The brand new Nile Stock Exchange (NILEX – http://www.nilex.com.eg/en/px) saw strong trading appetite on 3 June, its first day of trading. NILEX is an initiative of the Egyptian Exchange (EGX – www.egyptse.com) and aims to support growing medium and small enterprises in the Middle East and North Africa region.
The Chairman of EGX, Maged Shawky, said that 4 companies were traded on 3 June for a total trading volume of 1.4 million shares, worth LE 10 million (US$1.8 mln). Shares had launched at par value and prices registered significant increases in the first trading session from this.
The biggest value traded was in El-Barbary Investment Group (BIG), recording LE 7 mln ($1.2 mln), followed by El Bader Plastic, registering a trading value of LE 2.6 mln.
The NILEX trading runs daily from 11am-noon. Brokerage firms operating in the main market can place Bids and Asks. The EGX supervises the trading in NILEX and listed companies must meet the same disclosure rules as companies on the main market. NILEX had taken 4 years of research, planning and preparation and had its first listings approved in mid-2008.
A total of 10 companies are listed on NILEX, covering industry, information technology, retail, mining and the agriculture, chemicals and medical. They are: El Badr Plastic, Masria Card, TN Holdings for Investment, Kato Agriculture Development Co., Utopia Real Estate Investment and Tourism, Ameco Medical Industries, International Company for Fertilizers and Chemicals, Al Oroba Trading Mining and Supplying, AL Moasher for Programming and Information Dissemination and El-Barbary Investment Group (B.I.G). The last two were only allowed to join in the last few days.
Trading will follow an auction system style like the discovery session applied on the main market. Brokers can enter investors’ bid and ask offers any time during the last ten minutes in the session, and the transaction will be completed based on the price that ensures the highest volume traded. If more than one price matches the criteria, some other criteria is taken to choose from among the prices. The price which ensures that the least amount will be left unexecuted is to be chosen. If 2 prices are equated, in this case the average of the two prices is to be chosen. After the end of the session the orders that match the price are executed (from the orders given during the session). This criterion has been chosen due to the small size of these companies, as the auction system provides a better mechanism for trading and pricing these companies.
Dr. Mohamed Mustafa Omran, EGX Vice Chairman, had been appointed chairman of the NILEX Advisory Committee in terms of a decree issued by Dr. Mahmoud Mohieldin, the Minister of Investment.