A conference introducing the general public to the workings of the stock market and encouraging investment was attended by Sherine Abdel-Razek. She witnessed a broad spectrum of public opinion A familiar scene from the old Egyptian movies of the 1940s is that of a character undergoing a seizure upon hearing that his fortune has been "lost on the stock exchange". This was the era when the Egyptian bourse was one of the world's five most active markets. Perhaps such scenes have contributed to a culture which fears investing in the market, viewing it as the surest way to ruin and losing one's health. Today, positive attitudes and basic knowledge of the stock market are still lacking in Egypt. Illiteracy stands at around 50 per cent, and even amongst the educated, there is a lack of even the most basic financial knowledge. This is probably due to the relative novelty of the stock market, which was re-activated in the early 1990s as part of the government's economic liberalisation policy. Today, courses on investment and finance are still absent from most Egyptian school and university curricula. Many Egyptians also perceive the stock exchange to be a form of investment afforded only by those rich enough, or clever enough, to invest in a domain which raises the risk of losing all of one's money. This week, the Cairo and Alexandria Stock Exchange (CASE), the Capital Market Authority, and a number of public and private companies and newspapers organised a four-day conference entitled, "The Stock Market Step by Step" (Al-Borsa Khatwa bi Khatwa). The aim is to boost the general public's awareness of, and correct its misconceptions about, capital market investing. Fifteen open lectures introduced the public to the basics of stock market investment and CASE distributed free educational booklets comprising definitions of words like "stocks" and "bonds", and more sophisticated terms like "corporate governance". Some 25 brokerage companies set up booths in the conference area in order to receive potential clients. The lectures elicited a positive response from those attending. A 22-year-old Faculty of Mass Communication graduate who attended said that one lecture, on how to plan for stock market investing was, "delivered in a simple way. It was the first time for me to hear anything about stock market investments. Now, I know a little more about it." Although the graduate doesn't have money to invest in the market at this point she thinks that it is still important to attend, to have the needed background to invest at a later date. According to one dealer, some of the public have such little knowledge about the stock market that they did not know that one has to go to a broker to buy shares." Mohamed Fouad, an investment executive at Counsel Brokerage, said that companies are now targeting young and small investors, because "institutional investors are pulling out of markets worldwide. So the individual small investor is our target." Fouad said that his company had still not finalised any deals or buying orders, but that the public was "very interested" in obtaining information. "The booths were crowded, and some potential investors preferred to come and ask us face to face about certain things, rather than attend the one- hour seminar," he said. The idea of increasing investment awareness started in 1997, CASE Chairman Sameh El-Turguman told Al-Ahram Weekly. Research was conducted to study the needs, trends and concerns, amongst investors and the community at large, with the aim of increasing their awareness," he said. El-Turguman, who became CASE's chairman in 1997, said that the first endeavour to instill investor awareness of the stock market was the "Stock Riders" programme, started in 2000. This is an educational tool using a booklet, a video and application via the Internet, targeting mainly schools and university students. A model stock market was designed and placed on- line, enabling the programme's participants to participate in the virtual transactions. "The number of schools and universities participating in the Stock Riders programme has risen, up from three to 10 schools and two to six universities," El- Turguman added. The "Step by Step" conference comes amid a downward trend by most of the active shares in the local market. This has, in turn, been brought about by the global financial downturn, in addition to regional tensions. Head of the Capital Market Authority Abdel-Hamid Ibrahim recently described the overall situation as "a crisis of investor confidence". Despite that, attendants and participants in the conference say that its timing could not have been better. "One of the things that we are trying to make clear here is that the market has cycles. If the market is down at this point, then now is the best time to promote our commodity, since (with stock prices low) they are now attractively priced," said El-Turguman. Niveen El-Tahri, CEO of a leading brokerage, ABN AMRO Delta Securities and one of the conference's sponsors concurs: "The spiral decline in share prices makes some of them a 'best buy' now. The yield on market investments is as high as 2-3 times that of bank deposits, because of the very low prices of shares," she added. "What we really need now, is something like this conference, which can teach people how to make use of such an opportunity." The conference was also a chance for some investors to get in touch with officials from the market authorities, and submit their enquiries or forward complaints. Mohamed Ashmawi, a retired accountant and small investor, said that he had come to the conference's lectures to "find out the reasons behind the steep decline in the market and check out if the rumours about phony practices in some recent transactions are true." The conference's lecture rooms also saw some heated discussions, raised by investors, who used the opportunity of being with officials from the market and media representatives, to complain about the losses they had shouldered because of such practices. Reports of malpractice by brokers have been another element that has negatively impacted the confidence of potential clients in the market. "After hearing that someone has lost a lot of money in the stock market because of some form of malpractice by brokerage companies, one feels hesitant about investing, without first having a lot of information on the market," said a recent graduate of the Faculty of Commerce. There were even stronger reactions from some who attended the lectures. "You are trying to convince us to invest in the market, even though so many people have lost their money there. There is no control [exercised on the market]" shouted one incensed, middle- aged man, after the lecturer had tried to calm down another angry investor who was talking of the losses he had incurred in the market. However, according to El-Tahri, problems related to malpractice are not easy to eradicate. This is a global phenomenon that is not just isolated to small brokers but also exists in big investment banks like Merrill Lynch. "Investors shouldn't panic. It is normal but can be hedged against by understanding the market better," she said. Additional reporting by Maha Saleh
