UK-London: Egypt: Restructuring & Rebranding of the SME Market Segment of EGX

Notice Abstract
Egypt: Restructuring and Rebranding of the SME Market Segment of EGX Single Stage Open Competitive Selection Project Description: The technical cooperation project is taking place within the EBRD Initiative on Local Currency and Capital Markets Development (LC2). This Bank-wide strategic Initiative aims to identify and support sequenced reforms and policies in EBRD’s countries of operations (COOs) that contribute to local currency and local capital market development. One of the ways that the Bank supports this role is in producing focused studies and providing assistance to developing the local capital markets based on international standards and best practices. One of the focus areas of LC2 is increasing the access to capital market financing for small and medium sized companies (SMEs). SMEs are the driving force behind economic growth, employment, poverty alleviation and wealth creation. But, SMEs face more severe credit conditions than larger companies, which include higher interest rates, shorter maturities and increased collateral. Access to capital market financing is limited, as exchanges are still focusing their business development efforts on mid- to large-cap companies and examining the options for increasing the number of transactions in order to secure revenues. Some of the stock exchanges (SEs) in EBRD’s countries of operations (COOs) have established SME segments, though they are still at an early development stage compared to the share of SMEs in those markets. Within this context, the Egyptian Exchange (EGX) had discussions with EBRD to restructure the EGX SME platform "NILEX". The platform was launched in 2007 as the first market for SMEs in the region, with new listing rules that focus on a cost-effective regulatory regime adapted to the needs and characteristics of SMEs. The new market aimed to support growing medium and small enterprises and help them grow their businesses, increase their competitiveness and raise their contribution to economic growth. However, after 11 years of operations, only 32 companies are listed on the SME platform. The platform has, to date, a total market capitalization of USD 60 million and an average daily trading volume of USD 160,000, with almost no institutional or foreign investments. Moreover, all capital increases undertaken by NILEX-listed companies did not exceed USD 15 million. EGX has recognized the need to address the rising challenges that hindered the desired growth of the SME platform. Within this context the Egyptian Exchange (EGX) has requested technical assistance to support the restructuring of the SMEs platform to ensure that it is poised to provide the conducive environment for SMEs to develop and access equity market finance and help maximize their contribution to the local economy. EBRD now intends to engage a consulting firm to propose a detailed restructuring plan for the EGX SME platform. Assignment Description: EBRD intends to select and contract a consulting company (the Consultant) to the Assignment. The expected outcome of the Assignment is (a) conduct a comparative review of the SME platform b) define the optimal set-up of the restructured SME platform based on international experiences and prepare an implementation roadmap. The selected Consultant is expected to provide the following services: ?Activity 1: Conduct a comparative review of the SME platform ?Activity 2: Define the optimal set-up of the restructured SME platform It is expected that the Consultant bases the recommendations on international standards and best practices as well as lessons learned from SME financing platforms from other comparable countries, taking into account relevant international or local regulations such as the Markets in Financial Instruments Directive and Regulation (MiFID2/MiFIR) in the EU and Jumpstart Our Business Startups Act (JOBS Act 2012 and the currently discussed JOBS and Investor Confidence Act 3.0 ) in the US which enabled the creation of SME markets

Notice Details
CONTRACT NOTICE – NATIONAL
Notice Type: SERVICES
1 Authority Details
1.1
Authority Name and Address
Official Name:
European Bank for Reconstruction and Development (EBRD)
Postal Address:
N/A
Town:
London Postal Code:
Country:
UK
For the attention of:
Larissa Gosling Telephone:
N/A
E-Mail:
goslingl@ebrd.com Fax:
N/A
Internet Address (URL):
1.2
Address from which documentation may be obtained
As in 1.1

1.3
Completed documents must be returned to:
As in 1.1

2 Contract Details
2.1
Title
Egypt: Restructuring & Rebranding of the SME Market Segment of EGX

2.2
Description of the goods or services required
Egypt: Restructuring and Rebranding of the SME Market Segment of EGX

Single Stage Open Competitive Selection

Project Description:

The technical cooperation project is taking place within the EBRD Initiative on Local Currency and Capital Markets Development (LC2). This Bank-wide strategic Initiative aims to identify and support sequenced reforms and policies in EBRD’s countries of operations (COOs) that contribute to local currency and local capital market development. One of the ways that the Bank supports this role is in producing focused studies and providing assistance to developing the local capital markets based on international standards and best practices. One of the focus areas of LC2 is increasing the access to capital market financing for small and medium sized companies (SMEs).

SMEs are the driving force behind economic growth, employment, poverty alleviation and wealth creation. But, SMEs face more severe credit conditions than larger companies, which include higher interest rates, shorter maturities and increased collateral. Access to capital market financing is limited, as exchanges are still focusing their business development efforts on mid- to large-cap companies and examining the options for increasing the number of transactions in order to secure revenues.

Some of the stock exchanges (SEs) in EBRD’s countries of operations (COOs) have established SME segments, though they are still at an early development stage compared to the share of SMEs in those markets.

Within this context, the Egyptian Exchange (EGX) had discussions with EBRD to restructure the EGX SME platform "NILEX". The platform was launched in 2007 as the first market for SMEs in the region, with new listing rules that focus on a cost-effective regulatory regime adapted to the needs and characteristics of SMEs. The new market aimed to support growing medium and small enterprises and help them grow their businesses, increase their competitiveness and raise their contribution to economic growth.

However, after 11 years of operations, only 32 companies are listed on the SME platform. The platform has, to date, a total market capitalization of USD 60 million and an average daily trading volume of USD 160,000, with almost no institutional or foreign investments. Moreover, all capital increases undertaken by NILEX-listed companies did not exceed USD 15 million. EGX has recognized the need to address the rising challenges that hindered the desired growth of the SME platform.

Within this context the Egyptian Exchange (EGX) has requested technical assistance to support the restructuring of the SMEs platform to ensure that it is poised to provide the conducive environment for SMEs to develop and access equity market finance and help maximize their contribution to the local economy. EBRD now intends to engage a consulting firm to propose a detailed restructuring plan for the EGX SME platform.

Assignment Description:

EBRD intends to select and contract a consulting company (the Consultant) to the Assignment.

The expected outcome of the Assignment is (a) conduct a comparative review of the SME platform b) define the optimal set-up of the restructured SME platform based on international experiences and prepare an implementation roadmap.

The selected Consultant is expected to provide the following services:

◾Activity 1: Conduct a comparative review of the SME platform

◾Activity 2: Define the optimal set-up of the restructured SME platform

It is expected that the Consultant bases the recommendations on international standards and best practices as well as lessons learned from SME financing platforms from other comparable countries, taking into account relevant international or local regulations such as the Markets in Financial Instruments Directive and Regulation (MiFID2/MiFIR) in the EU and Jumpstart Our Business Startups Act (JOBS Act 2012 and the currently discussed JOBS and Investor Confidence Act 3.0 ) in the US which enabled the creation of SME markets.

The Consultant will be tasked to liaise with all concerned key stakeholders locally to ensure a broad level of acceptance of the proposed set-up. It is foreseen that the Consultant organizes three workshops, one for the Financial Regulatory Authority (FRA), the Ministry of Investment and one for key stakeholders, to test and discuss the proposed new setup and market model. Furthermore, the Consultant is expected to organise a roundtable discussion with selected SME platform listed companies and with prospective SME listing candidates to collect their views on challenges and opportunities that could be seized through restructuring the SME platform.

2.3
Notice Coding and Classification
2.4
Total quantity or scope of tender
Location: Egypt

Assignment Start Date and Duration: The Assignment is expected to start in December 2018 and has an estimated overall duration of 6 months.

Cost Estimate for the Assignment: EUR 180,000 (exclusive of VAT).

3 Conditions for Participation
3.1
Minimum standards and qualification required
4 Administrative Information
4.1
Type of Procedure
The procedure type is unknown.

4.2
Reference number attributed to the notice by the contracting authority
75620

4.3
Time Limits
Responses by 13-11-2018 Time 23:59
4.5
Language or languages in which tenders or requests to participate can be drawn up
EN
4.6
Tender Submission Postbox
5 Other Information
5.1
Additional Information
Please visit the following portal to view this notice:

https://www.ebrd.com/work-with-us/procurement/pn-75620.html

Closing date: 13 Nov 2018 at 23:59 London

(MT Ref:275809)

5.2
Additional Documentation
5.3
Publication date of this notice
24-10-2018
SF 51a