EGX Raises Share Price Movements Ceiling to 20%

EGX Raises Share Price Movements Ceiling to 20%

The Egyptian Stock Exchange (EGX) said on Sunday that it will raise the ceiling of stock price movements during the day to 20% for major stocks, and 10% for SMEs, starting next September.

Currently, EGX sets limits to stock prices movements to 10% either limit-up or limit-down, after which the stock is suspended.

Since 2011, the 10% cap has been in effect compared to the earlier 20%, under measures taken by the Egyptian Financial Regulatory Authority (FRA), to protect the market from violent volatility following the Jan. revolution.

All other precautionary measures introduced in 2011 were canceled in 2014, including the pre-opening session to determine opening prices.

The Stock Exchange decided to adopt and activate amendments to the trading system regarding the calculation of the shares closing price.

The new methodology for calculating the intraday closing price is based on the 30-minute “Moving VWAP” instead of the current method that relies on the volume-weighted average throughout the daily trading session.

It also includes the creation of an auction session to determine the closing price of the pre-close auction, before the end of the trading session and within the last half an hour, provided that the date of the auction takes place a week later, using “Trade-at-close” system.