EGID: The Backbone of the Egyptian Exchange
Updated 6/20/2023 8:00:00 AM
Arab Finance: Egypt for Information Dissemination (EGID) has been a major player in the Egyptian financial market for over 20 years. As the sole distributor of Egyptian Exchange (EGX) market data, EGID has significantly contributed to the market's growth and development.
In an exclusive interview with Arab Finance, Yasser Al-Alaily, CEO of EGID, discusses EGID's history, its contribution to the financial market, how it maintains its position as a market leader, and its plans for future growth.
1-Can you share with us the history of founding EGID and the integration processes the company has gone through?
For more than 20 years, Egypt for Information Dissemination (EGID) has been the sole aggregator and authorized distributor of the Egyptian Exchange's listed companies’ information and trading data. It has been able to serve world-class customers both locally and internationally.
EGID is now fully owned by the EGX. However, until the beginning of 2023, it was a joint venture between EGX and Nasdaq, where Nasdaq’s share was 45% and EGX’s share was 55%. This period benefited EGID, as Nasdaq passed on experience in the trading systems architecture and technicalities to EGID staff.
2-As a subsidiary of the EGX, how does EGID contribute to the overall success of the Egyptian financial market?
EGID contributes to the financial Egyptian market in many aspects, some of which are:
- EGID is the sole distributor of EGX market data. We disseminate real-time and delayed data to data vendors and brokerage companies inside and outside Egypt.
- EGID has developed several software solutions to serve the financial sector, for example, the Blue RITS brokerage system, the commodities trading system that is currently used by EMX, and E-Magles, which is an electronic voting system that is mainly used by the listed companies to serve their vast number of shareholders.
- The existence of EGID in the brokerage market specifically raised the competition level for all software providers in the market, leading to a much higher quality of service and lower prices that benefited brokers and the financial market in general.
- EGID also provides several consultancies that aid companies working in the financial markets; for example, EGID conducted a software audit to help the Arab African bank evaluate one of the companies that it intended to invest in.
3-What are the core services and products that EGID provides?
EGID provides several services and products as software solutions. In addition to what is mentioned previously, EGID provides several other solutions, such as an information retrieval (IR) system for listed companies, website development, and a custodian back-office system. EGID Data Center provides hosting and colocation services, which are licensed by the Federal Railroad Administration. Moreover, EGID hosts several important clients from the banking sector, such as I-Score and the Industrial Development Bank, the first bank in Egypt to have its production site at the EGID Data Center.
4-How does EGID differentiate itself from other data providers in the market, and what is its unique value proposition?
EGID is the sole distributor of Egyptian market data. We distribute the data on behalf of the Egyptian Exchange. Other data vendors are our clients, and they take the data from EGID; therefore, there is no real comparison that can take place in this arena. On the other hand, EGID has enriched the market by providing online trading platforms (web and mobile) for its brokers, who in turn give them to their clients interested in trading online. These platforms contain real-time data and are fully integrated with the back-office system to enable trading tickets to take place.
5-How does EGID ensure the highest levels of security for its Tier 3 data center and hosting solutions?
EGID has taken several measures in terms of securing its environment. In terms of security, we have high-end firewalls, web application firewall (WAF) systems, and implemented secure sockets layer (SSL) certificates over our clients' web domains. In addition, we have more than one source of electricity to minimize outages. Moreover, we have UPSs and generators that can maintain power for a long time if all our electric sources are down in the event of a disaster.
Furthermore, EGID has implemented a very high-end firefighting system. The company has four internet sources to ensure it is always connected. This varies from cabled sources to wireless sources, such as WiMAX. Our physical security measures are implemented strictly to prevent unauthorized access to the data center. Entering our data center is a thorough and strict procedure that all our clients follow to ensure that only authorized people have access.
6-How does EGID ensure maintaining its position as a market leader in the industry?
This is an ongoing process of learning, monitoring, and enhancing our systems regarding features, efficiency, and security. EGID always strives for the best; hence, we always ensure that our staff is updated with the latest technologies and best practices in the market. Moreover, we are in direct contact with our clients to see the features they need and the problems they face, allowing us to identify the gaps and develop solutions for them. Finally, EGID always looks for new and creative ideas that serve the market based on its needs.
7-Can you discuss any challenges that EGID faces in the current financial climate, and how you plan to address them?
No doubt, the financial climate now is not very healthy due to currency devaluation, in addition to international crises that affected the whole world, such as COVID and the Russian-Ukrainian war. However, EGID is doing fairly well as it maintains its clients and services, especially our international clients who pay in hard currency. To avoid any financial strikes that might hit EGID, we always look for creative services and products to ensure that there is always a demand for our products; furthermore, we are doing our best to keep our stamina.
8-What are EGID's current revenue streams, and how do you plan to grow them?
As mentioned, our revenue streams are mainly software solutions, hosting, and market data dissemination. We have several plans to increase our software product range, as we plan to have a software system for financial auditors that will be incorporated with the initiative of Extensible Business Reporting Language (XBRL) financial data formatting. This big plan will be revolutionary in enhancing our financial auditing process. In addition, we are currently expanding our data center capacity as we procure extra processing power and storage to serve the increasing demand for our hosting services.
9-Who is your target audience? And how do you manage their needs and interests?
Our main target audience is the financial market in general. We are always looking for its needs and trying to find proper software solutions to fill the gaps that we find. On another aspect, we are increasing our data center capacity to cater to our clients' requests and to allow them to expand and accommodate more clients and transactions.
10-In your opinion, what is the impact of the currency devaluation on the EGX? And what advice would you give to traders?
The currency devaluation has a negative impact on the stock market for many reasons. Firstly, the devaluation causes the central bank to increase rates, which discourages investors from investing in the stock market as they find that the other alternatives of time deposits, certificate deposits, and treasury bills are more lucrative and safer (secured investments). Secondly, the stock prices are inflated to cope with the inflation rate, and this causes stagflation, which negatively affects the trading process. I advise the traders to properly study the fundamentals of the companies they are willing to invest in and select the most robust and stable companies in terms of revenue streams and fixed assets. I also advise them to avoid short-term investments and speculation, especially when the market is not stable. For the brokers, I advise them to attract more traders from different segments (mass traders), especially small investors who are willing to get the experience of stock trading. We have good experience with one of our clients (Thndr), who had this approach and achieved good results in the arena.
11-How do you see the company evolving in the next few years, and how do you plan to drive that change?
We have very big dreams. Our limit is the sky. We plan to increase our product spectrum and expand our financial market services outside the Egyptian borders. We know the competition abroad will be tough, but I am sure we are up to it.
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