The Egyptian Exchange (EGX) has announced the results of its semi-annual review of market indices, which took place in February 2024. The review led to several changes in the composition of the EGX30, EGX30 Capped, EGX30 TR, EGX70 EWI, and EGX100 EWI indices.
The review process monitors the performance and eligibility of the companies listed on the EGX according to the methodologies of each index. The process involves excluding companies that do not meet the criteria and adding new ones that qualify.
The EGX conducts two reviews every year, one in January and one in July, with the changes taking effect from the beginning of February and August respectively. The review period covers the previous six months, from July to December and from January to June.
The EGX has also updated the methodologies of its main indices to increase the importance of liquidity and activity rates for the securities included in the indices. The EGX30, the benchmark index, now requires that a company’s shares be traded on 95% of the trading days during the review period, up from 65% previously. The EGX70 EWI, the equal-weighted index, now requires 90% of the trading days, also up from 65%.
In addition, two new liquidity criteria were introduced. The first one states that the daily average of traders in a stock should not be less than 0.1% of the daily average of client traders in the market during the review period. The second one states that the turnover rate for freely tradable stocks should not be less than 10% over the last six months or that the daily average trading value of a stock should not be less than 0.0005 of the daily average total stock trading value in the main market.
The Treasury Bonds Index also saw some changes during the review period, with 21 issues being removed from the index and two new ones being added. As a result, the index now consists of 19 issues. The EGX reviews the Treasury bond indices monthly according to the inclusion and exclusion criteria based on the bond indices methodology.
The EGX said that the continuous development of the market indices methodologies is in line with global best practices. It also said that the changes were made after consulting with various market stakeholders and representatives on the Index Committee at the EGX, as part of the social dialogue that occurred during the discussion of the EGX’s development strategy, as per Article (36) of the strategy.
The semi-annual review for the EGX30, EGX30 Capped, and EGX30 TR indices revealed the names of the companies that joined or left the indices. The new entrants were Egyptian International Pharmaceuticals – EIPICO, Ibn Sina Pharma, and Delta Sugar. The companies that were excluded were Sira for Education, Credit Agricole Egypt, and B Investments.
