 2005, the Cairo & Alexandria Stock Exchanges acceded as a full-fledged member to the International Federation of Stock Exchanges during the 45th meeting of the Federation's Board of Directors held in India form October 31 to November 4, 2005; thus becoming the first Arab member of the Federation.

Egypt's membership represented a significant indicator for many international capital market and investment institutions to the investment climate in Egypt. On the other hand, ABN-AMRO, an international investment bank will be releasing to world markets documents derived from the "CASE 30" indicator. This unprecedented step for the Arab stock markets would enhance the position of the Egyptian Stock Exchange as an emerging market. It also reflects growing confidence by international institutions in capabilities of Egyptian market and economy.

On the other hand, the government's policy of privatization and floatation of many state-owned companies, attractive to private investors, including AMOC and Sidi-Krir, led to the flourishing of the stock market in 2005 especially after some companies, such as AMOC and Sidi-Krair.

Telecom Egypt Company is among those companies floated for subscription in the stock exchange. In late November 2005, the cabinet approved the public floatation of 340 million shares accounting for 20 per cent of a total of 1.7 billion Telecom Egypt shares. Floatation were offered in two tranches; the first (10%) representing 170 million shares for institutions, funds, portfolios and anchor investors on both national and international levels. The second (10%) was offered for public subscription for individual investors Egyptians, Arabs or foreigners at LE 14.80 per share. One per cent - equivalent to 17 million shares - of the offer has been reserved for the company's employees at a reduced price of LE 12 per share.

Subscription for the company's shares was opened from December 1, to December 8, 2005. As at the close of offering, the volume of share requests hit 1.5 billion shares. Offered shares were 10 times underwritten, with an allocation ratio of 10.6 percent; representing an unprecedented case in the history of stock exchange.

At the same time, the private placement of the company's shares showed an unprecedented record where the requests exceeded 65 times the volume of private placement, accounting for 50 per cent of the total offering by 65 times, with an allocation ratio of 1.8 percent for each company at a price of LE 15.56 per share.

The Egyptian government affirmed in a statement, after the close of the subscription process, that Telecom Egypt's shares attracted LE 5.125 billion, representing the proceeds of offereing 20 per cent of the company's shares for account of the Public Treasury, rising at 2.5 per cent above the approved ratio. Minister of Communication affirmed that private subscriptions from United States, Britain and Europe reached more than 1.1 billion shares; reflecting confidence in the economic performance and encouraging investment funds in said countries to increase their investment in Egypt.

The minister pointed out that Credit Suisse First Boston (CSFB), the lead manager, stressed that the offering was successfully conducted in full transparency and in record time, thus marking the biggest international offering in the history of the Middle East. He added that the substantial demand by individuals, institutions and investors reflected confidence in the reform measures in Egypt and economic performance. This high demand can boost stock exchange trading and investment culture in Egypt in general.

The listing of Telecom Egypt shares for trading on December 14, 2005 resulted in an increase in the market capital of securities dealers to about LE 400 billion. The value of traded listed shares and bonds increased to LE 14 billion as compared to last November.

It must specifically noted that all trading indices showed an upward trend; with the Capital Market Index rising by 1.90 percent, CASE by percent 2.65 percent, FG by 0,71 percent Hermes by 1.76 percent, Primer Privatization by 3.60 percent and CIB Investment by 5,13 percent. The International Certificates of Deposit Index rose by 0.80 percent and ratio of market capital ratio rose by 73 percent of gross national product. The ratio of traded bonds, including those traded by anchor dealers during December 2005 increased to about 5,8 percent of total value of trading.

For their part, stock exchange experts and operators stressed one of the gains of floating 20 percent of Telecom Egypt shares was the introduction of about 300,000 new investors into the securities market for the first time; thus bringing the total number of securities investors to 1.75 million. This would deepen the market and activate its mechanisms over the coming period. They noted that the experience indicates that the capital market in the Egyptian stock exchange goes on the right way.

At the same time, experts pointed out the first day of refunding amount in excess of subscription witnessed many surprises. Most significant was that more than 70 percent of the subscribers decided to reinvest the refunded amounts which they paid for purchasing Telecom's shares in other traded company shares. This indicates that further record leaps can take place over the coming period. This explains how influential the offering of the Egypt Telecom sharers was in promoting the stock market.