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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

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:
Mkt. Cap. u uncapped cunxt. = Iotol Hkt. Cop. - Hkt. Cop. o const. to bc coppJ

3. Recalculated total market capitalization:
Reca|cu|ated tuta| Mkt. Cap. =
Hkt. Cop. o uncoppcJ constitucnts
% o wcigbt o oll uncoppcJ constitucnts


4. Recalculated market capitalization of capped constituents:
Reca|cu|ated Mkt Cap. u capped cunxt.
= RccolculotcJ totol Hkt. Cop. - Hkt. Cop. o uncoppcJ const.

5. Capped market capitalization for each constituents to be capped:
Capped Mkt. Cap. ur cunxt. u mure than 1% we|ght
=
RccolculotcJ Hkt Cop. o CoppcJ const.
no. o constitucnts to bc coppcJ


6. Capping Weight Factor (CWF):



7. Divisor:
Capping Weight Factor (CWF)=
Constituent's new capped Mkt. Cap.
Constituent's original Mkt. Cap.
(adjusted Mkt. cap. at t
0
* CWF)
Divisor =
Index Value at t
0
=1000




8. Index value



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.
(adjusted Mkt. cap. * CWF)
Index Value =
Divisor

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