The EGX management introduced the auction session to determine the closing price of stocks at the end of the trading session.
By: Mohamed Zain
Sat, Apr. 22, 2023
Egyptian Stock Exchange (EGX) Chairman, Rami El-Dokany, revealed that the Financial Regulatory Authority has approved the development of a mechanism for calculating the closing price during the auction session, with the aim of avoiding sudden and sharp changes in the closing price and preserving the interests of all categories of investors.
El-Dokany explained in press remarks that the EGX management has been consulting with the Financial Regulatory Authority during the last months of 2022 to develop a mechanism for calculating the closing price during the auction session.
At the same time, all parties related to this issue were regularly and systematically surveyed in order to create modifications that are responsive to the market and traders’ needs and to avoid any negatives that could impact the integrity and safety of the markets.
He added that teams from the Egyptian Stock Exchange have been formed to carry out the necessary tests to implement these modifications, and the new mechanism will be announced soon after the completion of those tests and the necessary modifications to electronic trading systems.
The EGX management introduced the auction session to determine the closing price of stocks at the end of the trading session, a system that is used in more than 90% of global stock exchanges, and contributes to achieving transparency in the prices of traded stocks.
The closing price is calculated according to the following priority criteria: firstly, the price that achieves the largest trading volume; secondly, the price that leaves the least amount of remaining unexecuted orders; and thirdly, the average of executable prices.
The EGX has witnessed remarkable performance over the past months, breaking records and achieving new levels of market capitalization, attracting local and foreign investors.
The exchange has introduced several measures to enhance transparency, facilitate trading, and attract new listings. These developments have contributed to improving the investment climate in Egypt and promoting economic growth.