Egypt regulator sets rules for index, real estate funds

Egypt's financial market regulator, seeking to attract capital back to the stock market, has released rules to facilitate the creation of index and real estate funds as well as amendments to margin trading rules.

Sherif Samy, head of the Egyptian Financial Supervisory Authority, said the changes would increase liquidity in the market and draw more local and foreign investors.

The main stock market index has soared 63 percent since early July last year, surpassing its level before Egypt's 2011 revolution. But the buying has been led by individual investors; many local and foreign institutions remain cautious after years of economic and political turmoil.

Index funds, which seek to track the movements of a market index, are less risky than other funds because they invest across the market and are not based on a single fund manager's view, Samy said. Also, they tend to involve lower costs.

"We plan to launch Egypt's first index fund in April," Samy said, adding that such funds would support the development of market makers - dealers who stand ready to buy and sell stocks in order to ensure liquidity - within Egypt's market.