Week ending January 23, 2021

EGX 30: 11,655 (+1.8%) weekly change, (+7.5%) YTD  
Traded Value 1W Avg: EGP 615M , (+0.8%) above 90D Avg.  
EGP:USD: 15.72 (+0.4%) weekly change 

Local Pick-up

EGX reviews new EGX30 index methodology

The EGX developed a new EGX30 methodology that aims to give the index more stability. The new criteria will be based on liquidity & traded value as before, in addition to “market capitalization weighted by free trading” (Check Word of the Week). A requirement that the value of the adjusted market capitalization to be not less than the median of the adjusted market capitalization for the top 60 companies in terms of liquidity. This is to ensure that large companies with high liquidity are well represented in the index, not just the highly traded small & medium cap companies that retail investors favor. (Egyptian Exchange)

Orascom Construction & Siemens to design Egypt’s first 1,000 KM high-speed electric rail network.

Orascom Construction announced it has signed together with Siemens & Arab contractors an MoU with the national authority of tunnels to design & install Egypt’s first high-speed rail system. The rail system is a 1,000 km high-speed national electric rail network worth some USD 23B connecting Ain Sokhna to Al Alamein while passing through the New Administrative Capital. (Orascom Construction).

The liquidation of Egyptian Iron and Steel is a final decision.

The government made a final decision to liquidate the 67 years old Egyptian iron & steel company due to deteriorating financial performance & working capacity. The company has accumulated losses worth EGP 8.2B in June 2020, which represents 547% of the shareholder’s rights. (CNN).

Global Pick-up

Joe Biden announces USD 1.9T stimulus package

Biden’s USD 1.8T proposal is thought to be American rescue plan,  it is double the 2009 financial crisis recovery package. The plan includes USD 350B for state & local government aid, +USD 20B national vaccination program, plus increasing the unemployment benefits & the federal minimum wage to USD 15/hour. (Snacks)

Market wrap up

Stay informed by checking out our weekly wrap up of financial markets performance here.

Weekly Thunderstrike!

Alibaba shares jumped by 8.5% after Jack Ma appeared for the first time in 3 months when he blasted China’s regulatory system

Topic of the week – Free-Float methodology 

The free-Float methodology is a widely used method to calculate the market capitalization of stock index underlying companies. It is calculated by multiplying the share price by the number of shares actively traded on the market, not all the shares outstanding as in full-market capitalization. Free-float method reflects a more accurate representation of market movements as it excludes the locked-in shares that are owned by insiders, promoters or governments & aren’t actively traded.