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Tuesday, 20 April 2021

Beltone on board to manage CBE margin trading support fund?

The Central Bank of Egypt (CBE) has reportedly tapped Beltone Financial to manage a new margin trading fund with a preliminary allocation of EGP 1 bn that will be deployed to support margin lending through brokerages, Al Mal reports, quoting what it says are sources in the know. The fund will give brokerages access to financing at competitive rates under certain conditions the CBE is expected to announce at a later date, the sources said. It was announced last month in a bid to boost trading volumes on the EGX, and its initial EGP 1 bn capital is expected to increase periodically when needed, CBE Deputy Governor Rami Aboul Naga said at the time.

The fund is part of a series of recent moves by regulators to boost activity on the bourse, and draws from a larger EGP 20 bn allocation the CBE set aside to support the exchange at the onset of the pandemic in March. It follows decisions by the Financial Regulatory Authority earlier this year to allow fund managers and non-bank firms to finance brokerages engaging in margin trading. The FRA has also proposed measures that would put a cap on the practice, to mitigate the risk of a boom in investing borrowed funds on the EGX.

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