CASE

Cairo stock exchange and Alexandria stock exchange in Egypt



Cairo stock exchange and Alexandria stock exchange in Egypt

During one of their informal turn of the century meetings at the Café New Bar, Cairo's merchants and brokers were reminded once more by their leader, Monsieur Moise Cattaui, that the time had come for Cairo to follow Alexandria's example and have its own Bourse. With the number of limited liability companies reaching 79 at an aggregate capital of 29 million pounds, the city's taipans could no longer conduct pork barrel politics on Cairo's sidewalks or inside coffee shops and hotels. (Lee 2002:51-78)

And so it was when on Thursday, 21 May 1903, an ad hoc site committee presided by Maurice Cattaui Bey, chose the old premises of the Ottoman Bank (today Groppi-Adly Branch) on Maghraby Street as the elected but temporary official headquarters of the newly incorporated Bourse and Banking Company of Egypt Limited . a.k.a. Bourse Khediviale du Caire. (Lee 2002:51-78)

With ambitious plans in mind, the new company leased the premises for a non-renewable period of six years at an annual rent of 400 pounds. In the meantime, an international competition was initiated for the design of a dedicated bourse to be situated at the centre of Cairo's European district of Ismailia, not far from the National Bank of Egypt (today Central Bank).

In April 1907, the prize for best design went to the French award-winning architect Raoul Brandon (designer of the Cairo Orosdi-Back department store). The timing couldn't have been better, or so everyone thought. Emboldened by success and drunk on growth, the promoters of the Cairo bourse were in an excessive mood. It was public knowledge that when lumped together, the Cairo and bourse were in an excessive mood. It was public knowledge that when lumped together, the Cairo and Alexandria Bourses rated among the world's top five Stock Exchanges. Egypt's economy was at an all-time high and the number of companies traded in the Cairo Bourse alone had reached 228 with a combined capital of 91 million pounds.

Seventy-three brokers and intermediaries were on hand to take care of the spiralling share trading. The modest premises on Maghraby Street had most certainly outlived its usefulness.

But like the swing of a pendulum, the high state of euphoria disappeared overnight. Prudence having given way to high-risk speculation, what had started out with a real estate boom in Egypt, ended in what became known in the annals of speculative history as the Crash of 1907. (Lee 2002:51-78)

Some historians concede that the money panic of 1907 started in Alexandria, Egypt, with the failure in July of a large bank - Cassa di Sconto. Japan was hit next, then Germany, then Chile. By October, the fallout reached Europe and the United States. In Egypt, the overextended banks folded up one after the other. As share prices plummeted, soon enough, a by now jobless broker, Mr. Alfred Nahman, was appointed chief liquidator of the Bourse and Banking Company of Egypt ...