Cairo – Mubasher: The Egyptian Exchange (EGX) on Thursday announced it will launch a new index, the EGX30 Capped, as of Sunday, 3 February.
The new index will include the most active 30 stocks in terms of liquidity, the EGX said in a statement.
Market capitalisation will be set based on the weight of the free-float shares of each company within the index, the Egyptian bourse added.
By introducing the EGX30 Capped, the stock market will end trading on the EGX20 Capped, the EGX noted.
The new index is a scale-weighted, the EGX said, pointing out that it has set a maximum weight limit for each company within the index at 15% during the quarterly review of stocks’ weight to limit the control of a few numbers of companies on the general trend of the index.
Mohammed Farid, the chairman of the EGX, said that the EGX30 Capped will boost the efficiency of the indices as effective instruments for measuring market performance.
The new index will also help to attract investment institutions, which will boost trading and liquidity, the main factor of the strength and competitiveness of any stock market, Farid added.
He highlighted that new index enables the possibility of introducing financial products such as index funds that investment institutions can target to issue investment tracking funds (Index Tracking).
This step comes as a completion for the EGX’s integrated development plan on all indices to meet the demands of market makers
