The amendment allows listed companies to stock split the shares’ nominal value more than once within 12 months since the date of last split, without the need for regulatory authorities’ approval, as long as the liquidity ratios on the company’s shares were lower than the market liquidity.
Worth mentioning that Article (60) of the executive listing rules and regulations, which have been canceled, “In all cases, listed companies may not split the shares’ nominal value except once in 12 months since the date of the last stock split”.
Canceling Article (60) of the executive listing rules paved the way for the activation of Article (49) of the executive listing rules, which allows companies whose shares’ liquidity ratios exceeds the market liquidity by splitting the nominal value of their shares more than once within 12 months, subject to obtaining no objection. By the Stock Exchange and the Financial Supervisory Authority, with the obligation to publish a disclosure report containing the reasons and justifications of the retail process.
This action is in support of the Government’s move to activate the program to expand the ownership base of the governmental companies through the stock exchange to contribute to the structuring of these companies and increase their governance. Hence, the stock split supports the growth in activating demand for securities that will go through an IPO within the government’s program.
Mr. Farid, EGX Chairman, said that permitting the stock split of the nominal value of listed companies more than once a year helps in activating the trading in the stock exchange as well as increasing the attractiveness of traded securities as it will attract new segments of investors to the market.
Farid added that simplifying the procedures associated with splitting the nominal value of shares and reducing the companies’ share price contributes to the success of the government IPO program as it makes stock prices affordable to all investors segments.