The Egyptian Exchange (EGX) will launch, on Tuesday, a new index for the listed treasury bonds.
The new index includes the most liquid bonds on the stock market, while the market value of the bond will determine the weight of each issuance within the index.
The index takes into account both the return resulting from the change in bond prices, and the return resulting from the accrued coupons, which reflects the total return for the performance of the government bonds that make up the index.
Moreover, four sub-indices for treasury bonds will be launched soon, to be determined based on different maturity periods. These sub-indices will be reviewed monthly to exclude non-qualified bonds and include bonds that meet the criteria for joining the index in order to ensure a good representation of the Egyptian bond market. Treasury bond indices were calculated starting from 3 January 2021 at a value of 1,000 points.
The EGX provides an electronic system for the pricing of treasury bonds through the electronic government bonds trading system that allows providing competitive pricing. The presence of a reference index allows the development of new financial products such as index funds on bonds, as the index is a good tool that financial institutions can target to issue investment funds traded on it.
The EGX would publish the criteria for joining and exclusion from the new index and the method of calculating it, as well as all the statistical data related to the indices in the EGX bulletins.
