The trading session started today, Tuesday, with the official launch of four sub-indicators to measure and follow up the performance of the Egyptian government bonds traded on the Egyptian Stock Exchange according to different maturities. Minister of Finance, Dr. Mohamed Farid, Chairman of the Egyptian Stock Exchange, his deputy, Ahmed Sheikh, and a number of stock exchange leaders.
This comes after the Egyptian Stock Exchange Indicators Committee adopted a new sub-index approach to complete its efforts to develop indicators to measure the performance of traded securities, allow the provision of investment products that follow these indicators and enhance the diversity of investment products available to meet all investment categories, and this is the first time in the history of the Egyptian Stock Exchange since a year 1883, in line with international best practices in the field of developing and managing stock exchange indices.
The index includes the most traded bonds, and the market capitalization of the securities determines the weighting of each issue in the index. The index takes into account both the yield from changes in bond prices and the yield from coupons to maturity, and reflects the total return on the performance of government bonds that make up the index.
This step is coupled with the comprehensive vision adopted and implemented by the Egyptian Stock Exchange management to develop and improve the efficiency of the government bond market, enhance liquidity, activate its trading, and help create an active secondary market, which helps Egypt. The government obtains financing at competitive costs on behalf of the treasury.
The Egyptian Stock Exchange management launched the first composite index in the history of the Egyptian Stock Exchange to track the performance of the treasury bonds listed on the stock exchange, after the launch of the first comprehensive Egyptian trading system in December 2020 in full. In 2021. The national debt (fully developed through the Egyptian Stock Exchange).
Minister of Finance Dr. Mohamed Maait affirmed that the ambitious plan adopted and implemented by the Egyptian Stock Exchange administration to develop a market for restricted government treasury bonds traded on the Egyptian Stock Exchange is in concert with the efforts of the Ministry of Finance and its affiliated ministries. The action plan is expected to extend the maturities of debt instruments to 3.7 years. This has eased pressure on public finances by the end of the current fiscal year, instead of the previous 1.3 years. It is expected that the development of the new index and the new policy introduced by the Egyptian Stock Exchange administration will improve the efficiency of the national debt pricing process and enhance its liquidity.
Maait added in press statements, today, Tuesday, that the government is very keen to complete and launch a plan to expand the ownership base of state-owned enterprises through the stock exchange, revealing that there are new government proposals before the end of the current period. Fiscal year.
Dr. Mohamed Farid, Chairman of the Egyptian Stock Exchange, stressed that the development of new indices, whether they are a composite index or a sub-index that reflects the maturity dates of the various bonds, aims to improve the efficiency of the tracking process. And measuring the overall performance of government bonds to enhance the vision and investment attractiveness to support diversification of liquidity-enhancing market transactions and investment options in front of all categories of current and potential investors.
Farid added that the process of developing indicators is in line with the recommendations of market workers, especially investment managers, about the importance of having a reference index that tracks the performance of treasury bonds, which helps to enhance their paper, and that bond indices can, if they wish, be able to develop new financial products. The index is a great tool for financial institutions to target the issuance of ETFs.