Egypt to Begin First ETF Listing Today before 2014 Ends

Egypt bourse approved during a listing committee meeting on Tuesday to enlist the exchange-traded funds (ETFs) certificates at an initial value of EGP 10 million (US$1.4 million).

This is the first time to enlist this financing channel in the Egyptian bourse. The local equity market is eager to see the start of trading ETFs that will allow investors to cover whole markets in various countries or several sectors at lower costs than other investment channels.
According to the bourse statement, the ETFs certificates will be divided into 1 million divided into EGP 10 each.
EGX Chairman Dr. Mohamed Omran said earlier this week ETFs would start trading in the first or second week of January 2015.

In April, Beltone Financial was the first company to obtain the license for ETFs and market maker activity, and is launching a fund called XT-Misr that mirrors the performance of the country’s EGX 30 stock index.

The bourse chairman expected EGX to see more initial public offerings (IPOs) next year, especially amid stability in local economic and political positions.

In March, Egypt’s financial market regulator released the rules to facilitate the creation of index and real estate funds as well as amendments to margin trading rules in an attempt to increase liquidity in the market and draw more local and foreign investors.

Exchange traded funds serve as open investment funds which follow the movement of specific indicators, listing and trading their supplementary documents on the stock market as shares and bonds. They allow investors to gain a broad exposure to entire stock markets of different countries and specific sectors with relative ease, on a real-time basis and at a lower cost than many other forms of investing.