EGX Completes The Development Of Its EGX 30 Index Methodology

The Egyptian Exchange (EGX) completed the development of its main index EGX30 methodology to have a more reflective index of the market performance. This comes within the framework of the development program adopted by EGX management from “the value-added chain” perspective, to raise the efficiency and competitiveness of EGX.

The new methodology of EGX30 Index components includes the following:

The total trading value is calculated after excluding the “Deals” value of transactions per month for the traded companies.
Companies are arranged monthly where top 30 companies are selected in terms of total monthly turnover.
The frequency of reiteration of the company’s inclusion among the top 30 companies during the review period is calculated (January to June - July to December).
The frequency of reiteration of the company’s inclusion is analyzed and the monthly turnover is reviewed.

Then companies are selected according to the following criteria:

The most frequent companies included within the top 30 companies during the review period of 6 months. In case of new listed companies, which start trading during the audit period, the frequency is calculated since the start of trading on them.
Total value traded during the review period; As per the previous criteria, EGX amended the number of trading days standard as a condition for companies to join EGX 30 components to be 65% of the total number of trading days during the review period instead of 50% in the past and thus the minimum is 78 trading days instead of 60 trading days.
And finally, minimum free-float trade ratio was maintained at 15% as is.

Mohamed Farid, EGX Chairman, said that the development of EGX 30 index methodology came after consultation and dialogue with the market participants and studying the best international practices in this regard, in order to make the main index more reflective for the market performance and movement. "We are currently working on a comprehensive development plan that includes all indices, to diversify the investment options for all categories of investors, thereby to enhance trading and liquidity, which is the primary objective of any capital market looking to grow and compete".