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EGX 20 Capped Index • The index is designed to capture the perfor mance of

EGX 20 Capped Index

The index is designed to capture the performance of the most active 20 companies in terms of market capitalization and liquidity, capping the weight of any constituent to a maximum of 10%.

EGX 20 capped index, is a free float market capitalization weighted index,

The index measures the return on investment through the changes in stocks market value (capital appreciation/ depreciation) only.

The index includes the top 20 companies in terms of liquidity and activity. The selection process concerning companies that have been traded during the last six months, however, if the company is among the most active stocks in terms of turnover, while its stock has not traded during the last six months by at least 50% of trading days, companies are excluded from the index.

Companies that go bankrupt, merge with other companies or are acquired by other companies will be excluded from the index.

Companies that make losses for three consecutive years are excluded from the index.

Companies that engaged in consecutive breaches to listing and disclosure rules will be excluded from the index.

The index avoid cross holdings thus exclude significant cross holdings, amounting to 30% or more are excluded from the index. In terms of indices, cross holdings can create a form of double-counting. For example, if both companies are included in the same index, the value of the holding in one company is reflected in the share price of the other. Thus, the market capitalization of each of the companies that is represented by the cross-holding should be removed from the index.

The index constituents are rebalanced four times every year, (First business day of February for the period 1 July to 31 December , and first business day of August for the period 1 January to 30 June; a comprehensive rebalances to adjust constituents) and (First business day of May and November; partial rebalances to adjust only capping weight factor of the constituents without any modification in the constituents itself). The index constituents weight for the all mentioned rebalances

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are calculated using the last session trading data and last quarter free float of each

are calculated using the last session trading data and last quarter free float of each quarter.

Corporate actions require an index divisor adjustment, this helps keep the index accurate and ensure that the movement of the index doesn't reflect the corporate actions of the companies.

The index inception date is 1 st February 2003.

Methodology:

1. The constituents are weighted according to free floated market capitalization.

2. Market capitalization of uncapped constituents:

3. Recalculated total market capitalization:

%

4. Recalculated market capitalization of capped constituents:

5. Capped market capitalization for each constituents to be capped:

%

.

6. Capping Weight Factor (CWF):

Constituent's new capped Mkt. Cap.

Capping Weight Factor (CWF)=

Constituent's original Mkt. Cap.

7. Divisor:

Divisor =

(adjusted Mkt. cap. at t 0 * CWF)

Index Value at t 0 =1000

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8. Index value Index Value = ∑ (adjusted Mkt. cap. * CWF) Divisor Index Divisor:

8. Index value

Index Value =

(adjusted Mkt. cap. * CWF)

Divisor

Index Divisor:

The divisor is a factor that converts the adjusted market capitalization of the index constituents to the index level. It is derived at the starting point of the index (Base Date) by dividing the adjusted market capitalization by an arbitrary number or multiplier. It is calculated on the inception date.

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