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Egyptian stock exchange takes steps to limit turmoil Short-selling and the introduction of a new index are among the proposals by Bourse authorities as trading volume falls to its lowest in years on domestic and global worries
The Egyptian stock exchange (EGX) has announced new trading measures to limit the negative impact of market fluctuations, according to Al Mal, a daily business newspaper. Plans include the launch of a new index measuring the most active shares, the introduction of short-selling, and changes to the Nile-X (Egypt's stock exchange for small and medium enterprises) and Over-The-Counter markets to unify delisting procedures. Trade in Egyptian stocks has been battered over the last few weeks as domestic political turmoil, poor company results and worries over the global economy have taken their toll. On Tuesday, the exchange saw its lowest trade volume in some six years, hobbled by falling numbers of foreign investors. The new index planned for mid-September will measure the performance of the most active 20 companies in the market, according to the EGX's vice chairman Mohamed Farid, with a 10 per cent cap placed on the index's constituents and revisions made every three months. Short-selling is also planned, but the launch date is subject to the approval of Egyptian Financial Supervisory Authority (EFSA). Short-selling involves the sale securities promised to, but not owned by, a seller, with the latter obligated to pay the lender of the stock any dividends or rights declared during the course of the loan. Another plan involves the exchange increasing the amount of data available for the bond market with an aim of encouraging companies to resort to this tool as a means to finance their projects.
