Egypt Exchange in Ongoing Talks With S&P Dow Jones Over Proposed Market Downgrade

The Egyptian Exchange (EGX) is engaged in continuous discussions with S&P Dow Jones Indices regarding the proposed reclassification of Egypt’s stock market from an emerging market to a frontier market, according to EGX Chairman Omar Reda.

Speaking to reporters on the sidelines of the listing conference for Tawsaa Factoring on the main market, Reda said the Egyptian capital market has undergone significant regulatory and legislative reforms in recent years, strengthening its position among emerging markets despite concerns raised in the index provider’s latest review.

“We are maintaining active communication with S&P Dow Jones to address the technical and regulatory observations that led to the proposed downgrade,” Reda said, emphasizing that the exchange remains committed to working closely with relevant stakeholders to improve market accessibility, efficiency, and competitiveness.

Reda highlighted substantial improvements in Egypt’s capital market framework, noting that recent reforms have been accompanied by a marked increase in trading activity, liquidity levels, and transaction volumes.

According to the EGX chief, these developments reflect growing investor confidence and reinforce the attractiveness of the Egyptian market for both domestic and international participants.

The exchange is seeking to demonstrate that recent progress in market infrastructure and regulation should be taken into account before any final decision on Egypt’s classification is made.

Reda said the EGX plans to continue coordinating with S&P Dow Jones on issues related to market structure and foreign investor accessibility, which have been cited among the factors behind the proposed review.

The objective, he added, is to establish a joint roadmap aimed at resolving outstanding challenges, enhancing the investment environment, and aligning the Egyptian market more closely with international best practices.

The EGX chairman also revealed that several companies currently listed on the Nile Exchange for small and medium-sized enterprises are expected to transition to the main market in the coming period.

The move forms part of the exchange’s broader strategy to support high-growth companies, expand the pool of listed firms, and deepen Egypt’s capital market.

S&P Dow Jones Indices recently proposed lowering Egypt’s market classification from Emerging Market to Frontier Market as part of its 2026 country classification review. The index provider cited persistent challenges related to market structure and foreign investor access, despite improvements observed since July 2024.

Under the proposal, if the reclassification is formally approved, the new status would take effect in September 2027, providing Egyptian authorities and market participants with time to implement additional reforms and address outstanding concerns.