What is EGX ?
EGX is the only registered Securities Exchange in Egypt. EGX is the trading venue whereby member firms or brokers could buy/sell securities electronically, on behalf of their customers or investors. EGX is currently a public juristic person and there are no shares issued or owned by other entities as it is owned by the government. Though, EGX is owned by the government, it is managed like a private company.
When was the Cairo Stock Exchange and Alexandria Stock Exchanges established?
The Alexandria Stock Exchange was officially established first in 1883, followed by Cairo in 1903. The two Exchanges were very active in the 1940’s and Alexandria Stock Exchange was ranked the fifth in the World. For more information about the history of EGX, please refer to EGX history page.
The Presidential Decree No. 51 for year 1997, re-defined the legal structure of the Exchanges and accordingly EGX have two locations: Cairo and Alexandria but they have one Chairman and one Board of Directors.
What is the role of the Egyptian Financial Supervisory Authority?
The Egyptian Financial Supervisory Authority (EFSA) is responsible for the supervision of non-bank financial markets and instruments, including the Capital Market, the Derivative Exchange as well as all activities related to Insurance Services, Mortgage Finance, Financial Leasing, Factoring and Securitization. To learn more information about the EFSA, please refer to www.cma.gov.eg
What are the types of securities listed and traded on EGX?
There are three types of securities traded on EGX. Equity or Shares (Common and Preferred), fixed income (Government and Corporate bonds) and Close-ended Mutual Funds.
How are prices of shares determined?
Prices of the shares traded on EGX are determined by the supply and demand of the forces same like any other commodities.
What is a member firm or broker?
A member firm is licensed by the Egyptian Financial Supervisory Authority to trade on EGX. In addition, EGX must approve membership after the member firm passes an exam on the trading system of EGX. The member firm acts as the link between the investor and EGX. The member firm carries out investors’ transactions whether buy or sell in return for an agreed upon commission fee from investors. In other words, member firms act as agents so they buy and sell securities on behalf of investors since investors are not allowed to trade directly or have access to EGX trading system. Member firms also provide advice to their customers based on their in-house research capabilities. To learn about member firms eligible to trade on EGX, please refer to list of member firms Page.
What is Misr for Central Clearing, Depository and Registry?
Misr for Central Clearing, Depository and Registry (MCDR) is a private company, which handles the clearing and settlement operations as well as acting as the Central Depository for all securities in Egypt. The main shareholders of MCDR are EGX, banks and member firms.
Since MCDR was established in October 1996, the securities market in Egypt moved toward a completely dematerialized environment, in which physical stocks are no longer existent. Dematerialization has several advantages including: avoiding the inconvenience of carrying documents, eliminating the danger of losing securities either by thrift or any damage, eliminating the risks associated with securities being lost or faked, simplifying the trading process as securities become easily transferred through the book entries or accounts of member firms at the Depository, having in place a safe and electronic way for distributing dividends and other corporate actions of listed companies. To learn more information about MCDR, please refer to www.mcsd.com.eg.
What is Egypt for Information Dissemination Company?
Egypt for Information Dissemination (EGID) was established in June 1999 as a private and fully owned subsidiary of EGX. EGID is an information provider. EGID’s mission is to stimulate investment growth in Egypt and the Middle East by increasing the level of transparency, thus building investor confidence in the economy by making the information of EGX listed companies available to investors, data vendors, investment banks etc. using all available delivery channels and methods to suit the needs of the different interested parties.
To learn more information about EGID, please refer to www.egidegypt.com
What is a stock or share?
When a company wants to increase its capital, it offers part of its stocks or shares at the stock exchange via an Initial Public Offering, whereby an investor can buy stocks or shares in this offering. Buying shares or stocks in company, an investor becomes an owner of a part of the company and you can make money if the company makes money and you can vote in the company.
What is Initial Public Offering (IPO)?
Going public happens when a company sells shares part of its stock to the public at large for the first time. This is called an initial public offering or IPO. Companies go public in order to accumulate capital to expand.
What is a private placement?
A private placement is whereby a company sells its shares to a select group of few investors who are usually qualified buyers who undertake due-diligence before buying the company’s shares.
What is earned when I invest in shares?
An investor earns dividends or a share in the net profit of a company if it makes money. Also, an investor earns capital gain if the price of shares appreciate compared to the price that the investor has originally bought the shares for. However, investors should be aware that a company sometimes fail to distribute dividends (zero dividends) and that the market price of shares could be lower than the original price that the investor has paid so in this case the investor would end up by having a capital loss.
What is dividend yield?
Dividend yield is a percent that is equal to dividends paid in LE divided by current market price of a share.
What is price to earnings (P/E) ratio?
A valuation ratio of a company's current share price compared to its per-share earnings. The P/E multiple shows how much investors are willing to pay per LE of earnings. It is useful to compare the P/E ratios of companies in the same industry, or to the market in general, or against the company’s historical P/E ratio.
What is a bond?
When a company needs to borrow money, it issues a bond and in this case it owes this specific amount of money to bondholders. When an investor buys a bond, he/she becomes a lender to the company. Bondholders expect to earn usually a semi-annual rate of return when buying bonds plus the initial amount of investment or face (par) value of the bond at maturity date. To learn more about investment in bonds, please refer to Educational brochures-bond basics.
What is a Mutual Fund?
A mutual fund is a pool of investments used to invest in a large diversified portfolio of securities that will be managed by professional management. An investor in a mutual fund is a shareholder who buys shares of the fund. Each share represents a proportionate ownership in all the fund’s underlying securities. The securities are selected by a professional investment manager to meet a specified financial goal, such as growth or income. For more information about mutual funds, please refer to educational brochures-mutual funds.
What is the difference between open-ended mutual funds and close-ended mutual funds?
A close-ended mutual fund issues only a certain number of shares. After the shares are sold and the money is invested in its portfolio of securities, trading of the fund's shares can take place. The company is not obligated to redeem its shares or issue more shares. An investor who no longer wants to hold shares in the fund may simply sell them in the market. Thus a close-ended fund is traded on the Exchange or EGX. An open-end mutual fund, by contrast, is constantly offering new shares to the public and redeeming its outstanding shares. There is no limit to the number of shares that can be issued. Open-ended fund shares are bought and sold directly through the fund itself or its agents, not over-the- counter or on an exchange.
How do I buy shares or invest in the stock market?
To buy stocks, bonds or close ended funds on the stock market, you must choose a member firm to trade through it. Using EGX Trading System, your stockbroker will buy or sell shares based on your instructions.
How do I choose a member firm or broker?
The first thing to realize is that brokerage services are highly personal and the quality of the service you will receive will depend not only on the firm that you decide to do business with, but also on the particular sales representative you choose. Your goal should be to find a broker who will be able to understand and accommodate your particular investment status and goals. To learn more about choosing member firms, please refer to educational brochures-brokers.
Are there any restrictions regarding foreign participation?
There are neither restrictions precluding foreign participation in the market nor any rules against repatriation of profits or capital gain. Foreign issuers and foreign member firms are treated similarly like their Egyptian counterparts.
What are the rules governing taxation with regard to investment in securities?
In the case of individuals, corporations, mutual funds and international funds, no taxes are levied on dividends and capital gains.
Where do I find company news?
There are various sources for getting company news. The first of which is EGX web site www.egx.com.eg which includes detailed information about listed companies or issuers. Another source is the individual companies web sites. Most of EGX top issuers have their own web sites that include detailed information about them. Finally member firms or brokers provide detailed company and sector research to their customers.
What are the hours of trading on EGX?
To view The Egyptian Exchange (EGX) trading hours, please click here
How does a company get listed on EGX?
To be listed on EGX, the issuer must fulfill certain legal and financial requirements as defined in the listing rules of EGX. For more information about the listing rules of EGX, please refer to how to list page
What is a stock index?
An index is a numerical value used to measure changes in financial markets. The index is set at a numerical level on the base period or starting point against which a percentage change can be compared to at any particular point of time. The index measures the moves up and down of stocks reflecting market price and market direction.
What is EGX 30 Index?
EGX 30 Index is a market capitalization weighted index. The index methodology requires that the market capitalization of the index is adjusted by free float. Thus the constituents of the index market capitalization are multiplied by the percent of free float of each constituent. Liquidity is the most important criteria for selecting the constituents or companies that comprise EGX 30 Index. Choosing constituents is not based on ranking them according to their market capitalization (Highest to lowest) but according to their trading activity or liquidity. Also profitability is not a must for companies to be included in the index. For more information about the methodology of EGX 30 Index, please refer to EGX 30 index page
What is EGX 70 Index?
EGX 70 Index is a price index. The index tracks the performance of the 70 active companies in terms of liquidity and activity, after excluding the 30 most active constituent-companies of EGX 30 Index. EGX 70 index measures the change in the companies' closing prices, without being weighted by the market capitalization and does not take into account the free float. For more information about the methodology of EGX 70 Index, please refer to EGX 70 index page
What is EGX 100 Index?
EGX 100 Index is a price index. The index tracks the performance of the 100 active companies, including both the 30 constituent-companies of EGX 30 Index and the 70 constituent-companies of EGX 70 Index. EGX 100 index measures the change in the companies' closing prices, without being weighted by the market capitalization and does not take into account the free float. For more information about the methodology of EGX 100 Index, please refer to EGX 100 index page
What are Global Depository Receipts (GDRs)?
Global Depository Receipts (GDRs) are negotiable certificates that usually represents a company’s publicly traded equity. They are also considered as an equity substitute for the local shares that can be used to list on a foreign stock exchange e.g. London, Luxembourg, New York etc. GDRs are often launched for capital raising purposes and they are as liquid as the underlying shares since the two are interchangeable.
Are there any Egyptian GDRs listed on foreign exchanges?
Yes, several Egyptian companies have their shares traded on London Stock Exchange in the form of GDRs. Also, some Egyptian issuers have their shares traded on New York Stock Exchange and Luxembourg Stock Exchange. For the traded Egyptian GDRs listed on foreign exchanges Click here
Are there tours of EGX trading floor?
Yes, EGX provides tours to investors and students in order to for them to have an idea about the history & the trading system of EGX.
Pre-appointment should be taken a week ahead of the visit from the Public Relations & Communication Department. Please contact email@example.com.
Does EGX issue any educations publications?
Yes, EGX is committed to educating the public at large about the fundamentals of capital markets in general, including investment in stocks, bonds and mutual funds; why companies list on EGX; how to choose a broker and others.
For more information about EGX educational brochures, please refer to:
educational brochures page.
If I have further questions about EGX or the capital market in Egypt, what do I do?
Please contact us at firstname.lastname@example.org and we would be happy to answer all your queries.