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Non Egyptian Investors Record Purchase Of EGP 770 Million During Today's Midday Trading Session

Within the framework of the ongoing cooperation between the Egyptian Exchange (EGX) and the Financial Regulatory Authority (FRA) to develop the trading mechanisms and raise the market’s efficiency, EGX will begin on Sunday, to implementation of two decisions taken by EGX Board of Directors after FRA’s approval. The decision are to reduce the trading halt of shares to a maximum of 10 minutes and to allow the margin trading and same day trading on the new shares of an IPO.

Mohamed Farid, EGX Chairman commented that the EGX management works on improving trading mechanisms to enhance liquidity and market activity; this will increase the appetite of the regional and international investment towards EGX and keep pace with the global developments in the capital markets.

Farid continued, "Reducing the 15-minute trading halt to a maximum of 10 minutes when exceeding the momentary closing price raises the sustainability and endurance of trading."
EGX developed its trading mechanisms in September 2017 by reducing the trading halt to be 15 minutes instead of 30 minutes.

Farid revealed that EGX examined the international experiences of emerging and developed markets to finalize the best international practices in this regard, which emphasized that the trading halt varies from market to market and ranges are between 2-5 minutes.
In addition, the trading halt mechanism varies between markets and does not depend only on the change in the share’s price. There are markets that do not halt trading unless the price exceeds the maximum limit for a specified period such as 2 minutes or more.

In addition, there are other mechanisms applied in some exchanges based on auction trading session for a period of 1-3 three minutes based on which is set a new price for the share during the trading session.

To complement the efforts of developing the trading, EGX will allow the margin and same day trading (T+0) on the new IPOs shares once they begin trading.  However, they should meet the quantitative and qualitative criteria determined by the stock exchange during the IPO.

He added that enhancing liquidity and trading stimulates IPOs and private placements through the capital market. Liquidity and trading are the pillar and key guarantee for attracting successful IPOs.

The decision allows the listing of new IPOs’ shares on Lists A & B once they meet quantitative criteria in accordance to the corresponding criteria Lists A & B during a period of 6 months prior to the IPO execution date, including:

The market capitalization of free-float offered shares falls within the range exceeding 30% of the descending order of listed securities on the list.

The number of brokerage firms involved in the demand side of the IPO falls within the range of the top 30% of the descending order the brokerage firms through which the listed securities are traded.

The number of shareholders participating in the IPO shall not be less than three times the minimum required according the Listing Rules.

Based on this, EGX Chairman said that this amendment will raise the attractiveness of newly listed and activates the trading. This provides more investment opportunities for all investors’ categories.

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