Stock Market to Launch New Index "EGX100 EWI"

The Egyptian Stock Exchange announced that it will launch a new equal-weighted index "EGX100 EWI", which measures the performance of the best 100 publicly traded companies in the market in terms of liquidity and activity.

The Stock Exchange added in a press statement on Saturday that the index includes the companies that make up the EGX30 index and the companies that make up the EGX70 EWI, noting the cancellation of the older index "EGX 100".

The launch of the new index, which is calculated at a value of 1000 points, comes in line with international best practices in the area of ​​stock market indexes management, in which each publicly traded company listed on the new index receives the same relative weight of about 1% in the first days of the periodic review.

The Stock Market committee also approved modifying the methodology of listing companies in the indexes, so that the ones that make up the EGX100 EWI, the EGX70 EWI and the EWI EGX50 will be managed and handled as the main EGX30 index as of August 2020.

EGX100 EWI evaluates stock price performance

The Stock Exchange market confirmed that it took into account the inclusion of companies that achieve high trading values ​​on a monthly basis instead of considering the total trading values ​​at the end of the review period every 6 months, to avoid including companies that achieve spikes in trading values, yet, not a continuous ones.

On his part, Mohamed Farid, Chairman of the Egyptian Stock Exchange said that the methodology for calculating the new index is one of the approaches followed by many international institutions that issue indicators that reflect the performance of the companies in a more reflective way of their price performance.

Farid continued that the new index provides the possibility of developing financial products as the new index is a good tool that investment institutions can target to issue mutual funds through index tracking. "The index also comes in line with the requirements the market, especially investment manager, who wish to have an equal-weighted benchmark," he pointed out.

The index would help in enhancing the opportunities for growth and development of mutual funds by persifying the investment options before them and enabling them to accurately measure the performance of their portfolios.