The proposal, submitted by EGX Board after its approval by FRA, came after consultation with the Egyptian Capital Market Association (ECMA) and the Securities Division of the General Federation of Chambers of Commerce. The T + 0 trading mechanism is a trading mechanism that enables the investor to sell the purchased shares or buy all or part of the shares sold in the same session to activate trading.
Commenting on this, Mr. Mohamed Farid, EGX chairman, said that EGX management is always working to strengthen the market with trading mechanisms to raise the regional and international investment attractiveness of the market and keeping pace with the global developments in the financial markets. EGX Chairman said that the decision will increase the shares turnover in the market in a way to increase liquidity and trading rates and makes the Egyptian stock market compatible with the best regional and global models for trading in this regard.
“Liquidity and trading rates are one of the key determinants to list companies in global indices such as the MSCI, which EGX has always sought to achieve” he stated, pointing that the market activity increases the efficiency of equities pricing according to the interaction of supply and demand forces in the market. Mr. Farid pointed that EGX management aims to complete its efforts to enable and activate many financial instruments and products to diversify the investment options for all investors by studying the international experiences of a group of emerging and developed markets to find out the best international practices.
EGX, as part of its efforts to enhance the market liquidity and trading, has started in June 2018 to implement the Board of Directors’ proposal, which was approved by the FRA, to increase the maximum number of shares traded in the same session to 1/10000 instead of 1/20000, with the possibility that the customer repeats the same transaction on the security more than once in the same session with the same value of the quantity reservation order requested to be sold.
FRA has adopted EGX Board decision on the trading rules, specially with regard to the exit time period from the margin trading on securities that are excluded from the list “A” and “B” to become two months instead of a month for more easiness for investors. “The recent decisions will increase the securities attractiveness and will stimulate trading and increase liquidity, which would provide more investment options for all of the investors’ categories” according to EGX chairman.