In a recent development, the Egyptian Exchange (EGX) is set to unveil an Islamic Sharia-compliant index, targeting a launch window between October and November, with the renowned financial institution Standard & Poor’s (S&P) partnering in this venture.
Rami El Dokani, the EGX Chairperson, highlighted the collaborative effort with S&P to bring this Islamic financial instrument to fruition. Initial indications suggest that the Islamic index will encompass approximately 20 to 25 shares, though final numbers are yet to be pinned down.
This strategic move is anticipated to magnetize a broader investor base, amplifying the investment influx in the stock exchange and paving the way for increased foreign currency revenue through diverse investment strategies.
The inception of this Sharia-compliant index echoes the aspirations of investors who are keen to allocate resources to firms aligning with Islamic law principles. It offers a viable alternative to conventional stock trading. Such indices cater to individuals keen on mirroring the tenets of the Islamic economy in their investments, encapsulating the performance of shares that abide by Islamic law.
El Dokani further illuminated EGX’s ambitions to roll out a futures exchange in the upcoming quarter. The process is underway, with deliberations taking place with nearly ten financial giants, spanning both government and commercial sectors. Their objective is to initiate with a quartet or quintet of members for settlement.
He elaborated on the impending launch of futures contracts focused on the thirtieth index, with a prospective introduction of options contracts in the subsequent phase. There’s an anticipation that around 20 brokerage entities could meet the prerequisites for financial derivatives market licenses.
Moreover, El Dokani hinted at the potential 2024 debut of a pioneering market dedicated to carbon certificate trading. EGX is rigorously analyzing market dynamics to guarantee a successful launch, with plans to finalize this endeavor either by the year-end or early next year.
Reiterating EGX’s commitment to fostering private-sector collaboration, El Dokani emphasized their receptivity to proposals, further mentioning prospective partnerships with the Ministry of Youth and Sports. Among the discussed initiatives is the potential listing of entities affiliated with the ministry on the EGX.
In an adjacent development, EGX is gearing up to activate borrowing mechanisms tailored for “short selling.”
To champion capital market investment, EGX recently orchestrated a promotional conference spotlighting the burgeoning city “New Alamein”.
Concluding his insights, El Dokani expressed EGX’s vision to reach a diverse investor base, altering perceptions that stock investments are exclusive to the affluent. He accentuated the transformative role of the stock market in bolstering company financing and introducing novel investment instruments in EGX.
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