Despite concerns about preliminary results from the parliamentary elections, four leading businessmen assembled for a panel discussion at Amcham's November 27 luncheon at the Grand Hyatt hotel remained uniformly upbeat about the promise of the Egyptian securities market. The speakers-Aladdin Saba, Maged Shawky, Mohamed Taymour and Naguib Sawiris-agreed that the market is healthy and has room to grow.

Mohamed Taymour, chairman of Egypt's largest securities broker, EFG-Hermes Holdings, credited economic reforms instituted over the past three years for increasing the daily trading volume at the Cairo and Alexandria Stock Exchanges (CASE) from LE 20 million in 2002 to an average of between LE 600-800 million in 2005, an increase of roughly 2,000 percent. Taymour noted that the daily trading volume hit the LE 1 billion benchmark in November, an event that "most people would have thought impossible a year ago."

Taymour cited the privatization of Egypt's national banks as evidence that "we are seeing, for the first time, the true dismantling of the socialist dogma and central planning policies that directed the way that we have done things for the past 45 years."

And while he admitted that "many risks and uncertainties still lay ahead," a reference to results from the first two rounds of voting in the parliamentary elections that saw the Muslim Brotherhood post significant gains, he affirmed that "no matter what kind of institutions we will have in the new parliament, I don't think we will see policies that prevent Egypt from fulfilling its full potential. That's why I am very optimistic about the stock market. I think it will continue to do well. I don't think it's overvalued."

CASE chairman Maged Shawky further credited the recent decrease in oil prices and an injection of cash from retail banks for boosting the trading volume at the stock exchange. "The stock market is up by 200 percent since 2004," Shawky said. "I am very happy with this result, but I would be even happier if I saw a further increase in liquidity." Shawky also noted that CASE is updating its infrastructure to allow for online trading and other improvements that he expects will facilitate even greater volume on the stock exchange.

Naguib Sawiris, chairman of Orascom Telecom, praised the government's efforts to improve the national economy. "I think the private sector would agree that we have a great government, especially the economic team… We are proud of the calibre of the men who are guiding Egyptian economic policy right now," Sawiris said, adding that he believes Egypt's stock market is still undervalued, especially when seen in comparison to the markets of other Arab countries.

Sawiris also expressed concern over the Muslim Brotherhood's strong showing in preliminary results from the parliamentary elections. "I don't think that any of us approve of mixing religion and politics," he said. And while he said he did not think the greater Brotherhood contingent in parliament would hurt the economy since the Muslim Brotherhood remains a minority, he called on attendees to form a secular party to champion capitalism, liberalism, and open economic policies. "It's time for you guys to go out and start something new, to take action, because otherwise we won't get out of this next time," he urged.

Aladdin Saba, chairman of asset management and investment banking firm Beltone Financial Services, focused on the Egyptian market's performance relative to other developing markets in the Middle East and Eastern Europe. While Middle Eastern markets performed better than their Eastern European counterparts, Saba cautioned that other Arab markets "are progressing at a faster rate than ours is. So unless we pick up the pace again, we're going to be left behind."

Saba cautioned analysts against seeing influences on the market through rose-colored glasses. "When a correction started a few days ago," he said, "everybody was saying that this was investors taking money out to raise cash to go into the upcoming telecom offer. Well, have they forgotten about the elections?"

Saba said he expected steady but solid growth over the next year: "When you look at the market today, yes, it could go up. But it will go up somewhere around 6-10 percent above the rate of inflation to give you a return of around 15 percent - not a return that's 50 percent or 100 percent."