Riyadh – Mubasher: The capital of Saudi Arabia, Riyadh, witnessed this week the launch of a discussion panel focusing on investment opportunities in the Egyptian capital market, under the sponsorship of the Saudi-Egyptian Business Council.
Global Trading Network (GTN)-Middle East organised the event which took place on 14 February, with the participation of a high-ranking delegation of the Egyptian capital market and stock exchange.
Chairman of Mubasher Financial Group, Mohamed Al Ballaa, noted that financial markets in general play a key role in activating economic growth through the development of savings, providing liquidity, and endorsing capital formation.
Al Ballaa added that the securities markets affect investment opportunities in Egypt, given it is the main method to invest in stocks and bonds.
The top official elaborated: “The market has its impact on attracting local and indirect foreign investments, besides supporting economic activity as well as stimulating capital recycling and business. Therefore, it boosts economic growth.”
Al Ballaa highlighted the strong bond between the financial market and economic performance; the more the state’s financial system develops and becomes more connected to a prosperous financial market, the more economic activity develops. He added that the financial market could lead to higher economic growth rates, in addition to an increase in savings and investment.
“Financial markets are important to developing investments, including the optimum direction of financial resources to the most efficient sectors in the economy. This is besides the endogenous growth theories in the 1980s and 1990s such as savings mobilization, information analysis, risk sharing, and providing liquidity,” Al Ballaa noted.
The Chairman also said that the relation between capital markets and the economic theory evolves from the participation of financial markets and their support to Adam Smith, the pioneer of political economy who created the classical economics. Smith focused on economic freedom and the liberalisation of capital markets, as well as the idea of segmentation and the division of work.
On the other hand, savings and activating its process in the form of cornerstone investment would play a key role in economic growth, capital accumulation, and foreign investment flows, according to Al Ballaa.
He concluded, looking back to Egypt and its capital market, we would find that Alexandria Futures Market was officially launched in 1883, followed by the foundation of Cairo stock market in 1903.