The head of the Egyptian Stock Exchange, Omar Radwan, has warned investors about following recommendations from unlicensed entities, particularly those found on social media platforms such as Facebook and Telegram. He emphasized that investors should only deal with companies licensed by the Financial Supervisory Authority. Radwan made these remarks during his participation in the "Money Made Simple" conference.
Radwan stressed that investors should not allow anyone to directly advise them on buying or selling specific stocks, and that dealing in this field should only be done through licensed entities. He pointed out that there are many companies in Egypt licensed by the Financial Supervisory Authority to practice activities related to the stock market. Radwan urged investors to verify the license of the entity they are dealing with before relying on any investment information or recommendations.
The Egyptian Stock Exchange head cautioned against individuals who claim to be experienced in the market but actually aim to achieve personal gain at the expense of investors. He noted that some of these practices may involve pushing investors to buy certain stocks in preparation for selling them or inviting them to sell to benefit from price drops. Radwan highlighted that one of the biggest mistakes investors can make is allowing someone else to make buying and selling decisions on their behalf without verifying the entity providing these recommendations.
Radwan advised investors not to follow what he described as "half-educated individuals and charlatans" who may exploit the lack of experience of new investors, especially those new to the market. He emphasized the importance of relying on licensed entities when obtaining services or consultations related to investing in the stock market, rather than dealing with unknown recommendations circulated through social media groups.
The warnings from the Egyptian Stock Exchange head come amid a significant increase in the number of new investors in the market. Radwan revealed that around 550,000 new investors have registered in the stock exchange since the beginning of the year, compared to around 300,000 new investors during the entire previous year. He noted that if the current rate of new investors continues, the total number of new investors over two years could reach around one million.
Radwan pointed out that the large increase in new investors presents a challenge in terms of raising awareness about the nature of investment, risk management, and avoiding unreliable sources of information. He emphasized that many new investors have only experienced a rising market, which can make dealing with downturns more difficult for them. Radwan described these investors as "bull market investors."
Radwan stressed that investing in stocks inherently involves a high degree of risk and should not be viewed solely from the perspective of returns. He noted that investment in the stock exchange is associated with long-term goals and that market movements do not always follow a single direction continuously. The Egyptian Stock Exchange head highlighted that even in years when the market ends on a high note, the movement of prices is not always upward.
Key points
- Around 550,000 new investors have registered in the Egyptian Stock Exchange since the beginning of the year.
- The Egyptian Stock Exchange head warned investors about following recommendations from unlicensed entities on social media.
- Radwan emphasized the importance of relying on licensed entities when obtaining investment services or consultations.
