Lists of Securities Eligible for Specialized Activities (JAN. 2021)

Wednesday, 27 January 2021

Within the framework of EGX periodical review for companies eligible for specialized activities; Same Day Trading, Margin Trading and Short Selling, as per EGX Chairman Decrees No. 618 for the year 2020, No. 620 for the year 2020, No. 622 for the year 2020 & No. 623 for the year 2020, lists of Securities eligible for specialized activities (as of January 27, 2021) are amended as follows: (attached detailed lists)

The First List (A): encompasses 129 securities, a list that allows the same day trading as well as the margin trading and its acceptance as collateral up to 100% of their market value; it is the active market, according to the following criteria:

The market capitalizaƟon of the free floated shares shall not be less than 0.0002 of the total market capitalization of the free floated shares during the study period.
The number of trading days on the share shall not be less than 95% of the total number of trading days during the study period.
The number of the brokerage firms trading daily on the share shall not be less than 10% of the average daily number of brokerage companies trading in the market
The average daily number of clients trading on the share shall not be less than 0.3% of the average daily number of clients trading in the market during the study period.
The turnover of free floated shares shall not be less than 20% during the study period, or the average daily value traded of the share shall not be less than 0.001 of the average daily traded value of the total shares.

The Second List (B): encompasses 38 securities, a list that allows the same day trading as well as the margin trading and its acceptance as collateral up to 80% of their market value and it shall be the average market activity, according to the following criteria:

The market capitalizaƟon of the free floated shares shall not be less than 0.00005 of the total market capitalization of the free floated shares during the study period.
The number of trading days on the share shall not be less than 75% of the total number of trading days during the study period.
The number of the brokerage firms trading daily on the share shall not be less than 3% of the average daily number of brokerage companies trading in the market.
The average daily number of clients trading on the share shall not be less than 0.1% of the average daily number of clients trading in the market during the study period.
The turnover of free floated shares shall not be less than 10% during the study period, or the average daily value traded of the share shall not be less than 0.0005 of the average daily traded value of the total shares.

In addition, EGX 30 INDEX ETF shall be added to the list.

The Third list (C): consists of other remaining securities that are not allowed neither for same day trading nor margin trading.

Deals are excluded when calculating those standards, and EGX may in some take the historic data when adding the company shares resulting from the restructuring in order to

determine the extent of the criteria referred to are met. EGX may exclude companies meeƟng the previous standards in cases of joint ownership of 30% or more of shares between companies completed the previous items, or in case the issuing company is not abiding by the disclosure rules and procedures. The third List (others): the rest of the listed companies that are not allowed in any activities of the specialized and be the least active market.

List of Securities eligible for Short Selling: encompasses 53 securities, according to the following criteria:

The market capitalizaƟon of the free floated shares shall not be less than 0.001 of the total market capitalization of the free floated shares during the study period.
The number of trading days on the share shall not be less than 95% of the total number of trading days during the study period.
The number of the brokerage firms trading daily on the share shall not be less than 10% of the average daily number of brokerage companies trading in the market
The average daily number of clients trading on the share shall not be less than 0.3% of the average daily number of clients trading in the market during the study period.
The turnover of free floated shares shall not be less than 20% during the study period, or the average daily value traded of the share shall not be less than 0.001 of the average daily traded value of the total shares.
The number of issued shares shall not be less than 300 million shares. In addition, EGX 30 INDEX ETF shall be added to the list.

According to EGX Chairman Decree No. 622 for the year 2020 which stated “the lists will be effective starting from the next working day from announcement and in case of shares exclusion or moving from one list to another, a transition period will be granted to comply with collateral acceptance ratios related to margin trading for every list and excluded shares will no longer be allowed for same day trading starting from the next working day from the exclusion day”.

A grace period of 2 months is granted for companies to comply with collateral acceptance ratios related to margin trading for every list- in case of shares exclusion or moving from one list to another

The following will take place:

1.Securities allowed for both same day trading and margin trading (list A-list B) will be traded according to their collateral acceptance ratios

SecuriƟes excluded from list A -list B will no longer be allowed for same day trading and margin trading but outstanding opened positions will be allowed to close in a two -months period.
SecuriƟes moving between list A & list B will be allowed to margin trading according to their collateral acceptance ratios.
A grace period of 2 months is granted for companies in cases of shares exclusion from the list of companies eligible for Short Selling

Worth noting that this 2-month grace period has been raised from a grace period of only one month as per EGX Chairman Decree dated 1/11/2018.

Check here; https://www.egx.com.eg/en/newsdetails.aspx?NewsID=206329