The Egyptian Exchange Finishes the Periodical Review of EGX Indices

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The Egyptian Exchange Finishes the Periodical Review of EGX Indices

The Egyptian Exchange (EGX)’ indices during their periodic review witnessed a number of changes; 8 companies were removed from EGX 30 index with the entry of 8 new companies. While EGX 70 index witnessed the removal 18 companies, 2 of them joined EGX 30 index. EGX 100 index witnessed the removal of 16 companies.

EGX indices committee in its meeting approved the introduction EGX’ equal weights index (EGX 50 EWI), which is an index measuring EGX’ top 50 companies performance in terms of traded value. The index methodology has been built and developed in accordance with the international experiences and the best practices in the stock market indices’ field. The index has been tested on EGX electronic trading system. It starts with a value of 1000 points at the start date (2 July 2013), and it will be launched as of Sunday 2 August 2015.   

The Indices Committee had approved to develop EGX 30 index companies inclusion’ standards, in terms trading days, and the free float ratio, where it agreed to modify the standard of the trading days number so that it will be possible to include newly listed companies if the level of their liquidity and activity level since listing meets this criteria with a condition that their shares should be traded for at least   75% of the actual trading days, aiming that the index could be more reflective of the market performance during the last period. The Committee also approved the amendment of the free floated shares’ ratio, as the actual experience revealed the need to consider the free floated market capital volume, not only its ratio. Thus it’s now possible   to include the companies with a free floated shares’ rate less than 15% with a condition that the free floated shares’ market value should not be less than LE 100 Million, and should be consistent with the minimum requirements of the listing rules stating that the free float ratio should not be less than 5 %.

The Committee indicated that the amount of LE 100 Million has been set according to the medium standard of the free floated shares’ market value in EGX, which is reviewed periodically. Moreover, the committee approved the cancellation of the companies’ profitability standard, which states the exclusion of companies that achieves losses for 3 consecutive years from the indices.
The amendments to the current methodology came within the context to update the indices’ standards, in line with the regional and global markets’ indices standards, and in conformity with the price indices’ nature which differ from the total return’ indices with the relevant relation with profitability and basic performance.



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