On Sunday, May 7, 2023, The Egyptian Exchange (EGX) starts implementing the new rules to calculate the intraday momentary closing price and the end-of-day closing price after approving these rules by Financial Regulatory Authority (FRA.)
The new rules can be summarized as follows:
- Additional condition is added to calculate the intraday momentary closing price during the trading session. It is that the minimum trading turnover of the share has to be at least EGP300,000 for the main market and EGP150,000 for the small and medium-sized companies (SME) market, or their equivalent in foreign currencies.
The intraday momentary closing price during the trading session is the Moving Weighted Average Price (MVWAP) that satisfies the above condition.
- In the Closing Price Auction Session, a maximum permitted price change percentage is added for the price calculated during the closing price auction session to be considered as the end-of-day closing price. This percentage is 10%± for the main market and 5%± for the SME market.
It is calculated based on the last intraday momentary closing price or from the reference price if the former is not available. In all cases, this percentage should not make the calculated price to exceed the share price limits.
EGX’s Operations Committee is to review these percentages periodically every 3 months in full coordination with FRA.
- All orders subject to a quantity condition: Minimum Fill (MF) and All-Or-None (AON), and/or a Good Till Time are prohibited from participating in the closing price auction session whether recorded before or during that session.
These new rules come as part of EGX’s efforts to improve the methodology of calculating closing price to avoid sudden and sharp changes and to make it more reflective of supply and demand forces. One of EGX’s main targets has always been to preserve the interests of all investors.
