Arab Finance: The Egyptian Exchange (EGX) announced changes to the constituents of key market indices as part of its semi-annual review, with the new modification taking effect on Tuesday, September 1.

The EGX30 index will see changes involving four companies, while the EGX70 EWI index will witness changes affecting 12 companies, three of which will be promoted to the EGX30. Meanwhile, nine companies will be added to or removed from the EGX100 EWI index.

As part of the latest review, EGX also outlined amendments to the constituent selection criteria for the EGX30 and EGX70 EWI indices as part of its ongoing efforts to boost the efficiency and stability of its benchmark indices and align their methodologies with international best practices.

As for the EGX30, the ranking method for eligible companies has been revised to give equal 50% weights to free-float-adjusted market capitalization and average daily traded value. This replaces the previous technique, which relied solely on average daily traded value for the final ranking. The approach is intended to support the inclusion of larger companies that maintain strong liquidity levels

For the EGX70 EWI, the stock market introduced a buffer rule to limit constituent turnover. Under the new rule, existing constituents that continue to meet the eligibility requirements will remain in the index as long as they rank among the top 85 companies, based on average daily traded value. The measure is designed to limit significant changes in the index’s composition.

The EGX33 Shariah index, which tracks the most Shariah-compliant companies among highly liquid stocks, will see changes involving two companies.

Meanwhile, the EGX35-LV index, which comprises highly liquid companies with the lowest price volatility, will undergo changes involving 13 companies.

EGX conducts semi-annual reviews of its indices at the beginning of March and September each year, with constituents reassessed according to the methodology applicable to each index.