FILE: Beltone Financial
CAIRO – 17 January 2018: Before the Egyptian Exchange (EGX) issues the results of its half-year revision of the index of February 2019, Beltone Financial expected the revision to represent net outflows of $17.6 million after delisting eight companies from EGX30 and substituting them with other eight companies.
“Our expectations for rebalancing suggest that eight companies from the EGX30 may be de-listed due to non-meeting of the trading value criteria with total outflows of $55.1 million,” Beltone stated.
On the other hand, Beltone’s forecast for rebalancing suggests that a total of eight companies may be included in the EGX30 index to meet the trading value criteria with a combined total cash flow of $37.5 million.
According to Betlone, the eight delisted companies are ABU QIR Fertilizers and Chemicals Industries Company with a weight of 4 percent and outflows of $19.2 million, Sidi Kerir Petrochemicals – Sidpec with a weight of 2 percent and outflows of $9.6 million, Orascom Construction (weight: 1.5 percent, outflows: $7.1 million, and Ibn Sina Pharma (weight: 1.3 percent, outflows: $6 million).
The delisted companies also include Edita Food Industries which weighs 1.2 percent and represents outflows of $5.6 million, Qatar National Bank Alahli with a weight of 0.9 percent and outflows of $4.3 million, and Egypt Aluminum (weight: 0.4 percent, outflows:$2.1 million), in addition to Porto Group with a weight of 0.2 percent and outflows of $1.2 million.
Furthermore, Beltone expected another eight companies to be added to the index which are: Credit Agricole Egypt with a weight of 2.4 percent and inflows of $11.5 million, MM Group For Industry & International Trade (weight: 1.3 percent, inflows: $6.4 million), Oriental Weavers(weight: 1.2 percent, inflows: $6 million), and Cairo For Investment & Real Estate Development (weight: 1 percent, inflows: $5 million).
The companies expected to be added also include Orascom Development with a weight of 0.9 percent, and inflows of $4.4 million, KIMA - Egyptian Chemical Industries (weight: 0.5 percent, inflows: $2.2 million),Arab Co. for Asset Management And Development (weight: 0.3 percent, inflows: $1.6 million), and Arabia Investments, Development and Financial Investment Holding Co (weight: 0.1 percent, inflows: $0.6 million).
According to Beltone's statement, the stock must meet three criteria to qualify for the EGX30 index. These criteria are: First, value of trading: When reviewing the EGX30 index, the traded values of all listed stocks are set in descending order and the top 30 stocks are selected in terms of trading values.
Second, repeat trading: Qualified companies that meet the liquidity standard must trade at least 50 percent of trading days during the benchmark rebalancing period.
Third, free trading: Qualified companies must have at least 15 percent as a free trading percentage. In the case of newly listed securities during the review period, 75 percent of the total number of trading days shall be traded - from the date of the first trading until the next audit date.
The last revision EGX made was in June 2018, which delisted six companies from EGX30 and listed five.