EGX to launch first ETFs with Beltone Financial
The Egyptian stock exchange - AFP/Khaled Desouki

CAIRO: The Egyptian Stock Exchange granted Beltone Financial Holding Company a license for establishing XT-MISR, the first Exchange Trade Funds in Egypt, through the EGX main index EGX30, Al-Maal Business Daily reported Monday.

Mohammed Omran, Chairman of EGX’s board of directors, announced Monday that “inaugurating such ETFs will contribute towards diversifying the financial instruments and the available alternatives for investments,” he said, adding that, the ETFs’ securities and documents will be submitted for trading at EGX daily, like other shares.

The new ETFs will have a small risk rate, and as such will be a hedging tool for all investing individuals and financial institutions.

Commenting on the new ETFs, Saeed Hilal, the Executive Manager for Al-Hilal Al-Saudi Company for Financial Securities, said the new indexes fund will boost and attract more investment at the EGX, pointing out that Egyptian Stock Exchange is considered one of the first Arab Stock Exchanges to launch an ETF.

“Investing in the ETFs will be through a professional market maker or mediator, who will be responsible for executing the offers and demands,” Hilal told The Cairo Post, pointing out that designating professional market makers will spur many individuals and institutions to invest in the ETFs, as it poses less risk.

“Appointing such skillful and professional market makers will ensure semi-stable profit rates for the investors,” Hilal said, adding that the documents and the financial securities of the ETFs will be more stable, and as such it will be less harmful.

EGX’s regulations require that the ETFs’ capitals be more than 30 million EGP. Further the fund will be operated through professional market makers, he said, pointing out that the funds’ capitals will be utilized by the market makers in controlling the documents and securities’ movements.

During declines, the market makers will utilize the fund’s capital for purchasing to boost the securities’ prices, while during an increase in prices the market makers will interfere and buy securities to control the prices, Hilal explained.

Hilal added that the joint management of EGX and the Egyptian Financial Supervisory Authority for monitoring transactions will regulate the movement of financial securities and documents during EGX trading sessions to prevent corruption and monopolization, as such protecting the investors’ money.

In the same vein, Alaa Saba’ , head of Beltone Financial Holding Company’s board of directors, said, “Signing such an agreement to establish an ETFs in Egypt will boost and stimulate investment into financial securities in Egypt,” according to Al-Maal.

Saba’ indicated that the fund will include a number of financial securities, pointing out that the fund’s importance lies in its lower cost for investments.

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