Stock Market Annual Report

2007
www.egyptse.com

1. The Egyptian Stock Market

Despite the amount of shocks that have faced both, emerging and developed stock markets around the
globe during 2007, the Egyptian Stock Market has not only shown resilient ability, as a shock-
absorber, in maintaining its solid performance, but has also broken new thresholds recording a
skyrocketing year-over-year growth rate of more than 50% outperforming other emerging markets.

Strong Economic Performance

This accomplishment was backed by several factors, on top of which came the distinguished
momentum of the Egyptian economy, for the second consecutive year, reaching its 25-years highest
growth rate of 7.1% during fiscal year 2006/2007 with IMF expectations of reaching 8% during the
years to come, especially with the government taking significant steps towards improving the
investment climate in Egypt as well as removing all obstacles facing local or international investors.
Consequently, FDI recorded L.E 7.1 billion during the first 9 months of 2007 with expectations to
conclude the current year at L.E11 billion pushing international organizations to acknowledge these
achievements, whereby the World Bank have chosen Egypt to be the best country in terms of
improving its investment and business climate during 2006 as well as the UNCTAD ranking Egypt as
one of the most investment-attractive countries along the African continent.

Moreover, most of the economic indicators manifested tangible progress, whereby the balance of
payments realized a surplus of $5 billion and the foreign reserves registered an annual increase of
almost 27% jumping to $31.5 billion at the end of November 2007, which in turn secured the
exchange rate against the dollar at around L.E 5.5 compared to L.E 5.7 last year.

CASE Continuous Institutional Development

1. Reducing the settlement period and removing price limits of 151 companies

Within the framework of conforming to international standards, the settlement period of all listed
securities has been reduced to T+2 instead of T+3; a step that has further enhanced market activity
and liquidity. Meanwhile, it was decided to remove the price limits on the most active companies
in the market, that amounted to 151 companies by the end of 2007, reflecting the confidence in the
efficiency of the Egyptian market to be among the first exchanges in the region to adopt such
practice believing in free markets and their positive impact on reducing price manipulations.

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2. Attracting family-owned companies to list on CASE

Towards broadening its offerings base, CASE has saved no efforts in attracting family-owned
companies to list on board, whereby 2007 has witnessed IPOs and private placements for both, JB
Auto and Talaat Mostafa Group Holding (TMG Holding) with a combined value of almost L.E 5
billion. Both IPOs were drastically oversubscribed especially TMG Holding that was covered 42
folds registering the highest records in the Egyptian Stock Market and reflecting the appetite for
new investments and products.

3. Continuous implementation of listing and disclosure rules as well as delisting non

complaint companies

CASE has continued its rigid implementation of its listing rules together with activating corporate
governance practices to insure the quality of listed companies and delist the ineligible companies
that dont conform to the rules, which led to a decrease in the listed companies from 595
companies at the end of 2006 to 435 companies. However, market capitalization has surged by
44% compared to last year recording L.E 768 billion forming 105% of the GDP opposed to 73%
at end of 2006. Meanwhile, the number of traded companies rose from 68% last year to 77%
during 2007.

4. Launching the first sector indices

Being concerned of information accessibility, CASE has launched the first sector indices in the
Egyptian market, which help investors make better-informed investment decisions. The indices
track the performance of the sectors according to the re-classification, undertaken by CASE, of all
listed companies into 17 new sectors, based on the companies' economic activities and main
business revenues, instead of the previous 22 sectors.

5. Launching the first SMEs market (NILEX) in the region

In October 2007, CASE has launched the first SMEs Exchange in the Region. The new market for
medium and small enterprises (NILEX) aims at supporting and developing those companies on
both, local and regional front, by providing a clear access to capital giving them a fair chance of
growth away from the prevailing financing obstacles.
In that respect, CASE has started an aggressive marketing campaign to attract potential SMEs to
list on NILEX with expectations that 2008 is to witness the first listings.

6. Launching the first Postal Saving Account based on the Egyptian Stock Market
investments

In the direction of widening the exchanges client base with a special focus on small investors
with limited investment experiences, CASE together with the Egyptian National Postal
Organization (ENPO) has launched the first postal saving account based on investment in the
stock market to be run by expert fund managers limiting clients' risk. The new service is expected
to attract 1.5 million new accounts, where each could be opened starting LE 100 with no ceiling
value, enabling unreachable segments to invest in the stock market.

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Forty three offices are currently offering this new investment mechanism with expectations to
reach 1,000 offices by the end of first quarter 2008 and for the fund capital to reach L.E 4 billion
by the end of that year.

7. CASE serving as ASEA President for the second consecutive term

On the international relations front, CASE was keen to re-iterate its position regionally, whereby it
was re-elected, for a second consecutive term, as the President of the African Securities Exchanges
Association (ASEA).

8. CASE hosting the first round table meeting of the Chief Executives of Stock Exchanges
in the COMESA region

In line with the regional role played by the exchange, CASE had hosted the first round table
meeting of the Chief Executives of Stock Exchanges in the COMESA region to discuss the
different scenarios and possibilities of regional integration of stock exchanges of the member
countries.

9. Signing MOUs with Shanghai Stock Exchange and Korea Stock Exchange

As another milestone on the international frontier towards the collaboration with the Asian
Exchanges, CASE has signed two MOUs with both; Shanghai Stock Exchange and Korea Stock
Exchange.

10. Education and Public Awareness

CASE has also continued its sturdy steps towards enhancing public awareness and education about
investing in the stock exchange through organizing awareness programs and campaigns. During
2007, CASE has organized Borsa step x step along the governorates in a number of
universities, namely; Mansoura University, Alexandria University, Arab Academy for Science,
Technology and Maritime in Alexandria, Faculty of Commerce in Monufeya University and the
Conference Center in Bani Swaif.
The program was also conducted in Cairo in Cairo University, Helwan University, Ein Shams
University as well as the German University and the American University.

11. Introducing new products in the market

In consistence with CASE aim to introduce new tools and products to attract more local and
international investors, CASE was the first on the regional front to introduce the concept of
Market Maker in addition to introducing the rules of Exchange Traded Funds (ETFs) to the
market. CASE is contemplating the issuance of the first ETF on its CASE30 index, which is
expected to be traded during the second quarter of 2008.
Furthermore, brokerage firms have started to activate the margin trading system, which is
expected to be intensively triggered throughout 2008. In addition, short selling is in the pipeline to
be operated also soon.

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12. Adopting an Electronic Coding System

Year 2007 has witnessed the finalization and activation of the electronic coding system that
contributed in saving the coding process duration from 24 hours to only one hour. All brokerage
companies and custodies were trained to use the new system. On the other hand, only the new ID
(National Number) is accepted in the coding system effective the beginning of 2007.

13. Implementation of Next Generation Trading System

From the perspective of technological developments, CASE, jointly with OMX Group, is currently
testing the functionality of the new trading system Next Generation Trading system enabling the
exchange to multiply its trading capacity to absorb the robust increases in trading volumes as well
as providing an updated trading platform that deals in cash and derivative markets.

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 2. Market Indices
a. CASE 30 Index Performance

The Egyptian market witnessed a remarkable performance in 2007 and was able to endure several
challenges during the year, including the international markets' plunge in February, together with the US
Subprime mortgage crisis in August, to conclude the year in a positive territory, with gains exceeding 50
percent.

First Half 2007

The market took off at the beginning of the year, buoyed by the governments decision to reduce import
duties on 1,114 items, together with the CBE decision to maintain the overnight deposit & lending rates
at 8.75 percent and 10.75 percent, respectively, pushing CASE 30 index up to approach the 7500 points
level. Meanwhile, the plunge in the international markets at the end of February, with the US market
recording its largest loss since September 11th, had a short term negative impact on the Egyptian market
and the market rebounded again on the back of the release of positive corporate earnings. This has
coincided with the political reform represented by the referendum of the constitutional change at the end
of March 2007, together with two major events that pushed the market to its highest levels over the last
18 months. These were: the reduction of the settlement period to (T+2) for all listed securities, followed
by the decision to remove the price limits on the 100 most active listed companies.

The market reacted positively to these decisions, driving the trading figures up tremendously during this
period and pushing CASE 30 index to reach one of its highest levels since inception, approaching the
8000 threshold, to conclude the first half of 2007 at 7803 points, with a growth of 12 percent over the
period.

Second Half 2007

The market continued its upbeat performance during the second half of 2007, supported by investors
optimism and confidence in the Egyptian market, following the CBE decision to maintain the overnight
deposit and lending rates unchanged, which coincided with the announcement of the governments
intention to offer 80 percent of Banque du Caire for sale to a strategic investor, 15 percent of the bank to
be offered through the Stock Exchange and the remaining 5 percent to the bank's employees.
Additionally, during the month of July, Egypt signed the OECD Investment Declaration, making it the
first Arab and African country to sign such declaration. As a result, CASE 30 index touched a new high,
surpassing the 8500 threshold for the first time, advancing by a further 5.6 percent over the month of
July.

Having been affected by the sharp decline in the international markets, following the US Subprime
mortgage crisis, the Egyptian market showed a lackluster performance, starting the second week of
August. The market, however, recouped its losses towards the last week of August, amid the US Federal
Reserves decision to reduce the interest rate to its lowest level in the last fifteen years. Additionally, a
number of international institutions have praised Egypt's economic reform, with Capital Intelligence
agency upgrading Egypt's credit rating, raising the long term foreign currency rating from BB+ to BBB-
and the short-term foreign currency rating from B to A3. Moreover, the World Bank recent report, has
chosen Egypt to be the world's most improved business reformer in 2007. The month of September has

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also witnessed the introduction of CASE new sectors' classification, together with the launch of twelve
sector indices.

By the end of October 2007, CASE launched its new market for medium and small enterprises (NILEX),
which is the first mid and small cap market in the MENA region. This was followed by CASE, together
with the Egyptian National Postal Organization (ENPO), launching a new postal savings account based
on investment in the stock market, offered through the wide spread post offices across Egypt. This step
came to bolster investment opportunities for a big segment of the Egyptian citizens, especially those
who have limited knowledge of investment in the stock market.

Towards the end of the year, the market witnessed Talaat Moustafa companys IPO and Private
Placement, which was heavily oversubscribed by 41 times for the former and 17 times for the later,
revealing the increasing demand for new offerings and products in the market.

Other equally important events that took place at the end of 2007, which have further supported the
market, were the US Federal Reserves decision to cut the interest rate to 4.25 percent, which coincided
with the CBE decision to maintain the overnight deposit & lending rates at 8.75 percent and 10.75
percent, respectively, in addition to the removal of the price limits on additional 50 stocks, to end the
year with 151 companies traded with no price limits, accounting for almost 85 percent of the total
market capitalization.

As a result, CASE 30 index skyrocketed and surpassed the 10,000 threshold, to conclude the year at
10,549.74 (highest-ever since inception), realizing 51 percent gains over the year.

CASE 30 Index Highest & Lowest Points in 2007 Vs 2006

2006 2007

Index Value (End of Period) 6973.41 10549.74

Highest Point (Over the Period) 8139.96 (1 Feb) 10549.74 (31 Dec)

Lowest Point (Over the Period) 4652.84 (27 Jun) 6545.14 (29 Jan)

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 CASE 30 Index Performance over the Period (January-December 2007)
10500
Issuance of the First Talaat Mustafa 23-Dec
UNCTA Chooses
Synthetic EGP Bonds in Group Debut
Egypt as the First
10000 Egypt is the First Arab and International markets Trading
in Africa to Attract
African Country to Sign the FDI 12-Dec
OECD Investment Declaration
9500 Capital Intelligence 28-Nov
Upgrades Egypt's
12-Nov
Credit Rating
9000
Removing the Price Limits on 25-Oct Fed cuts the
The Referendum on the100 Most Active Stocks 18-Oct Federal Funds
the Constitutional
8500 17-Sep Rate to 4.25%
Change 9-Jul 8-Aug
4-Sep 18-Sep
International 19-Jun 12-Jul Adding 50 Stocks to the
8000 Markets' Plunge
List of Companies
6-May CASE Lauched a New
Traded Without Price
G B Auto Debut Market for Medium & Limits
7500 Trading Small Enterprises
12-Jun
(NILEX)
6-Feb 27-Feb Fitch Rating Agency Mortgage Crisis in Launching a New Postal
7000 26-Mar Reducing the Settlement Raised Egypt's Foreign United States Savings Account Based on
Period for All Securities Currency Rating from Investment in the Stock
Government Reduces to T+2 instead of T+3 Stable to Positive CASE Introduces New Sectors' Market
6500 Tariffs on 1,114 Items Classification and 12 Sector Indices

6000
Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07

-7-
b. Dow Jones CASE Egypt Titans 20 Index Performance

Dow Jones CASE Egypt Titans 20 Index witnessed an upward trend during 2007, to conclude the year
at 2212 points (highest-ever since inception), surging by 44 percent over the year

Dow Jones CASE Egypt Titans 20 Index Performance in 2007

2300

2100 44%

1900

1700

1500

1300
Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07

-8-
 c. Sectors Indices Performance
In its continuous efforts to upgrade its services to market participants as well as to be on par with the
international standards, CASE has introduced a new sectors' classification in addition to launching
twelve sector indices for the first time in 2007. All sectors indices have seen a strong positive
performance year-to-date. The Industrial Goods, Services and Automobiles sector had the highest
performance, soaring 189 percent over the year, backed by the high trading activity on the Electrical
Cables company, which came in the seventh place in terms of volume traded.

Second in line came the Real Estate sector, surging 113 percent, on the back of the current boom in
the Real Estate sector in Egypt, which is expected to flourish in the coming period with the
acceleration of the mortgage finance. Worth mentioning that the market has witnessed the execution
of Talaat Moustafa IPO and Private Placement, which was heavily oversubscribed by 42 times for the
IPO, reflecting the increasing demand on real estate companies.

In the third place came the Travel & Leisure sector, with the sector's index rising up by 90 percent,
driven by the fast mover Egyptian for Tourism Resorts Co., which stood as number one stock in terms
of volume traded, with 1.4 billion shares exchanging hands during the year.

Led by Orascom Construction Industries, the Construction & Materials Sector ranked fourth,
recording an 86 percent increase in its index, affected by the upsurge in the Real Estate sector in
Egypt and the region. At the end of the year 2007, OCI announced the acquisition of OCI Cement
Group by the large multinational; Larfarge Group for US$ 11 billion; the largest ever deal in Egypt's
capital market.

The Banks sector came in the fifth place, which still enjoys a prominent performance, affected by the
restructuring program of the banking sector. The Egyptian government has announced, during 2007,
its intention to sell 80 percent of Banque Du Caire to a strategic investor, which is expected to further
enhance the sector's attractiveness. The sector's index recorded a 59 percent increase over the year.

In the sixth place, came the Financial Services excluding Banks sector, backed by the good
performance of the Egyptian Financial Group Hermes, with its price/share soaring 64 percent over the
year, coming in the fourth place in terms of volume traded.

The Healthcare and Pharmaceuticals sector ranked seventh, with its index rising up by 19 percent,
followed by the Telecommunications sector, which grew by 18 percent, on the back of Telecom
Egypt, which witnessed a brilliant growth of 48 percent in its price/ share and a heavy trading activity,
placing the stock as the fifth most active in terms of volume traded.

The Basic Resources sector came in the ninth place, recording a 17.5 percent increase in its index,
driven by El- Ezz Steel Rebars.

In the tenth place, came the Chemicals sector with 11 percent gains, while the last two places were
occupied by the Food & Beverage and Household & Personal Products sectors, coming in with
moderate gains of 9 percent and 8 percent, respectively. The Household & Personal Products sector
occupied the first place in terms of volume traded, recording around 2.4 billion shares.

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 Industrial Goods & Services & Real Estate Sector Index Performance
Automobiles Sector Index
Performance
Annual Change = 189 % Annual Change = 113 % 2190
2825
1781 1769
2134
1775

1177
1026
1027
977

May-07
Mar-07

Nov-07
Jan-07

Feb-07

Apr-07

Jun-07

Jul-07

Aug-07

Sep-07

Oct-07

Dec-07
Jan-07

Feb-07
Mar-07

May-07

Jun-07

Jul-07

Oct-07

Nov-07

Dec-07
Sep-07
Apr-07

Aug-07

Travel & Leisure Sector Index Construction & Materials Sector Index
Performance Performance

Annual Change = 90 % Annual Change = 86 % 1903

1917
1766 1609

1295
1270
1425
1044
1021
1009
Jan-07

Feb-07

Mar-07

May-07

Jun-07

Jul-07

Oct-07

Nov-07

Dec-07
Sep-07
Apr-07

Aug-07
May-07
Mar-07

Nov-07
Feb-07
Jan-07

Apr-07

Jun-07

Jul-07

Aug-07

Sep-07

Dec-07
Oct-07

Bank Sector Index Performance Financial Services excluding Banks

Sector Index Performance

Annual Change = 59 % Annual Change = 44 % 1450

1591

1429

1121
1083
1076
1039 1005
943
999
Jan-07

Feb-07
Mar-07

May-07

Jun-07

Jul-07

Oct-07

Nov-07

Dec-07
Sep-07
Apr-07

Aug-07
Jan-07

Feb-07
Mar-07

May-07

Jun-07

Jul-07

Oct-07

Nov-07

Dec-07
Sep-07
Apr-07

Aug-07

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 Healthcare & Pharm aceuticals Sector Index Telecom m unication Sector Index
Perform ance Perform ance

Annual Change = 19 % Annual Change = 18 %

1219
1204

1077
1035
1110 1001
998 1029
991
1011

Jan-07

Feb-07
Mar-07

May-07

Jun-07

Jul-07

Oct-07

Nov-07

Dec-07
Jan-07

Feb-07

Mar-07

May-07

Jun-07

Jul-07

Oct-07

Nov-07

Dec-07

Sep-07
Sep-07

Apr-07

Aug-07
Apr-07

Aug-07

Basic Resources Sector Index Chemicals Sector Index Performance

Performance

Annual Change = 17.5%

1209 Annual Change = 11% 1138

1023
1029 995 950 953
1023 924
1050
Jan-07

Feb-07
Mar-07

May-07

Jun-07

Jul-07

Oct-07

Nov-07

Dec-07
Sep-07
Apr-07

Aug-07

Jan-07

Feb-07
Mar-07

May-07

Jun-07

Jul-07

Oct-07

Nov-07

Dec-07
Sep-07
Apr-07

Aug-07

Food & Beverage Sector Index Personal & Household Products

Performance Sector Index Performance

Annual Change = 9 % 1088

1137
1101
Annual Change = 8 %
1027
1016
1010
1035

1010 1011
945
Jan-07

Feb-07
Mar-07

May-07

Jun-07

Jul-07

Oct-07

Nov-07

Dec-07
Sep-07
Apr-07

Aug-07
Jan-07

Feb-07

Mar-07

May-07

Jun-07

Jul-07

Oct-07

Nov-07

Dec-07
Sep-07
Apr-07

Aug-07

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Most Active Sectors in terms of Volume Traded

Trading
Trading Average Average DY
Volume
Sector Value P/E Ratio (%)
(million
(LE million) 31/12/2007 31/12/2007
shares)
Personal & Household Products 18,054.1 2,387.2 15.55 14.36
Travel & Leisure 28,440.7 1,618.8 18.75 16.88
Financial Services (excluding
41,657.9 1,462.3 19.28 6.61
Banks)
Real Estate 66,347.3 1,252.0 23.12 8.05
Industrial Services, Goods &
16,237.5 864.8 16.07 15.97
Automobiles

3. Egypt vs. Emerging Markets

According to MSCI Price Index for emerging markets, the majority of the emerging markets delivered
a good performance during 2007, led by markets in the Asian and Latin America regions, with the
exception of Srilanka, Venezuela and Argentina, which retreated by 15 percent, 6 percent and 5
percent, respectively.

Peru and Brazil came as the best performing markets in 2007, surging by 86 percent and 75 percent
respectively, followed by India and Turkey, which grew by 71 percent and 70 percent, respectively.
Egypt stood in the sixth place, realizing 55 percent gains over the year and ranked first among its
region.

As for S&P Global Index (S&P/IFCG) for emerging markets, Nigeria was the best performer, soaring
by 108 percent, followed by China and India, which grew by 106 percent and 80 percent, respectively.
Argentina and Taiwan were the slow movers, with moderate gains of 1 percent and 5 percent,
respectively. Meanwhile, Zimbabwe and Sirilanka were the only decliners, with their indices
retreating by 84 percent and 11 percent, respectively.

The Egyptian market, ranked eighth, yet managed to secure the fourth place among emerging markets
in Africa and Middle East, growing by 52 percent over the year, versus 9 percent in the previous year,
coming after Nigeria (108 percent), Oman (67 percent) and U.A.E. (52 percent).

As for the S&P/IFCI index, India came on top, surging by 79 percent. In the second place and with a
slight difference, came Brazil and Turkey, hiking up by 75 percent each. Egypt recorded a 52 percent
gain, versus an increase of a moderate 8 percent in the previous year, coming as the second best
performer among emerging markets in Africa and Middle East, following Oman (67 percent) and
preceding U.A.E. (48 percent), Morocco (45 percent), Kuwait (41 percent), Qatar (40 percent) and
Bahrain (31 percent).

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 %

-100
-80
-60
-40
-20
0
20
40
60
80
100
-40
-20
0
20
40
60
80
100

%
Nigeria

86
Peru

120 108
China

106
75
Brazil
India

80
71
India
Turkey

70
Turkey
Brazil

74 73
63
Oman China
Peru

67 65
55
Egypt
U.A.E

52
Chez Republic
Egypt

51
Indonesia

Source: Morgan Stanley website

Chez Republic
44
Morocco
Indonesia

52 52 50 50
42

Source: Standard and Poors website

Morocco Malaysia
41

Malaysia Thailand
Pakistan

45 44 42
38

Philippine
Kuwait
36

Israel

-13-
Thailand
33

Pakistan
Saudi Arabia

40 37 36
30

Qatar Korea
23

Bahrain Russia
Philippine
23

Poland
Israel
21

Jordan
Jordan

35 35 35 34 33
21

Chile
Korea
15

South Africa
Poland
13

Chile Hungary

27 23 23
13

Russia

22
Colombia
Percentage Change in MSCI Egypt vs. Other Em erging Markets in 2007

Percentage Change in S&P/IFCG Egypt vs. Other Emerging Markets in 2007

South Africa
9

Mexico
Hungary
5

Taiwan
Mexico
-5

Argentina
Colombia

16 14 13 13
-6

Venezuela

5
Taiwan

1
Argentina Sirilanka
-15

Siri Lanka

-11

-84
Zimbabwe
 Percentage Change in S&P/IFCI Egypt vs. Other Emerging Markets in 2007
%
90
79
80 75 75
67 67 66
70

60
52
50 49 48
50 45 45
41 40 39
40 36 34
31
28
30 23 23 22
20 16
13 13

10 5
1
0
Turkey

Oman

Malaysia

Mexico

Taiwan
Kuwait
India

China

Peru

Indonesia

Morocco

Thailand

Philippine

Bahrain

Korea

Poland

Chile

Russia

South Africa
U.A.E
Egypt

Chez Republic

Hungary
Brazil

Israel
Qatar

Argentina
Source: Standard and Poors website

4. Egypt vs. Arab Markets

Following a subdued market performance witnessed in 2006, Arab markets were able to regain their
momentum and delivered brilliant gains over the year 2007. The recovery was primarily supported by
new listings, a rising influx of foreign investments (in particular in Egypt and the UAE stock markets),
together with solid corporate earnings growth.

Exchanges in the Arab region were not hard hit by the general plunge in the global markets during
February 2007, as corrections in the markets did not last long and were followed by strong rallies. On
the other hand, the Arab markets benefited from the US Subprime mortgage crisis and credit turmoil in
August, as further funds were redirected towards emerging markets in general and the region in
particular.

Muscat came as the best performer, concluding the year with an increase of 62 percent, followed by
Abu Dhabi (52 percent). With a slight one percent difference, the Egyptian market booked the third
place, surging 51 percent over the year, followed by Dubai and Saudi Arabia, recording 44 percent and
41 percent gains, respectively, after the severe losses they incurred in 2006, ranging from 40 percent to
55 percent loss. Oman ranked sixth, recording a 36 percent increase, while Doha and Casablanca stood
in the seventh place, rising up each by 34 percent. Tunis came with the least increase of 21 percent.

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 Annual Percentage Change in Arab Markets' Indices in 2006 & 2007
%
80 71
62
60 52 51
44 41 40
36 34 34
40
25 24
14 10 21
20
1
0
-20 -12
-40 -33
-42 -35
-60 -44 -53
Muscat

Egypt

Kuwait
Arabia

Doha

Casablanca

Bahrain
Abu Dhabi

Dubai

Tunis
Amman
Saudi

2006 2007

Source: Reuters and Arab Exchanges websites

Egypt vs. GCC Markets Performance during 2007

180

Inte rnational Marke ts'

160 Mortgage Crisis in Unite d
Plunge
State s

140

120

100
Fe d Cuts the
Fe de ral Fund Rate
to 4.25%
80
Jan-07 Feb-07 M ar-07 Apr-07 M ay-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07

Saudi Arabia Abu Dhabi Qatar Bahrain Dubai Egypt Muscat

Source: Reuters and Arab Exchanges websites

The good performance of Arab markets has led their aggregate market capitalization to soar by 41
percent to reach US$ 1.3 trillion in 2007, up from US$ 888 billion in 2006. From another perspective,
the number of total listed companies declined to 1,536 companies at the end of 2007, versus 1,613
companies at the end of 2006, mainly affected by the reduction of the listed companies on CASE,
which accounted for 30 percent of the total number of listed companies in Arab markets.

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5. Egypt vs. International Markets
During 2007, the Egyptian market witnessed an increasing openness to other markets, mainly the
international markets, and as long as there is an increasing openness to other markets, then the
correlation among these markets increases as depicted in the Correlation Coefficient Matrix, which
measures the degree of correlation between the Egyptian market and other markets through the
correlation coefficient that shows the strength of correlation among the markets, the closer it is to one
the higher the correlation.

The correlation coefficient matrix shows that the correlation of Egyptian market with the international
markets is higher than with Arab markets compared to the previous years. The Egyptian market
recorded the highest correlation with London SE, with a coefficient of 0.49 compared to 0.35 in 2006,
followed by USA that has a coefficient of 0.47 versus 0.18 in 2006. Meanwhile, the Egyptian market
recorded a lower correlation with Tokyo SE of 0.28 down from 0.44 in 2006.

On the regional front, the correlation between the Egyptian market and the Arab markets fell
remarkably compared to previous years, where the highest coefficient was 0.15 with Saudi Arabia
versus a 0.27 during 2006, followed by Abu Dhabi and Dubai which recoded a coefficient of 0.14
each, compared to an average of 0.3 each last year. Finally came Jordan and Kuwait with a weak
correlation with the Egyptian market of 0.10 and 0.09, respectively, versus a correlation of 0.36 and
0.26, respectively, in 2006.

The weak correlation between the Egyptian market and the Arab markets can be attributed to the
change of the duration of CASE trading session, to be from 10:30 a.m. instead of 11:30 a.m., which
helped in alleviating the correlation of the Egyptian market with the Arab markets.

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 Correlation Coefficient Matrix for Arab & International Markets
in 2007

Saudi Abu
Egypt Kuwait Dubai Jordan London USA Tokyo
Arabia Dhabi
Egypt 1.00 0.15 0.09 0.14 0.14 0.10 0.49 0.47 0.28
Saudi
0.15 1.00 0.03 0.23 0.12 0.16 -0.21 -0.18 -0.18
Arabia
Kuwait 0.09 0.03 1.00 0.35 0.16 -0.15 0.17 0.21 0.12
Abu
0.14 0.23 0.35 1.00 0.77 0.10 -0.03 -0.03 0.13
Dhabi
Dubai 0.14 0.12 0.16 0.77 1.00 0.05 0.08 0.08 0.21

Jordan 0.10 0.16 -0.15 0.10 0.05 1.00 0.11 0.01 0.09

London 0.49 -0.21 0.17 -0.03 0.08 0.11 1.00 0.84 0.58

USA 0.47 -0.18 0.21 -0.03 0.08 0.01 0.84 1.00 0.64

Tokyo 0.28 -0.18 0.12 0.13 0.21 0.09 0.58 0.64 1.00

Source: Reuters

Correlation Coefficient Matrix for Arab & International Markets

in 2006

Saudi Abu
Egypt Kuwait Dubai Jordan London USA Tokyo
Arabia Dhabi
Egypt 1.00 0.27 0.26 0.32 0.29 0.36 0.35 0.18 0.44
Saudi
0.27 1.00 0.42 0.50 0.53 0.07 -0.11 -0.22 0.10
Arabia
Kuwait 0.26 0.42 1.00 0.57 0.50 0.06 0.05 -0.21 0.02

Dubai 0.32 0.50 0.57 1.00 0.87 0.12 -0.03 -0.18 0.07
Abu
0.29 0.53 0.50 0.87 1.00 0.07 -0.03 -0.23 -0.01
Dhabi
Jordan 0.36 0.07 0.06 0.12 0.07 1.00 0.17 0.29 0.17

London 0.35 -0.11 0.05 -0.03 -0.03 0.17 1.00 0.72 0.55

USA 0.18 -0.22 -0.21 -0.18 -0.23 0.29 0.72 1.00 0.39

Tokyo 0.44 0.10 0.02 0.07 -0.01 0.17 0.55 0.39 1.00

* Based on the main index of the market. Dow Jones index is used for United States, TOPIX for Tokyo
and FTSE 100 index for London.

-17-
6. Trading Aggregates
a. Total Market

The Egyptian market continued to record impressive trading records in 2007, buoyed by the decision
to remove the price limits on the 151 most active companies, the reduction in the settlement period to
T+2, together with the positive corporate results, which reflected well on the market activity and
liquidity and led to a hike in the value and volume traded during the year.

Total Market
The total value traded of the market surged to LE 363 billion, up from LE 287 billion in the previous
year, ending the year with a 26 percent increase. Likewise, the total volume traded soared to 15 billion
securities during 2007, rising up by 66 percent as opposed to the previous year. The number of
transactions also leapt by 32 percent, recording 9 million transactions versus 6.8 million in 2006.

On average, approximately 60 million shares valued at L.E 1.5 billion were traded on CASE on a daily
basis.

Listed Securities Trading

The increase in the total market value traded was mainly attributed to the 19 percent growth in the
listed companies value traded to reach LE 322 billion during 2007 versus LE 271 billion in 2006. The
volume traded of listed securities has also picked up by 46 percent to 11.4 billion securities compared
to 7.8 billion securities in 2006.

OTC Trading
From another perspective, the over the counter (OTC) market witnessed an increased trading activity
this year, yet still accounting for only 11 percent of total market value traded, up from 5.5 percent last
year. The value traded of the OTC market has grown almost three folds to reach LE 42 billion versus
LE 16 billion last year. The volume traded of the OTC market reached 3.7 billion securities, with an
increase of 185 percent compared to the previous year.

Listed Vs Traded Companies

The number of listed companies went down from 595 in 2006 to 435 in 2007, as a result of CASE
effective policy in enforcing listing, disclosure and corporate governance rules. Worth mentioning that
the percentage of the total number of traded companies to listed companies reached 77 percent in
2007, up from 68 percent in the previous year.

Market Capitalization
The market capitalization soared to LE 768 billion at the end of December 2007, recording a 44
percent increase over the year and representing 105 percent of GDP up from 73 percent in 2006.

-18-
 Main Market Indicators over the Period (2002 - 2007)
Indicators 2002 2003 2004 2005 2006 2007

1. Trading Aggregates
Total Volume (billion) 0.9 1.4 2.4 5.3 9.1 15.1
Volume of Listed Securities 0.7 1.2 1.8 4.2 7.8 11.4
Volume of Unlisted Securities 0.2 0.2 0.6 1.1 1.3 3.7

Total Value Traded (LE billion) 34.2 27.8 42.3 160.6 287.0 363.0
Value Traded (listed securities) 25.8 23.0 36.1 150.9 271.1 321.5
Value Traded (unlisted securities) 8.4 4.8 6.2 9.7 15.9 41.5

Total Number of Transactions (million) 0.8 1.2 1.8 4.2 6.8 9.0
Number of Transactions (Listed Securities) 0.7 1.2 1.7 4.0 6.6 8.7
Number of Transactions (Unlisted Securities) 0.1 0.02 0.1 0.2 0.2 0.3

Average Daily Value Traded (LE million) 137 114 170 645 1,176 1,488
Average Daily Value Traded (Listed Securities) 104 94 145 606 1,111 1,318
Average Daily Value Traded (Unlisted Securities) 34 20 25 39 65 170

Turnover Ratio (%)* 9.5 11.5 14.2 31.1 48.7 38.7

Foreign Participation as % of Total Value Traded 17.3 12.7 20.5 16.4 16.6 19.2

Arab Participation as % of Total Value Traded 1.8 7.8 7.0 13.9 13.6 12.5

Number of Trading Days 249 244 249 249 244 244

2. Listed Companies
Number of Listed Companies 1151 978 795 744 595 435
Average Company Size (LE million)** 106 176 294 613 897 1,766
Number of Traded Companies 671 540 503 441 407 337
Number of Traded Companies as a % of Number of
Listed Companies 58 55 63 59 68 77
Market Capitalization End of Year (LE billion)*** 122 172 234 456 534 768
Market Capitalization as % of GDP 29 35 43 74 73 105

3. Market Indices
% Change in CASE 30 Index 1 134 122 146 10 51
% Change in Dow Jones CASE Egypt Titans 20 Index -5 175 118 143 11 44
% Change in S&P/IFCI Price Index -6 79 126 159 10 52
% Change in S&P/IFCG Price Index -2 48 106 156 8 52
% Change in MSCI Price Index -5 81 118 155 15 55

-19-
Securities include stocks, bonds and mutual funds
* Turnover Ratio (%) = value traded of listed shares / market capitalization
** Average Company Size = market capitalization end of year / no. of listed companies
*** Market Capitalization = no. of listed shares x market price end of year

-20-
 Monthly Trading Value & Volume during the Period (Jan-Dec 2007)

60,000 3,600
50,000 3,000

Million Shares
LE million

40,000 2,400
30,000 1,800
20,000 1,200
10,000 600
0 0
Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07

Value Traded Volume Traded

- A deal on Eamar Egypt in the OTC market, with a total volume of 23 million shares worth LE 809 million, was executed on 29 March 2007.
-A deal on Banque du Caire in the OTC market, with a total volume of 400 million shares worth LE 1.6 billion, was executed on 24/05/2007.
- A deal was executed on Fertilizers Egypt Co. in 3 June 2007, with a total volume 320 million shares worth LE 8 billion, together with the restructure of Banque du Caire portfolio after being acquired by
Banque Misr, which amounted to 70.5 million shares worth LE 2.2 billion on 28/06/2007.
- A deal on El Arabia for Projects & Construction Development Co., with a total volume of 539 thousand shares worth LE 512 million, was executed on 8/7/2007.
- Four prominent deals were executed in September; namely, a deal on Misr Glass Manufacturing Co., with a total volume of 9.3 million shares worth LE 1 billion, together with a swap deal on Alexandria
Real Estate Co., with a total volume of 7.3 million shares worth LE 2.9 billion, in addition to a deal on Alkan Pharma with a total volume of 2 million shares worth LE 336 million and a deal on Dina Farms
for Investments, with a total volume of 3.2 million shares worth LE 476.9 million.
- A swap deal on El Arabia for Projects & Construction Development Co., with a total volume of 7.4 million shares worth LE 14.4 billion, was executed on 04/10/2007. Additionally, a deal on San Stefano
Real Estate, with a total volume of 4 million shares worth LE 785.4 million, was executed on 8/10/2007.
- The remarkable increase in the traded value & volume in November 2007 was attributed to the conclusion of several large deals, including a deal on El Watany Bank of Egypt executed on 1 November
2007, with a total volume of 70.3 million shares worth LE 5.4 billion, a deal on Talaat Moustafa Group Holding executed on 7 November 2007 in the OTC market, with a total volume of 858 million shares
worth LE 8.6 billion and a deal on Arab Hotels & Tourist Investment was executed on 15 November 2007 in the OTC market, with a total volume 2.6 million shares worth LE 1.4 billion, in addition to a
deal on Talaat Mustafa Holding (TMG) executed on 22 November 2007 in the OTC market, with a total volume 93 million shares worth LE 930 million. Additionally, the IPO & private placement of Talaat
Moustafa Group Holding were executed on 26 November 2007, with a total volume 180 million shares worth LE 2 billion, together with the execution of a deal on Talaat Moustafa Group on 27 November
2007, with a total volume of 153 million shares worth LE 1.8 billion and a deal on TMG for Real Estate & Touristic Investments was executed in the OTC market, with a total volume of 87 million shares
worth LE 867 million.
- A deal on Eastern Mediterranean Sea for Gas was executed on 11 December 2007 in the OTC market, with a total volume of 103 million shares worth LE 3 billion, together with a deal on El Watany Bank
of Egypt that was executed on 12 December 2007, with a total volume of 1.6 million shares worth LE 120.3 million. Additionally, there was a deal on Alexandria Fertilizers (Abou Kir) that was executed in
the OTC market on 27 December 2007, with a total volume of 95 million shares worth LE 521 million.

-21-
 Number of Listed & Traded Companies over the Period (2002-2007)

1,250 100%
Number of Companies

1,000 80%

750 60%
1,151
500 978 40%
671
795 744
595 435
250 540 503 441 20%
407 337

0 0%
2002 2003 2004 2005 2006 2007

No. of Listed Companies No. of Traded Companies % of Listed Companies

Trading Value & Volume over the Period (2002 - 2007)

400 16
Value Traded
Volume Traded
300 12

billion Securities
LE billion

200 8

100 4

0 0
2002 2003 2004 2005 2006 2007

-22-
 b. Trading Aggregates for Liquid Market
The Liquid Market made up 62 percent of the total value traded, 60 percent of the total volume
traded and 61 percent of the total number of transactions of stocks during 2007. Meanwhile,
the Liquid Market accounted for 64 percent of the total market capitalization at the end of
December 2007.

Trading Aggregates for the 55 Most Active Companies

(Liquid Market) during 2007
Trading Trading No. of
Value Volume Transactions Market Cap.
(Million (Thousand)
(L.E billion) Shares) (L.E billion)
55 Most Active Companies 185 6,767 5,339 494
Total Market (Stocks only) 298 11,354 8,711 768
% of Total Market 62% 60% 61% 64%

c. Trading Aggregates for Companies Traded with No Price Limits

By the end of 2007, CASE has removed the price limits on 151 companies. Those companies
captured 85 percent and 93 percent of the total value and volume traded (stocks only), respectively.
They also accounted for 98 percent of the total number of transactions. Furthermore, the market
capitalization of these companies represented 84 percent of the total market capitalization at the end
of year 2007.

Trading Aggregates for the Companies Traded with No Price Limits

(151 Company) during 2007
Volume
Value Traded No. of Market Cap.
traded (L.E (Million Transactions (L.E billion)
billion) shares) (Thousand)
Companies Traded with No 254 10,594 8,498 642
Price Limits
Total Market (Stocks Only) 298 11,354 8,711 768
% of Total Market %85 %93 %98 %84

-23-
d. Intra-day Trading System
Securities traded through the Intra-day Trading system recorded a trading volume of 496 million
shares, representing 4 percent of the total volume traded of listed stocks. Meanwhile, their value traded
amounted to LE 8.8 billion, executed over 285 thousand transactions, which accounted for 3 percent of
the total value and number of transactions of the listed stocks.
Trading Aggregates for Intra-day Trading System during 2007

Volume Traded Value traded No. of

(million shares) (L.E million ) Transactions
Total Trades Executed through Intra-
496 8,756 285,153
day Trading System
Total Market (Stocks Only) 11,354 297,567 8,711,289
% of Total Market 4% 3% 3%

e. Online Trading
Value traded (L.E million) Volume Traded (Thousand) No. of Transactions
Buy Sell Buy Sell Buy Sell

8,843 10,526 470,844 518,759 519,797 499,179

f. The Most 10 Active Companies in Volume

Opening
Value Volume Closing
Price
Traded Traded Price End %
Company Name (shares only) Beg. Jan.
(L.E (million of Dec. 07 change
07
million) shares) (L.E)
(L.E)
Egyptian for Tourism Resorts 19,497 1,415 125.91 8.07 - 93.59
Arab Cotton Ginning 6,140 658 10.83 8.74 -19.30
El Nasr Clothes & Textiles (Kabo) 1,738 617 3.61 1.97 - 45.43
Egyptian Financial Group-Hermes
25,882 566 40.30 65.97 63.70
Holding Company
Telecom Egypt 8,571 487 14.22 21.09 48.31
Talaat Moustafa Group Holding* 5,980 480 11.38 11.87 4.31
Egyptian Electrical Cables 3,790 452 16.98 1.58 -90.69
Arab Polvara Spinning & Weaving Co. 2,323 441 6.08 5.76 -5.26
Egyptian Kuwaiti Holding** 3,872 321 2.36 2.44 3.39
Fertilized Egypt** 8,044 320 501.00 4.41 -99.12
* The opening price is the price of its first trading day on 28 Nov. 2007
** Open & Close Prices are in US$

-24-
 7. Investors Activity
a. Development of Number of Investors
Due to the increasing attractiveness of the Egyptian market which resulted from the intensive efforts
to develop by CASE in order to foster the market depth, the investors' activity has accelerated
significantly in 2007, whereby the number of investors reached more than 1.6 million investor, with
an increase of 92 thousand investors compared to last year.

Despite the dominance of the Egyptian market by individual investors, year 2007 witnessed a heavy
activity of the institutional investors, foreigners in particular, as the number of institutions has surged
to 27 thousand, with an increase of about 1500 institution compared to the previous year.

In that respect, the Arab and Foreign institutions increased by 1000 institution during 2007, to reach
9400 institution, surging by 12% compared to the previous year, which witnessed an increase of only
450 institutions.

Meanwhile, the individual investors increased to reach 1.59 million, with an increase of 90 thousand
investor, representing a 6% increase compared to year 2006 during which there were 124 thousand
newly coded investor.

Moreover, the institutions' trading value has jumped in 2007 to LE 200 billion, representing a 19%
increase compared to the pervious year. The foreign institutions generated around LE 124 billion,
capturing around 62% of the institutions' trading value, compared to L.E 103 billion during 2006. The
individual investors, however, witnessed an increase in their trading value of only 5.5%, to reach L.E
330 billion.

From another perspective, more flows were injected in the Egyptian market during this year, whereby
the individual investors, with investment size exceeding LE 1 million, rose by 7% to 14 %; while the
investments injected by small investors whose trading value less than LE 1 million, retreated by 3% to
7%.

On the other hand, the good performance of the Egyptian market has urged the institutions to inject
more flows, whereby the number of institutions has surged remarkably, mainly those with investments
more than L.E 5 million, rose by 30% compared to last year.

Worth mentioning that this year has witnessed the implementation of the electronic coding system,
which led to a reduction in the coding duration from 24 hours to only one hour. The brokerage firms
were trained well to deal with this system.

Number of Coded Investors in CASE

-25-
 Number of New Coded Investors in Number of Coded Investors
2006 vs. 2007 till 2007
Retailers Institutions
Retailers Institutions Total
2006 2007 2006 2007
Egyptians 120,724 89,128 505 508 1,566,388 17,602 1,583,990
Arab 2696 917 178 182 17,090 1,591 18,681
Foreigners 670 373 540 804 5,216 7,754 12,970
Total 106,932 90,418 1,223 1,494 1,588,694 26,947 1,615,641

Number of Retailers and Institutional Investors According to the Trading Value

(2007 Vs. 2006)

Retailers Institutions
L.E % Change % Change
2007 over the 2007 over the
Year Year
1-10,000 69,652 -3 49 2
10,000-50,000 66,873 -4 151 21
50,000-100,000 19,137 -7 54 10
100,000-500,000 37,783 -6 161 14
500,000-1,000,000 12,785 0 107 -1
1,000,000-5,000,000 19,240 10 385 5
5,000,000-10,000,000 4,108 14 227 30
10,000,000-50,000,000 4,067 11 551 22
More than 50,000,000 974 7 587 33

b. Individuals Vs. Institutions

Liquidity in the Egyptian market is still dominated by retail investors, however, in 2007, institutional
investors witnessed an increasing activity, accounting for 39 percent of the total value traded, with the
balance captured by retail investors.

-26-
 Retailers vs. Institutions in Terms of Value Traded in 2007

Institutions
39%

Retailers
61%

c. Egyptians vs. Foreigners

year 2007 witnessed a rising penetration of new foreign institutions into the Egyptian market with a
large influx of investments, whereby total foreigners (Arab and foreigners) ended the year as net
buyers, recording a net inflow of L.E 8 billion, compared to LE 5.2 billion in 2006 (excluding the large
transactions of both years).

Non-Arab investors have shown strong buying activity, accounting for 19 percent of the total value
traded and have ended the year with net inflows of LE 15.7 billion.

Arab investors captured 12 percent of the total value traded and have realized a net outflow of LE 7.7
billion, with the remaining 69 percent owed to Egyptians

Egyptians vs. Foreigners in Terms of Value Traded in 2007

Foreigners
Arab 19%
12%

Egyptians
69%

-27-
Geographical Allocation of Foreign Investors
The year 2007 has witnessed a remarkable trading activity by the foreign institutions, during with their
investments rose to reach US$ 8 billion compared to US$ 3.4 billion during year 2006, jumping by
135% over the year.

The United States, United Kingdom, and Ireland dominated the foreign investments in the Egyptian
market in 2007, capturing about 55% and 34% of the total foreign investments, respectively.
Meanwhile, the rest of the European countries participated with 9% of the foreign investments and the
remaining 2% were owed to the rest of the world.

Moreover, the Investment Advisors possessed around 63% of foreign investments in the Egyptian
market, followed by the Banks Management Divisions, capturing around 17% of foreign investments
in the Egyptian market, while the Investment Funds came third, acquiring 15% of foreign investments
in the Egyptian market.

Geographical Distribution of Foreign Investments in CASE

Rest of the World 2%

Rest of Europe
9%

United Kingdom &

Ireland United States 55%
34%

Source: Bank of New York Report (International Investment in Egyptian Equities), December 2007

-28-
 Foreign Investments in the Egyptian Market (2006 -2007)

5
4.5

4
US$ billion

3 2.7

2 1.7
1.0
1 0.7
0.4 0.2 0.1
0
United States United Kingdom Rest of Europe Rest of the World

2007 2006

Source: Bank of New York Report (International Investment in Egyptian Equities), December 2007

Foreign Investments in CASE According to Investors' Type

Broker/Invt Bank Asset Others

Mgmt 2%
3%

Mutual Fund Managers

15%

Bank Mgmt. Divisions Invt. Advisers

17% 63%

Others include Insurance Companies, Pension Funds and Hedge Funds

Source: Bank of New York Report (International Investment in Egyptian Equities), December 2007

-29-
As for the foreign investments coming from the United States, Europe and the rest of world:

A. The United States investments in the Egyptian Market

The American investments in the Egyptian market have jumped by 160% over the year, reaching US$
4.45 billion in 2007 up from US$ 1.7 billion in 2006. The American investments have acquired more
than 55% of the total foreign investments in the Egyptian market, which were divided almost equally
between the GDRs and the direct investment in equities. Worth noting that the majority of these
investments were injected from the West and Mid-Atlantic, acquiring almost 42% and 34% of the
American investments, respectively.

B. The European investments in the Egyptian Market

The European investments, which accounted for 43% of the total foreign inflows to the Egyptian
market, have surged dramatically by 140%, recording US$ 3.4 billion as opposed to only US$ 1.4
billion in 2006. The British and Irish investments represented around 80% of the European
investments. Meanwhile, Germany was injected US$ 236 million, followed by Belgium and
Scandinavian countries, recording investment inflows of US$ 182 million and US$ 163 million,
respectively.

C. Investments of the Rest of the World in the Egyptian Market

The rest of the world investment in the Egyptian market witnessed a significant rise of 145% over the
year, reaching US$ 157 million in 2007, yet, it had a share of only 2% of the foreign investments in
the Egyptian market.

-30-
8. Capital Increase & IPOs
Year 2007 witnessed the listing of 20 companies only, compared to 22 new listed companies in year
2006, with a total value of L.E 21 billion, which is six fold the recorded figure of last year. On the
other hand, 180 companies were de-listed during 2007, with a value of L.E 12.7 billion, compared to
155 de-listed companies during 2006 with a value of L.E 7.5 billion.

Listing during 2006 and 2007

2006 2007
No. of Total Value No. of Total Value
Companies (L.E billion) Companies (L.E billion)
New Listing 22 3.7 20 21.4
(SPO) 23 3.9 37 6.0
Capital Increase
Others* 92 13.0 66 7.3
De- Listing 155 7.5 180 12.7

*refer to capital increase done through cash, bonus shares, adjusting par value, mergers and
acquisitions.

a. Initial Public Offerings (IPOs)

Year 2007 has witnessed two offerings, with a cumulative amount of LE 4.9 billion. The first one was
for G.B Auto, with an IPO and private placement worth LE 340 million, followed by the LE 4.5 billion
IPO and Private Placement of Talaat Moustafa Group Holding. Both offerings were highly
oversubscribed and have commanded healthy liquidity since their listing on the stock exchange

Issue Size Issue Size

Investment Offering Offering Oversubscription
Company Name (Million (LE
Manager Date Method (No of Times)
Shares) Million )
IPO 7.5 278 4
G.B AUTO Belton Jul-07 Private
1.7 62 7
placement
Talat Mostafa Group EFG-Hermes IPO 65.0 715 41.4
Holding (TMG Nov-07
Private
Holding) * HSBC 330.0 3828 17
placement

* A private placement of 215 million shares, out of the 330 million shares, was executed in the primary
market

-31-
 b. Capital Increase
During 2007, 37 companies increased their capital through a secondary public offering (SPO), with a
total value of L.E 6 billion, as opposed to 23 companies last year with a total value of L.E 3.9 billion.

On the other hand, 66 companies increased their capital through cash, issuing bonus shares, adjusting
the par value, mergers or acquisitions, with a total value of L.E 7.3 billion during 2007 compared to 92
companies in 2006 with a total value of L.E 13 billion.

De-listed Capital vs. Capital Raised through IPO & SPO

16000

12000
LE million

8000

4000

0
2002-2004 2005 2006 2007

De-listing Total (IPO & SPO) SPO IPO

9. Acquisition Deals during 2007

The number of acquisition deals amounted to 28 deals worth L.E 37 billion in 2007, compared to 42
acquisition deal in 2006, with a value of L.E 39 billion. The most prominent deals included the sale of
100 percent of Al Arabia for Projects and Construction Development to Talaat Moustafa Group
Holding, in a deal worth L.E 14.4 billion, the 100 percent acquisition of Fertilized Egypt Company by
Egyptian Company for Urine and Petrochemicals, with a value of L.E 8 billion. Other large deals
concluded during the year included the 93.8 percent acquisition of El Watany Bank by the National
Bank of Kuwait, in a deal worth L.E 5.4 billion as well as the 97 percent acquisition of Alexandria
Urban Projects by Talaat Moustafa Group Holding, with a value of L.E 2.9 billion.

Acquisition Deals During 2007

Value Investment Bank

No. Acquirer Acquired Date %
(LE Million) /Advisor
Hermes Securities
1 United Holding Company Egyptian Company For Gypsum Dec-07 50.0 100.9
Brokerage

-32-
 2 National Bank of Kuwait El Watany Bank of Egypt Dec-07 2.1 120.3 HC Securities
Prime Securities Stock
3 Gulf Insurance Company Arab Misr Insurance Group Dec-07 31.3 17.9
Brokers
4 AMIRAL HOLDINGS LTD Egyptian Container Handling Nov-07 49.96 153.8 Grand Investment Brokerage
5 Rasmala Investments Ltd Delta Securities Egypt Nov-07 51 84.7 Delta Securities Egypt
El Rasheedy Mezan Confectionary Hermes Securities
6 Royal Food Co. Nov-07 100 335
Factories Brokerage
7 National Bank of Kuwait El Watany Bank of Egypt Nov-07 93.8 5415.9 HC Securities
8 Rolaco Hotels Semiramis Hotels Oct-07 28.87 278.6 Trust Group for Securities
El Shark El Awsat Co. for
9 Talat Mostafa Group Holding Alexandria Urban Projects Oct-07 39.98 133.4
Securities Brokerage
Hermes Securities
10 Talat Mostafa Group Holding San Stefano Real Estate Oct-07 71.04 785.4
Brokerage
El Arabia for Projects & Hermes Securities
11 Talat Mostafa Group Holding Oct-07 99.9 14,413.2
Construction Development Co. Brokerage
Hermes Securities
12 Talat Mostafa Group Holding Alexandria Real Estate Sep-07 96.92 2900.05
Brokerage
13 Orascom Building Materials Holding Egyptian Cement Company Sep-07 53.64 187.54 Trust Group for Securities
14 Naeem Holding Naeem Financial Investments Sep-07 62.00 15.50 Naeem Securities
EL Shark El-Awsat Co. for
National Company for Investment &
15 DINA for Agriculture Investment Sep-07 100 476.90 Securities Brokerage/ Pharos
Agriculture and Others
Securities
16 MGM Holding for Financial Investments 64.96 661.42
Misr Glass Manufacturing Co. Sep-07 Pharos Securities
Mena Glass LTD 35.00 356.39
17 Hekma UK LTD & others Alkan Pharma Sep-07 100 341.52 HSBC Securities
18 Abu Dhabi Islamic Bank 49.00 151.96 Prime Securities Stock
National Development Bank Jul-07
Emirates International for Investments 2.30 7.12 Brokers
Egyptian American Company for Egyptian American
19 Athraa Capital Co. Jul-07 16 2
Brokerage Company for Brokerage
20 Carramar Development Inc El Arabia for Projects & 11.0 418.4 El Rowad Securities
Jul-07
Construction Development Co. Brokerage
Others 2.5 93.3
El Arabia for Projects & El Rowad Securities
21 Carramar Development Inc Jul-07 3.3 190
Construction Development Co. Brokerage
Egyptian Company for Urine and EFG-Hermes / Pharos
22 Fertilized Egypt Jun-07 100 1,411.20
Petrochemicals # Securities
Al Alameya Energy 99.99 77.85
23 Global Energy Jun- 07 Delta Misr Securities
Others 0.01 0.005
Trust Group for Securities/
24 Sperea Misr Plastics & Chemicals Plastichem Mar-07 99.93 270.9
CIBC
Trust Group for Securities/
25 El Alameya Financial Investments Sperea Misr Plastics & Chemicals Mar-07 99.96 116.1
CIBC
26 National Investment Bank El Nasr Mining Co. Feb-07 17.13 462.5 Metro Brokerage
27 Citadel Capital, Financial Holdings
Asek Company for Mining Feb-07 84.38 126.7 Delta Misr Securities
International &Others
28 C I Capital Holding Dynamic Securities Feb-07 99.91 281.9 CIBC Securities

# Value is in US Dollars

-33-
10. Bonds
The Bonds market witnessed an increasing trading activity during the year 2007, recording a trading
value of LE 24 billion, which is more than double the recorded figure of last year. Likewise, the
volume traded of bonds has doubled to reach 24 million bonds, versus 12 million bonds only the
previous year.

This increase in trading activity came on the back of the 100 percent growth in both volume and value
traded of the Treasury Bonds issued through the Primary Dealers system, which accounted for almost
95 percent and 90 percent of the total bonds value and volume traded, respectively. In that respect,
the Primary Dealers bonds reached 20 bonds in 2007 compared to 16 bonds last year.

Trading Aggregates for Bonds in 2007

Value Traded (L.E) Volume Traded

Government Bonds 23,820,756,982 22,495,739

Housing Bonds 341,021 4,426
Treasury Bonds 1,087,425,300 1,038,250
Development Bonds 285 0.05
Treasury Bonds (According to
22,732,990,376 21,453,063
Primary Dealers System)
Corporate Bonds 136,264,388 1,456,738
Total 23,957,021,371 23,952,477

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 Primary Dealers Bonds
in 2007
Trading Number Average Yield Average
Value of to Maturity Current Yield
(LE Million) Transactions (%) (%)
Government Bonds (Oct 2011) 3,750 152 9.30 10.68
Government Bonds (Nov 2014) 3,940 236 9.82 10.63
Government Bonds (Dec 2008) 1,503 59 8.56 10.61
Government Bonds (Jan 2025) 354 33 10.36 10.54
Government Bonds (July 2010) 1,530 66 8.93 9.08
Government Bonds (Aug 2009) 668 21 8.22 9.08
Government Bonds (Aug 2010) 375 38 8.81 9.22
Government Bonds (Sep 2012) 2,962 188 9.01 9.07
Government Bonds (Oct 2008) 439 13 8.30 8.98
Government Bonds (Oct 2010) 551 72 9.00 9.08
Government Bonds (Nov 2015) 454 21 8.99 9.14
Government Bonds (Jan 2010) 272 37 8.84 9.02
Government Bonds (Jan 2013) 3,529 162 8.85 8.86
Government Bonds (Feb 2008) 718 15 7.90 8.48
Government Bonds (Feb 2011) 451 18 8.84 8.67
Government Bonds (May 2010) 335 21 9.65 9.10
Government Bonds (May 2014) 539 6 9.00 9.25
Government Bonds (Sep 2014) 49 2 8.36 8.41
Government Bonds (Oct 2015) 86 9 8.35 8.48
Government Bonds (Nov 2013) 228 17 8.38 8.48

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11. Market Capitalization
The market capitalization soared to LE 768 billion at the end of December 2007, recording a 44
percent increase over the year and representing 105 percent of GDP up from 73 percent in 2006.

L.E billion 31/12/2007 31/12/2006 % change

Total Market Capitalization 768 534 43.8%

CASE 30 Market Capitalization 439 301 45.8%
CASE 30 Market Cap. as a % of Total Market
57% 56%
Capitalization
Total Market Capitalization as a % of GDP 105% 73%

GDP used is LE 731.2 billion according to the Ministry of Finance.

Market Capitalization as a % of GDP

LE billion
770 105% 110%
99%
660 95% 100%
550 88%
86% 90%
85%
81% 82%
440
75% 76% 80%
74%
330
69%
768 70%
220 696 725
504 538 548 556 596 602 631 619 646
110 60%

0 50%
Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07

Mkt Cap % of GDP

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 12. Member Firms in 2007
To enhance the market surveillance and ensure investors' protection from the risk related to brokerage
firms operating in the Egyptian market, CASE has undertaken effective steps in confronting the
brokerage firms' violation of membership rules and capital adequacy criteria. In that respect, CASE has
taken several actions towards these violations, which ranged from warnings till the company's
suspension.

On the other hand, the year 2007 has witnessed an increase in the number of member companies to
reach 141 companies, whereby 20 new member firms got the license this year. The number of traders
has also surged to 1436, with an increase of 181 traders compared to 2006.

Member Firms & Traders in CASE

during 2007

Change Over the Year

End of 2007 End of 2006
(# of Companies)
Total Number of Member
141 122 20*
Firms
Total Number of Traders 1436 1255 181

* One member firm's license has been cancelled in 2007

13. GDRs
Most of the GDRs witnessed a notable increase in their prices during 2007. Orascom Construction
Industries realized the highest gain of 118 percent over the year, followed by Commercial International
Bank, Egyptian Financial Group Hermes Holding and Telecom Egypt, surging by 70.4 percent, 62.3
percent and 49.4 percent, respectively, compared to the previous year.

Suez Cement and Ezz Steel GDRs' prices, on the other hand, have retreated by 4.2 percent and 20.5
percent, respectively, compared to last year. Meanwhile, Lakah Group GDR price remained unchanged.

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 Annual Percentage Change in Egyptian GDRs' Prices

Annual
# of GDRs to GDR Closing GDR Closing Change
Company Name Local Share Price on Price on in GDR
29/12/2006 31/12/2007 Price
(%)
Orascom Construction Industries 0.50 96.50 210.00 117.62%
Commercial International Bank
1.00 9.80 16.70 70.41%
(CIB)
Egyptian Financial Group Hermes
0.20 14.33 23.25 62.25%
Holding
Telecom Egypt 0.50 12.99 19.40 49.35%
Orascom Telecom* 0.20 66.00 83.00 25.76%
Pachin 3.00 2.50 2.80 12.00%
Lecico 1.00 10.25 10.38 1.27%
LAKAH group** 0.33 0.44 0.44 0.00%
Suez Cement 1.00 12.00 11.50 -4.17%
Ezz Steel 0.33 39.00 31.00 -20.51%
Exchange rate is LE 5.5/US$
* the Conversion ratio has changed to be 5 shares:1 GDR, effective 12 April 2007 following the stock split of 5:1.
** Closing price of 03/03/2005
Misr International Bank (MIBank) GDRs have been de-listed effective 23 January 2007

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14. Performance of CASE 30 Certificates
Open and close-ended certificates on CASE 30 index, issued by the three international financial
institutions; ABN-AMRO, Deutsche Bank and Goldman Sachs, and traded on European markets,
delivered robust performance in 2007, reflecting foreign investors confidence in the Egyptian market.

1- CASE 30 Certificates issued by ABN-Amro

A. Open End Certificates Performance:

The figure below shows the performance of the first issuance by ABN- AMRO of 500,000 open end
certificates on CASE 30 Index, that was listed and traded on SWX since the 27 October 2005, which
realized 52 percent gains during 2007, versus 11 percent gains during 2006.

US$

Source: ABN-Amro website

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 The second issuance of CASE 30 open end certificates by ABN-AMRO, which was listed and
traded on Frankfurt Stock Exchange on the 31October 2005, has realized an increase of 38
percent during 2007, as illustrated below, compared to only 1.12 percent during 2006.

Euro

Source: ABN-Amro website

The third issuance of 500,000 CASE 30 open end certificates by ABN-Amro, that were listed
and traded on Euronext Amsterdam, starting 9 March 2006, recorded an increase of 41 percent
during 2007.

Euro

Source: ABN-Amro website

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 B. Close End Certificates Performance:

The figure below manifests the performance of the 500,000 close-end certificates on CASE 30 index
that were issued on 15 June 2006, that are traded on Borsa Italiana. The close end certificates rose by
around 42 percent during 2007.

Euro

Source: ABN-Amro website

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 2. CASE30 Certificates issued by Deutsche Bank:

The open-end certificates that were issued by Deutsche Bank AG recorded 37 percent increase during
2007. The bank has issued 1 million open end certificates on CASE 30 Index, namely EUR X-Pert
Certificates that are listed and traded on Frankfurt and Stuttgart Stock Exchanges starting 13 March
2006.

Euro

Source: Deutche Bank Website

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 3. CASE30 Certificates issued by Goldman Sachs:

The figure below shows the performance of the open end certificates on CASE 30 Index that were
issued by Goldman Sachs International to be listed and traded on Frankfurt and Stuttgart Stock
Exchanges starting the 5th of May 2006. The certificates rose by 39 percent during 2007.

Source: Goldman Sachs Website

The second issuance of Goldman Sachs open end certificates, which was listed and traded on Swiss
Stock Exchange, on 10 May 2006, lost 5 percent by the end of 2007.

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