EGX Adopts the Methodology of “Tamayuz” Index for the SMEs Market

Egyptian Exchange Posted

The Egyptian Exchange’s (EGX) Index Committee adopted the methodology of “Tamayuz” Index to include listed companies in the Egyptian SME market.  The index is to be launched within days. 

The methodology of “Tamayuz” index is based on main criteria; to measure the strength and quality of financial and operational performance, in terms of annual accumulated growth rate of revenues generated from the main activity as well as cash flows from operation, as well as other indicators used to assess the performance of those companies.   The Index includes 8 companies with a base date of 1 January 2019, and a base value of 1000 points.

Dr. Mohamed Farid, Executive Chairman of EGX, said that the adoption of the standards and methodology of “Tamayuz” index by the Indices committee is a major step within the overall SMEs market structure. He continued that within days the index will be launched to reflect the performance of the SMEs market as well as allowing investment managers to issue financial products on this index.  It will also allow evaluation of their investments based on the index, especially since there is a maximum weight of companies is 35% according to the adjusted free float market capitalization which will avoid concentrating on number of companies and therefore has a good representation of various companies in “Tamayuz” Index.  

He stated that an executive decision will be issued to oblige listed companies in the SMEs market to contract a certified sponsor registered at EGX to start the structural plan, which includes obligation of the nominated advisor to assist listed companies in the SMEs market in the capacity building of its investor relations departments, allowing a more professional communication with shareholders and institutional investors.  Also the commitment of the nominated advisor to provide Research coverage of the company, contributing to attracting investments as well as enhancing liquidity of the market.

Farid added that the launch of “Tamayuz” index is a step within the comprehensive structuring plan of the SME market, which was launched by EGX two years ago, included the restructuring of nominated advisors to reach 11 and the planed launch of a new interactive website that meets the aspirations and needs of all parties wishing to follow the performance of this market after development.