Egypt's stock market develops new methodology for calculating shares' closing price

CAIRO – 2 August 2021: The  Board of Directors of the Egyptian Stock Exchange (EGX) has activated the full amendments to the trading systems in the Egyptian Stock Exchange, related to the foundations and determinants of calculating the closing price of shares, to be implemented early next September.

The new methodology for calculating the intraday closing price of shares is based on the 30-minute time-moving “Moving VWAP” weighted average.

This is in lieu of the current method of weighted average volumes over the duration of the daily trading session.

The new methodology 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 stock exchange administration sets the date of the auction session during the next week.

Moreover, if the auction session results in a new closing price, ownership transfers are allowed for a period determined by the stock exchange before half past two and after the auction session on the closing price resulting from the auction session, and it is called “Trade-at-close”.

In the event that the bidding session does not achieve a new closing price, the transfer of ownership will be allowed at the last “Moving VWAP” price during the Trade-at-close session.

The amendments to the closing price of shares also included the unification of the daily change rate of the prices of the listed securities to be throughout the entire day in its entire sessions combined, which includes the pre-opening auction session, the continuous trading session and the auction session to determine the closing price to be 20 percent throughout the entire day, which is the last of the procedures of the precautionary measures that were applied after the 2011 revolution.

The period from now until the official activation of the amendments related to setting the closing price, as well as the price limits in early September, provides sufficient time for all relevant parties, including operating companies and data suppliers, to adjust their positions with regard to the required technological infrastructure.

EGX ended Sunday in green, as: EGX30 increased 0.63 percent, EGX 50 hiked 0.56 percent, EGX 70 climbed 1.66 percent, and EGX 100 jumped 1.38 percent.