Egypt’s HC Securities seeks to launch ETF before 2016-end

Egyptian investment bank, HC Securities and Investment is planning to launch an exchange-traded fund (ETF) before the end of the current year, its head of asset management stated Sunday.

The new fund is still under study to determine the value of its initial capital, Omar Radwan – HC’s head of asset management – told Amwal Al Ghad.

In mid January 2015, Beltone launched Egypt’s first ETF namely, XT-Misr that mirrors the performance of the country’s EGX 30 stock index, the investors’ yardstick for the Egyptian stock Exchange (EGX). Gomaa said XT-Misr’s capital currently ranges between 20 and 30 million pounds.

ETFs are typically funds that track equity indexes, though they can also track commodities and other assets, with component stocks usually represented in proportion to the size of their market capitalization.

ETFs are traded like a stock and can allow investors to diversify their risks and reduce transaction costs.

The introduction of ETFs in Egypt comes amid a flurry of takeovers and share issues on Egypt’s stock exchange, signalling resurgent interest from international investors in a market looking to restore confidence after the turmoil unleashed by a 2011 uprising which ousted leader Hosni Mubarak.