Dr. Mohamed Farid Saleh:
- Launching the derivatives market has been a project we have pursued since 2004.
- It is a key measure to enhance the investment environment and allow investors to hedge against price volatility.
- The journey to establish the derivatives market was challenging.
- I extend my thanks to colleagues at FRA and the EGX.
Dr. Mohamed Farid Saleh, Minister of Investment and Foreign Trade (MIFT Minister), announced that the launch of the derivatives market at the Egyptian Exchange (EGX) today, Sunday, represents a strategic step to enhance the competitiveness of Egypt’s capital market by diversifying available financial tools and products for investors.
He explained that the launch of the derivatives market involved extensive effort over many years, with work on the project beginning as far back as 2004. He emphasized that the derivatives market is a vital measure to strengthen the investment climate and provide investors with tools to hedge against price volatility.
Derivatives are financial instruments whose value is derived from an underlying asset, such as stocks, price indices, or other assets defined by the Financial Regulatory Authority (FRA). They can take the form of futures contracts, options contracts, swap contracts, or other standardized contracts.
Dr. Mohamed Farid Saleh, who served as FRA Chairman prior to assuming the Ministry of Investment and Foreign Trade in mid-February, noted:
“Today we witness this project come to fruition following FRA’s issuance of the license to the EGX to trade derivatives in mid-January.”
MIFT Minister highlighted that futures contracts are particularly useful for hedging against unusual price volatility, contributing to greater market depth and efficiency.
He acknowledged that establishing the derivatives market was a complex journey requiring significant effort. He extends his thanks to all colleagues at FRA, the EGX, and Taswyaat Clearing Services Company who contributed to this achievement.
Dr. Farid Saleh noted that the development of the derivatives market will pave the way for new financial products aimed at protecting investors from price volatility, including hedge funds, which are expected to be activated under the regulatory and legislative frameworks established during his tenure at FRA, as well as the short-selling mechanism, which is anticipated to launch in March.
