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    ITIDA and EGX Sign MoU on Supporting Egyptian ICT Companies

    Date published: 15 May 2012

    Omran: We Call on All ICT Companies to Make the Most of EGX Listing for Development Opportunities

    El-Kady: Cooperation between ITIDA, EGX Initiates Doubling of Companies' Capitals, Penetration of New Markets

    Information Technology Industry Development Agency (ITIDA) and Egyptian Exchange (EGX) signed this morning a memorandum of understanding. The agreement endorses bilateral cooperation in fostering and supporting information and communication technology (ICT) companies, especially those interested in being listed in the stock market of small and medium sized enterprises (SME)s, NILEX.

    The MoU, signed by ITIDA CEO Eng. Yasser ElKady and EGX Chairman Dr. Mohamed Omran, aims to boost collaboration between the two parties in supporting and financing ICT SMEs, considering them an economic driving force and one of the major pillars of socio-economic development. The agreement further offers an opportunity for investors to diversify their investments in the stock exchange.

    Such an initiative is the first of its kind, whose main purpose is bilateral cooperation in providing technical support and consultancy for SMEs. This in turn will help with the SMEs' development and sustainability in the market.

    Based on the agreement, EGX will acquaint the ICT companies registered in ITIDA database with the benefits of being listed in NILEX as one of the financing sources. EGX will also urge registered EGX sponsors to offer highly effective consultancy services in the business fields of NILEX. This in turn will help these projects identify the problems they face and find solutions that are likely to raise productivity and help them continue operating in the market.

    On its part, ITIDA will support ICT SMEs through the registered sponsors at the stock exchange who will qualify these firms for listing. These sponsors will also qualify the companies to prepare for listing their stocks in the NILEX as well as train their employees on listing and disclosure rules and how to abide by these rules.

    Established end of 2007, NILEX is the first stock market whose target is to support and develop SMEs in Middle East and North Africa (MENA) region, providing them with the required finance for growth and expansion so as to raise their competitiveness and offer more job opportunities.

    NILEX aims to create a market for promising companies in all countries of the region regardless of their industry or geographic boundaries. These companies include family businesses that wish to transform into joint-stock companies with a wide base of investors.

    EGX inaugurated its new premises at the Smart Village on April 12, 2012 in the presence of minister of Finance Mr. Mumtaz Al-Saeed, minister of Communications and Information Technology Dr. Mohamed Salem, Egyptian Financial Supervisory Authority (EFSA) Chairman Dr. Ashraf El Sharkawy and EGX Chairman Dr. Omran.

    The importance of the stock exchange lies in supporting the promising sectors of the economy that undergo funding obstacles. The stock exchange also helps attract local and foreign investments to support a fast-growing sector like ICT as well as aid self-employment business plans and contribute to creating more business opportunities.

    Listing in NILEX is based on flexible rules conforming to the nature of these companies. The process starts by selecting an accredited sponsor to help qualify the company to be listed in NILEX and put forward their stocks in the stock market to attain finance. After the company signs a contract with the accredited sponsor, the sponsor starts to help prepare all the documents required for listing. Moreover, he will train the company's on following the listing and disclosure rules at NILEX. Afterwards, the company, in cooperation with the sponsor, will present a listing request to the companies' sector listed in the stock exchange. The sector will inspect and study the request thoroughly before announcing a preliminary approval. Then the sector presents the request before the listing committee to get the final approval for listing the company in the stock exchange. After a company is approved by the committee, it can put forward its stocks for investors in a bid to obtain the required finance in cooperation with the accredited sponsor.

    The conference held at the NILEX premises in the Smart Village aims to highlight the main means of support that can be offered by ITIDA to the companies wishing to be listed in NILEX.

    The advantages of being listed in the stock market were presented during the conference. The benefits include the acquisition of the finance a company needs, facilitating the opportunity of getting long-term loans from the stock market, determining fair values for the companies and maximizing the market value of capitals of the listed companies, which reinforces the status of a firm in case it applies for a bank loan.

    Companies listed in the stock market have a good reputation among banks, suppliers and clients. Their chances of merger with their peers will become easier, creating more competitive entities on both local and regional levels.

    The rights of all the shareholders of the listed families will be protected, while facilitating their exit from such companies, especially family businesses.  

    Dr. Omran confirmed that EGX will be committee to acquainting the ICT companies registered in ITIDA's database with the benefits of being listed in the stock market as a source of funding.

    Dr. Omran added that the sponsors accredited by the stock market will work on providing efficient consultancy services to help these projects raise their productive and managerial efficiency in a way that helps them continue to grow in the market.     

    On his part, Mr. El-Kady stated that SMEs represent the backbone of the Egyptian economy and in turn they should be financed and supported to merge with each other and in turn create bigger entities that reinforce the industry and attract foreign and Arab investors.

    Mr. El-Kady added that the cooperation between ITIDA and EGX urges these companies to double their capitals and penetrate new markets in a way that benefits both the companies and the economy as a whole.

    SMEs play a vital economic, role in Egypt, contributing about 75% to the economic development and 80% of employment. Despite their utmost importance, these companies face financing problems when they wish to expand and reach out new markets. Twenty SMEs from different sectors and industries are currently listed in NILEX.






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