Egypt’s main listed stocks were hit on Tuesday by new listing rules that drove down the market’s benchmark EGX30 by 1.6 percent to record 7,287 points.
Both the board of the Egyptian Stock Exchange and the state watchdog Egyptian Financial Supervisory Authority (EFSA) approved new rules that only allow companies with at least five million shares and LE50 million in capital to be listed.
Companies already listed that have less than five million shares will be allowed to split their shares to meet the listing rules without needing permission from either the bourse or the EFSA, the exchange's chairman Mohamed Omran said on Tuesday.
"The new listing rules pushed 30 percent of the main index’s investors to head to the broader index EGX70 to buy the new split shares with low prices," Eissa Fathi, vice head of the securities division at Cairo Chamber of Commerce, told Ahram Online.
Fathi explained that splitting shares halves stock prices, so a stock that stands at LE3 will split into two and be worth LE1.5.
Mostly of the market's bellwethers fell after news of the rule, including the Commercial International Bank (CIB), which was down 2.1 percent, closing at LE32.8 per share.
Real estate developers Talaat Mustafa Group (TMG) slumped 1.2 percent, Palm Hills Development (PHD) fell by 2 percent and Six of October Development and Investment (SODIC) dropped by 0.8 percent, registering LE7, LE3 and LE23 per share respectively.
Eastern Tobacco, which has a monopoly in Egypt on cigarettes, rose 3.6 percent and closed at LE133 per share from LE129 after a recent increase in retail prices of cigarettes.
The broader index EGX70 rose 1.2 percent in a session that saw a daily turnover of listed securities at LE756.3 million.