Egypt’s capital market is preparing for the next phase of its derivatives journey, with the Egyptian Exchange (EGX) set to launch single-stock futures contracts on June 18, expanding the range of risk-management tools available to investors and advancing the market’s broader modernization agenda.
The rollout follows the March 1 introduction of EGX30 index futures, which marked the exchange’s first foray into derivatives trading. The upcoming expansion shifts the focus from broad market exposure to individual companies, allowing investors to hedge positions in specific stocks without liquidating their underlying holdings.
“The problem with our market was that there was no way to hedge; investors didn’t have any tool to hedge against risk. It was a one-way market: you just buy,” explained Randa Hamed, Managing Director and Board Member at OKAZ Asset Management. “These derivatives contracts will give them the tools to actually profit and hedge against the risks of an emerging market.”
According to an official EGX press release issued on June 8, trading in single-stock futures contracts will begin at the start of the Thursday, June 18 trading session. The launch also represents an early milestone under the leadership of EGX Executive Chairman Omar Radwan, who assumed the role earlier this spring.
Starting with two market heavyweights
The first contracts will be linked to two of the exchange’s most actively traded stocks: Commercial International Bank (CIB), Egypt’s largest private-sector bank and one of the benchmark index’s heaviest constituents, and Talaat Moustafa Group Holding (TMG), one of the country’s largest real estate and hospitality developers.
The exchange will offer standard three-month and six-month maturities, with each futures contract representing 100 underlying shares.
The choice of the two companies reflects their dominant position in market activity. According to an official EGX report covering May trading metrics, CIB and TMG collectively accounted for nearly 13% of total turnover in listed stocks during the month. CIB topped the market with EGP 10.4 billion ($207.9 million) in trading volume, representing 6.6% of total turnover, while TMG recorded EGP 9.7 billion ($193.9 million), accounting for 6.3%.
Hamed noted that the EGX made the right choice by selecting the two equities with the most liquidity and volume to test the waters.
Expanding risk-management tools
The introduction of single-stock futures comes as investors increasingly seek ways to manage exposure to individual sectors and companies amid heightened regional and global uncertainty.
While Hamed anticipates a “wait and see” approach in the short term due to global geopolitical instability, she emphasized that in the medium to long term, the futures will be a critical draw for foreign investment. “It will attract a lot of investors, especially foreign investors and funds that already use derivatives to hedge against risks,” she stated.
Hamed also dispelled concerns that the new tools could increase market speculation. Because the futures will initially be restricted to qualified investors and asset managers with sufficient financial solvency—rather than retail day traders—the mechanism is designed for stability.
“For everyone selling, there is someone buying, so support emerges in the market,” Hamed explained, noting that foreign markets utilizing derivatives typically experience less severe fluctuations than the EGX currently does.
In a previous interview with Business Monthly regarding the derivatives framework, Khaled Amer, Managing Director of Taswyaat, the EGX’s futures clearing arm, echoed this sentiment. Amer noted that the infrastructure upgrade acts as a vital shield against regional macroeconomic turbulence, giving institutional players the capacity to hedge specific corporate exposures without being forced to disruptively liquidate their underlying spot positions.
Building market infrastructure
The expansion of derivatives trading has been accompanied by the development of supporting infrastructure designed to safeguard market stability. According to the June 8 release, the launch follows extensive coordination with the Financial Regulatory Authority (FRA), which approved the contract specifications.
Trades will be cleared through the Central Counterparty (CCP) system operated by Taswyaat, utilizing real-time margin requirements, continuous monitoring mechanisms, and a structured default fund aimed at mitigating counterparty risk. As Mohamed Sabry, Vice Chairman of the EGX, previously told Business Monthly, international experience shows that well-regulated derivatives markets can contribute to greater liquidity and more efficient price discovery.
On the brokerage side, institutional readiness is already high. Hamed pointed out that asset managers have been preparing for these tools for quite some time, with foundational training dating back to former EGX Chairman Dr. Islam Azzam’s tenure. Currently, organizations like the Egyptian Securities Federation are actively hosting specialized sessions with industry experts to ensure market participants are fully equipped.
Looking ahead
Despite the traditionally slower summer trading season, market experts view the June launch favorably. Hamed noted that introducing the contracts during a quieter period allows the market to adjust naturally without overwhelming traffic. “It will take time, but it will build up, and we’re not in a hurry. It’s better to have something than to have nothing,” she said.
Looking forward, the successful expansion of single-stock futures to other equities will rely heavily on the introduction of designated market makers.
Hamed stressed that bringing in well-capitalized market makers—likely large firms meeting FRA capital criteria of EGP 100 million to EGP 150 million ($2 million to $3 million) is essential so that liquidity does not remain trapped exclusively in CIB and TMG. Once established, she anticipates the derivatives framework could expand to other highly liquid stocks in the telecommunications, construction, and housing sectors, citing companies such as Telecom Egypt, Abu Qir Fertilizers, Madinet Masr, and Heliopolis Housing as logical future candidates.
