The EGX could move to slash the cost of the electronic system needed to short sell on the bourse if brokerages request a lower price tag, EGX Chairman Mohamed Farid said.
The EGX has not, however, received any complaints from brokerages about the cost of the system, Farid said at the presser, in which he recapped the bourse’s year-end report
Reports in the local press in 2019 had suggested that brokerage firms voiced concerns to the Financial Regulatory Authority that they would be unable to fork out the USD 9,500 (EGP 153k) required for the system. The reports had indicated that EGX officials were working with their software developers at the time to reduce the price.
Background: Short selling was launched on the EGX at the end of 2019 but has had a lackluster year since.
In the first four months of 2020, the bourse only saw “a handful” of short selling transactions worth EGP 100k, which Misr for Central Clearing, Depository, and Registry Managing Director Tarek Abdel Bari said at the time is anemic.
Abdel Bari had suggested the pandemic-induced equity sell-off at the beginning of last year was a golden chance for investors to book gains, but few took advantage. Some analysts had previously speculated that brokerages simply don’t understand how the short selling system operates.
