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Egypt to Postpone the Capital Gain Tax

With the framework of the government efforts to support the investment environment in Egypt, the Egyptian government announced on 18 May 2015 postponing the execution of the Capital Gain Tax decision. The decision aims to maintain the competitiveness of the Egyptian Exchange taking into consideration its repercussions on the Egyptian economy and on its ability to attract more investments.

This decision comes within The Prime Minister & the Minister of Investment visit to the Egyptian Exchange for the Opening of the trading session.

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Commencement of Trading on the First Exchange Traded Fund (ETF) in the Egyptian Exchange

The Egyptian Exchange commenced its first ETF trading on Wednesday, January 14, 2015. The newly traded ETF tracks the main index, EGX 30 index, where its certificates are allowed to be traded as other securities, through brokerage firms. The ETF nominal value on the first day of trading was LE 10 per certificate and it complied with all the applied trading mechanisms and rules except the trading suspension mechanism.

Dr. Mohammed Omran, EGX chairman stated that the commencement of trading on the first ETF in the Egyptian market is a new development and represents an increase in the market depth through providing new financial instrument other than stocks, bonds and mutual funds. He also stressed that this tool was an urgent demand by local and foreign investors and is expected to attract new investors as it represents a good hedging tool for all dealers that enables the investors to diversify the risks by investing in a basket of 30 stocks at once and at a lower trading cost.

Dr. Omran also explained "We had a clear commitment to EGX strategy (2013-2017) to launch ETFs during 2014, and we are glad that we were able to achieve this as it significantly reflects that institutional management has become the main culture at EGX."

Moreover, EGX Chairman stated "I see that the Egyptian market is progressing and moving confidently with a clear strategy to achieve further development and efficiency in accordance with the set objectives". In addition, Dr. Omran also stated that the ETF launching also witnessed the commencement of a new mechanism, the market maker, which would contribute greatly to increasing market liquidity levels. For more information regarding the newly listed ETF, kindly refer to EGX website.

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The Egyptian Exchange (EGX) Participates in the Ninth Joint Conference of the Council of Egyptian-Japanese Businessmen

The Egyptian Exchange (EGX) participated in the ninth Joint conference of the Egyptian-Japanese businessmen. In EGX presentation, Dr. Omran emphasized that the courageous economic reforms applied recently and in the forefront subsidy system and tax reforms have greatly contributed in the restoration of the economic stability. He stressed that the economy has begun to clearly respond, which is reflected on the high economic growth rates to reach 4% during the current fiscal year which is expected to cross this frontier during the following year. In the mean time, the budget deficit decreased as well the inflation rates, which has raised Egypt's credit rating for the first time since 2011, a sign cannot be unnoticed.

Omran highlighted that EGX outstanding performance during 2014 clearly reflects the future of the Egyptian economy. The significant capital increases which has been executed through market indicates the positive outlook for investors and companies of a better economic position during the coming period. He stressed that foreign investors have registered net purchases for the first time since 2010, soaring to an average trading value of more than LE 40 billion.

He also noted that Japan is very active in the field of development in Egypt; however, the Japanese investments are still less than the anticipated as it does not exceed 1% of the foreign investments in Egypt which represents not more than 0.07% of Japanese investment abroad. Omran invited the Japanese investors to look to the future and exploit the opportunities available in the Egyptian economy, especially in the infrastructure and the giant projects that amounts to USD 70-100 billion. He stressing that the studies classify Egypt as one of the top countries in the world in terms of return on infrastructure investment. He finally claimed to benefit from the leading Japanese experience in the field of small and medium enterprises development.

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