The trade on Exchange Traded Funds (ETFs) in the Egyptian Exchange’s (EGX) benchmark index EGX-30 started Wednesday, with the capital market registered an EGP 6bn gain that day.
This is the first time ETFs were offered on the Egyptian stock market. The EGX-30 index increased by 2.53% to record 9544.08 points, and the broader index inched up by 1.13%.
The Nilex index also increased by 0.96%, although the small and medium enterprises index decreased by 0.35%.
Prior to the end of 2014, the EGX listing committee approved the listing of the first Exchange Traded Fund (ETF) certificates with an initial value of EGP 10m.
“ETFs are similar to traditional investment funds, in being formed of a set of securities traded in the stock exchange, but the main difference is that ETFs are committed to follow a certain index performance (represented in the EGX 30 index in this case) and so its performance is close to the index performance,” the EGX said in an official statement.
In a previous interview with Daily News Egypt, EGX head Mohamed Omran stated that the capital market was eager to present the ETFs.
On Wednesday, Omran said that the launch of ETFs on the market is a “strategic step” to introduce a new financial tool and to make a quantum leap.
Omran added that the addition of ETFs allows the Egyptian capital market to increase its presence on the “investment map” of private foreign institutions interested in this tool.
During 2014, the Egyptian stock market witnessed the largest number of companies listing since 2010, with 13 new companies being listed in the main index and the Nilex index. The capital for the companies listed during the past year, amounted to approximately EGP 1.9bn, ten times more than the capital of companies listed in 2013.
The highest value of trade of bonds in the history of the EGX was also registered in 2014, totalling EGP 67bn.