Heated debates have been sparked off on how effective to employ the new trading surveillance system – MillenniumIT for boosting the Egyptian Exchange (EGX)’s regulatory role.
Some experts asserted that the timing of launching such a system is inconvenient amid the current low levels of traded values and volumes the market witnesses. Unlike, other experts believe that taking such measures, which target at developing EGX’s surveillance role, is quite useful for the market.
Wael El Nahas, a financial analyst with HA Securities, said the timing of launching such a trading surveillance system – MillenniumIT was ‘inconvenient’ and damaging to the market and brokerage firms.
“MilleniumIT has been founded mainly to track the political powers which are executing transactions in the market; for example to know if Muslim Brotherhood were net sellers or buyers.” El Nahas added
He also noted that MillenniumIT system will lessen the speculations on the stock market which currently suffers from low liquidity.
“The market currently incurs low liquidity so decreasing the speculations would not be effective but harmful.”
El Nahas mentioned that on the first day of adopting MillenniumIT system, the capital market lost EGP 20 million during the early hours of the trading session.
“To adopt such a system nowadays would be disastrous as the EGX trading system are currently based on the daily small speculations which affect the market price level.”
Accordingly, El Nahas has called for carrying out investigations with Dr. Mohamed Omran and Dr. Ashraf El-Sharkawy- the chairman of the Egyptian Financial Supervisory Authority (EFSA) – on choosing the wrong time to adopt MillenniumIT system which can contribute to the market’s fall.
Furthermore, Mohamed Anwar – analyst at Wedian Securities Stock Brokerage & Bookkeeping – said the new trading surveillance system is not ‘effective’ if currently adopted amid the low trading values and volumes.
“The timing is just inconvenient to launch MillenniumIT.” Anwar added
“The new trading surveillance would be effective in case of having high trading values and volumes.”
On the other hand, Dr. Mohamed Omran referred to MilleniumIT as an important asset to EGX in fulfilling its vision of providing an equitable, transparent and high quality market place. He also added that MillenniumIT has a proven track record in technology solutions for capital markets and EGX looks forward to reaping the rewards of a cutting-edge surveillance system, that can meet the Egyptian market’s future needs and ensure EGX prominence in regulation”.
In the meanwhile, Tony Weeresinghe, CEO of MillenniumIT was quoted as saying: ‘We are very pleased to be partnering with the EGX, one of the oldest exchanges in the region and the world. To effectively oversee its markets, the EGX must employ a surveillance system that is not only capable of rapidly recognizing abnormal trading patterns but is also able to support further investigation of such behavior, while easily adapting to the changes taking place in the market – demands that Millennium Surveillance™ is perfectly suited to meet.’
Moreover, Mohamed Saad – senior technical analyst at Naeem Brokerage, said any measures taken by the EGX so as to increase the surveillance methods would be effective and fruitful for the market as they would contribute to reduce such speculations which bring about EGX indices’ fluctuated performance.
“MillenniumIT will prove its effectiveness once the market restore its high levels of trading values and volumes.” Saad added
Worth mentioning, London Stock Exchange Group (LSEG) has recently announced that three exchanges on three continents, Borsa Italiana, Johannesburg Stock Exchange (JSE) and Mongolian Stock Exchange (MSE) have successfully migrated to the Group’s ultra-low latency, high performance trading platform, Millennium Exchange.
