The Egyptian Exchange (EGX) launched its equally weighted index EGX100 EWI on 10 May 2020, as a mean to develop and diversify the Egyptian market indices and provide broader tools for investors to monitor the Egyptian market.
The Index tracks the performance of the top 100 companies in terms of Liquidity and activity which includes the constituents of EGX30 and the constituents of EGX70 EWI.
The index calculation started on 2nd of January 2006 with value of 1000 points. Every company in the EGX100 EWI have a weight of 1.00% at each quarterly review.
Mohamed Farid, EGX’s chairman, said that the methodology for calculating the new index was adopted after studying international practices to reflecting the performance of the 100 companies of the index in the Egyptian market.
The new EGX100 EWI index increases the chance of developing financial products such as Exchange traded funds, as the index is a good tool for financial institutions to issue Exchange traded funds, or mutual funds that could track the index performance passively “Index Tracking”.
The index is in line with the requirements of the market participants, especially mutual fund managers who have the desire to have a benchmark index that use equal weight method. The index complies with the amended percentage mentioned in the executive regulations of the capital market law and this would contribute to the promotion of the of mutual funds’ performance.
During the year 2019 and 2020, EGX Index Committee, an independent committee consisting of representatives from market participants, fund managers and banks, and chaired by EGX Chairman, responsible for overseeing the ongoing management of the current indices including development, marketing and periodic review procedures, launched the EGX30 CAPPED Index in February 2019, EGX30 TR in August 2019 and EGX70 EWI in February 2020.
The launch of EGX100 EWI is a continuation of the comprehensive development plan implemented by EGX’s Management to develop the market instruments and indicators, to meet the needs of the Egyptian capital market stakeholders. EGX is committed to the best international practice in managing its indices.