With more than 100 million people, Egypt will become more important in the future. Especially since it comes from two decades of positive economic performance. For those interested in investing in Egypt, we will analyze its most important stock market indices.
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Introduction
As the most populous country in North Africa, as well as a member of the Arab countries, Egypt can be considered a regional power. Its population is around 110 million inhabitants and continues to grow every year.
This means that, eventually, it will have a population larger than that of any European country, including Russia.
Economically, while Egypt is still a fairly poor country, much progress has been made. Economic growth rates since the beginning of the twenty-first century have been high. And that has made it possible for the standard of living of much of the population to improve.
The currency of Egypt is the Egyptian pound, whose international code in the financial markets is EGP. It is a fairly unstable currency, mainly due to the relatively high inflation rates in the country.
As far as stock market activity, Egypt has two stock exchanges, located in Cairo and Alexandria, the largest cities in the country. The company Egyptian Exchange, often also called EGX, is in charge of both exchanges and also publishes several stock market indices.
Because most Egyptian companies are not known abroad, investing in the country through a passive fund can be a good idea. With that goal in mind, we will analyze the most important stock market indices in Egypt.
EGX 30
The EGX 30 is Egypt’s main stock market index, calculated by the country’s own stock exchange. It was introduced in 1998 with an initial value of 1,000 points. It is important to note that the index is mainly published in US dollars, although its shares are traded in Egyptian pounds.
Thus, the EGX 30 is composed of the 30 largest companies in the country, as long as they meet certain criteria set by the creators of the index. Within the index, companies are weighted according to their market capitalization adjusted by free float.
If you want to learn more about the EGX 30, you can visit the website of the Egyptian Exchange.
EGX 100 EWI
In 2020, the Egyptian Stock Exchange decided to introduce a new stock market index with the goal of giving more coverage to a greater number of listed companies.
Thus, the EGX 100 EWI is a stock market index composed of the 100 most important companies in the country. Unlike most stock market indices, which tend to give a higher weight to their largest companies, this index treats these 100 stocks equally. That is, each of them has an equal weight within the index.
As a result, it is a very useful index to know how Egyptian companies are performing, on average. Without distorting the figures by focusing too much on the biggest ones.
For more information about the EGX 100 EWI, you can visit the Egyptian Exchange website.
MSCI Egypt IMI
Finally, the MSCI Egypt IMI is a stock market index calculated by the US company MSCI. The number of stocks within the index is not constant, but fluctuates over time.
Thus, the MSCI Egypt IMI is composed of all Egyptian companies that are part of the global MSCI Emerging Markets IMI index.
This index weights stocks based on their free-float-adjusted market capitalization. Some of the largest companies in the index are Commercial International Bank and Eastern Company.
Importantly, MSCI also calculates another index for Egypt, simply called MSCI Egypt. However, due to the low number of stocks included in that index, it is not very useful for investors.
Additional information about the MSCI Egypt IMI can be found on MSCI´s website.
I hope you found this post about stock market indices in Egypt useful. To learn about stock market indices in other countries, visit the following section:
Funds and ETF
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