The Egyptian Exchange (EGX) will start trading on the first exchange traded fund (ETF) on EGX 30 index in the Egyptian market on Wednesday, January 14, 2015.

Mohammed Omran, EGX chairman, said that local and foreign investors will be able to achieve diversity in their portfolios at a lower cost and with higher efficiency.

“The advantage that this new investment tool will add is that it will help to attract new categories of investors who wish to invest in the Egyptian market. Investors will be able to invest in 30 shares at once through an accessible manner and at a lower cost.”

The introduction of ETFs will also allow for the emergence of market-makers in Egypt, potentially boosting liquidity.

“I see that the Egyptian market is progressing and moving confidently with a clear strategy to achieve further development and efficiency in the trading environment in accordance with the set objectives,” said Omran.

“The ETFs launch has included the launch of a new mechanism for the Egyptian market, which is the market maker, that would contribute greatly to increase the liquidity levels in the market,” he added.

The EGX listing committee approved the listing of ETFs at a total value of 10 million EGP ($1.4m) divided into 1 million certificates of 10 EGP each, according to EGX.

In April, the EGX granted Beltone Financial Holding Company a license for establishing XT-MISR—the first ETF in Egypt—through the main EGX index EGX30.

The EGX is expected to list 10 new companies during the first half of 2015, according to Omran.

The Egyptian market posted the best returns among the major single-country equity markets for the year.

The S&P Egypt BMI delivered a total return of 29% in 2014.