{"id":573596,"date":"2020-08-11T04:28:13","date_gmt":"2020-08-11T04:28:13","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2020\/08\/11\/the-egx-is-allowing-investors-to-short-smaller-companies\/"},"modified":"2020-08-11T04:28:13","modified_gmt":"2020-08-11T04:28:13","slug":"the-egx-is-allowing-investors-to-short-smaller-companies","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2020\/08\/11\/the-egx-is-allowing-investors-to-short-smaller-companies\/","title":{"rendered":"The EGX is allowing investors to short smaller companies"},"content":{"rendered":"<p><a id=\"tldr-story-04\" class=\"content-anchor\"><\/a> <strong>The EGX is allowing investors to short smaller companies:<\/strong> The EGX yesterday approved plans to allow investors to short smaller companies in a bid to encourage short selling activity which has failed to take off on the exchange since it was launched in December, it announced in <a href=\"https:\/\/www.egx.com.eg\/downloads\/press_release_9-8-2020_english.pdf\">a statement (pdf)<\/a>. The bourse currently only allows investors to short larger companies which account for a minimum 0.005% of the exchange\u2019s total freefloating shares, but under the changes companies with a smaller market cap of 0.001% will be eligible for short selling. The original threshold was put in place to shield smaller businesses from being pummeled by predatory short sellers but will now be lowered in a bid to boost liquidity and trading, EGX Chairman Mohamed Farid said.<\/p>\n<p><strong>What is short selling, again?<\/strong> Think of it as betting against a stock. Investors who think a certain company is overvalued will borrow a bunch of shares and immediately sell them back to the market in the hope the price will fall. If the share price tanks, the investors can then buy them back and return them to the original owner, pocketing the difference. But if the stock rises, they will be forced to purchase them at a higher price than they sold, potentially leaving them with hefty losses.<\/p>\n<p><strong>Short selling has yet to take off on the EGX even as stocks suffered heavy losses during the height of the covid-inspired market meltdown in March.<\/strong> The EGX saw modest short selling transactions worth just EGP 100k during the first four months of 2020, leading Misr for Central Clearing, Depository & Registry (MCDR) Managing Director Tarek Abdel Bari <a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/bcfc1271-2557-4c95-903f-516fb4c1131a\">to describe it<\/a> as \u201cnon-existent.\u201d Abdel Bari attributed the disinterest to its relatively recent introduction to the market.<\/p>\n<p><strong>The list of new securities eligible for shorting will be announced by the EGX today,<\/strong> the statement said.<\/p>\n<p><strong>Background:<\/strong> The EGX and MCDR <a href=\"https:\/\/enterprise.press\/stories\/2019\/12\/02\/short-selling-comes-to-the-egyptian-stock-market-7495\/\">last year<\/a> launched short selling on the bourse following approval by the Financial Regulatory Authority (FRA) after amending the Capital Markets Act\u2019s executive regulations and in 2017 upgrading the bourse\u2019s trading systems to handle the transactions. The FRA as of last year had granted 51 brokerages licenses to facilitate short selling. There are currently 30 securities eligible for shorting.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The EGX is allowing investors to short smaller companies: The EGX yesterday approved plans to allow investors to short smaller companies in a bid to encourage short selling activity which has failed to take off on the exchange since it was launched in December, it announced in a statement (pdf). The bourse currently only allows [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":573597,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8572],"tags":[102,5662,68,72,125,3174,831,2380],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-573596","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-speed-round","tag-capital-markets","tag-depository-registry","tag-egx","tag-enterpriseam","tag-investment-watch","tag-misr-for-central-clearing-depository-and-registry","tag-short-selling","tag-speed-round","wpautop","entry"],"acf":{"mongo_id":"2d84d321-2f29-4125-b0c7-ab08ceb3387e","is_powered_by":true,"section_story_id":"55dfb38b-b3e4-4641-ba16-43c9425307a9","story_type":"1","photo_url":"https:\/\/ent.news\/2020\/8\/78.jpg","photo_position":"above","related_issue":[573584],"teaser":"","voice_url":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>The EGX is allowing investors to short smaller companies - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2020\/08\/11\/the-egx-is-allowing-investors-to-short-smaller-companies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The EGX is allowing investors to short smaller companies\" \/>\n<meta property=\"og:description\" content=\"The EGX is allowing investors to short smaller companies: The EGX yesterday approved plans to allow investors to short smaller companies in a bid to encourage short selling activity which has failed to take off on the exchange since it was launched in December, it announced in a statement (pdf). The bourse currently only allows [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterpriseam.com\/egypt\/2020\/08\/11\/the-egx-is-allowing-investors-to-short-smaller-companies\/\" \/>\n<meta property=\"og:site_name\" content=\"EnterpriseAM Egypt\" \/>\n<meta property=\"article:published_time\" content=\"2020-08-11T04:28:13+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i0.wp.com\/ent.news\/2020\/8\/78.jpg?fit=%2C&ssl=1\" \/>\n<meta name=\"author\" content=\"enterpriseam admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"enterpriseam admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2020\/08\/11\/the-egx-is-allowing-investors-to-short-smaller-companies\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2020\/08\/11\/the-egx-is-allowing-investors-to-short-smaller-companies\/\"},\"author\":{\"name\":\"enterpriseam admin\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#\/schema\/person\/ca597032db7e4db868359c123cec256d\"},\"headline\":\"The EGX is allowing investors to short smaller companies\",\"datePublished\":\"2020-08-11T04:28:13+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2020\/08\/11\/the-egx-is-allowing-investors-to-short-smaller-companies\/\"},\"wordCount\":378,\"publisher\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#organization\"},\"image\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2020\/08\/11\/the-egx-is-allowing-investors-to-short-smaller-companies\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/i0.wp.com\/ent.news\/2020\/8\/78.jpg?fit=%2C&ssl=1\",\"keywords\":[\"capital markets\",\"Depository &amp; 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The expanded list comes into effect at the opening bell today.\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/8\/95.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":568798,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/02\/04\/egypts-fra-accepts-egx-proposal-to-extend-short-selling-period-to-6-months\/","url_meta":{"origin":573596,"position":1},"title":"Egypt\u2019s FRA accepts EGX proposal to extend short selling period to 6 months","author":"enterpriseam admin","date":"4 February 2020","format":false,"excerpt":"REGULATION WATCH- FRA accepts EGX proposal to extend short selling, settling margin position period to 6 months: The Financial Regulatory Authority (FRA) has approved a proposal from the EGX to extend the period custodians can short shares to six months instead of two, effective today, the bourse said yesterday. The\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":598349,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/05\/22\/egypts-misr-clearing-to-provide-short-selling-platform\/","url_meta":{"origin":573596,"position":2},"title":"Egypt\u2019s Misr Clearing to provide short selling platform","author":"enterpriseam admin","date":"22 May 2019","format":false,"excerpt":"REGULATION WATCH- Regulator to give Misr Clearing key role in short selling: Misr for Central Clearing, Depository & Registry (MCDR) will provide a platform for traders and brokerage firms to use for short selling under changes to recently-issued short selling regulations, Egyptian Capital Markets Associations (ECMA) Chairman Mohamed Maher said.\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":593184,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/11\/20\/brokerages-arent-happy-with-how-much-egypts-short-selling-electronic-system-is-going-to-cost-them\/","url_meta":{"origin":573596,"position":3},"title":"Brokerages aren\u2019t happy with how much Egypt\u2019s short selling electronic system is going to cost them","author":"enterpriseam admin","date":"20 November 2019","format":false,"excerpt":"REGULATION WATCH- Brokerages aren\u2019t happy with how much the short selling electronic system is going to cost them: Brokerage firms have voiced concerns to the Financial Regulatory Authority (FRA) that they will be unable to afford the cost of the electronic system needed to short sell on the EGX, sources\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/12\/198.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":582609,"url":"https:\/\/enterpriseam.com\/egypt\/2023\/03\/13\/a-new-lending-pool-to-resuscitate-short-selling\/","url_meta":{"origin":573596,"position":4},"title":"A new lending pool to resuscitate short selling?","author":"enterpriseam admin","date":"13 March 2023","format":false,"excerpt":"Futures market could launch later this year.","rel":"","context":"In &quot;Capital markets&quot;","block_context":{"text":"Capital markets","link":"https:\/\/enterpriseam.com\/egypt\/category\/industries\/capital-markets\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2023\/3\/Stock-data-1600.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":570629,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/04\/08\/short-selling-in-egypt-remains-anemic-despite-potential-for-covid-profits\/","url_meta":{"origin":573596,"position":5},"title":"Short selling in Egypt remains anemic, despite potential for covid profits","author":"enterpriseam admin","date":"8 April 2020","format":false,"excerpt":"Short selling in Egypt has remained anemic since the mechanism was launchedon the EGX in December, Misr for Central Clearing, Depository, and Registry (MCDR) Managing Director Tarek Abdel Bari said, according to the local press. Over the past four months, the bourse has only seen \u201ca handful\u201d of short selling\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/573596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/comments?post=573596"}],"version-history":[{"count":0,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/573596\/revisions"}],"acf:post":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/issue\/573584"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media\/573597"}],"wp:attachment":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media?parent=573596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/categories?post=573596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/tags?post=573596"},{"taxonomy":"brand","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/brand?post=573596"},{"taxonomy":"newspack_spnsrs_tax","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/newspack_spnsrs_tax?post=573596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}