DETERMINANTS OF CAPITAL ADEQUACY AT THE EGYPTIAN INVESTORS COMPENSATION FUND

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Abstract

The purpose of this study is to investigate the protection system of investors in the Egyptian stock markets, using a number of econometric techniques and hand-collected data of Egyptian Investor Protection Fund over the period from 2006 to 2014. We measure the capital adequacy through two variables, which may be a benchmark in it selves or can be compared to similar regimes at developed stock markets, these variables are: the fund reserves as a percentage of market capitalisations and fund reserves available to compensate owners of the market capitalisations, which in turn depend upon the number of customers accounts subject to compensations, number of the market portfolio owners, the value of the investor securities account at every compensation fund member, number of stock traders, number of listed shares and number of transactions. Overall, there is significant positive coefficient/relationship between market capitalisation, retained earnings and reserve. However, there is significant negative coefficient/relationship between Number of listed companies and fund reserves capital.

Keywords: Investor Protection Fund, Capital Adequacy, Stock Markets, Insurance Companies, Egypt

How to cite this paper: Saad, A., Elsayed, M. (2016). Determinants of capital adequacy at the Egyptian investors compensation fund. Corporate Ownership & Control, 13(2), 31-38. https://doi.org/10.22495/cocv13i2p3