How Dividends Are Paid on EGX Stocks
The full lifecycle of an Egyptian dividend — from board approval to your account
Declaration and Approval
A dividend begins with a recommendation from the board of directors, typically as part of full-year results. The recommendation is then put to shareholders at the annual general meeting (AGM), which formally approves the cash distribution, the stock dividend, or both.
Until the AGM approves the dividend, it is only a proposal — not a binding obligation. Forward dividend yields quoted before AGM approval should always be treated as estimates.
Key Dates to Know
After approval, the company sets three critical dates: the ex-dividend date (the first day the stock trades without the right to the dividend), the record date (the date on which MCDR identifies eligible shareholders), and the payment date (when cash is actually credited).
To receive a cash dividend, you must own the stock before the ex-dividend date — accounting for T+2 settlement. Buying on the ex-dividend day means you do not receive that distribution.
Withholding and Net Amount
Cash dividends from EGX-listed companies are subject to a withholding tax that the company deducts at source. You receive the net amount in your brokerage cash account on the payment date. No additional action is normally required from you.
The withholding rate has been adjusted by Egyptian finance laws over time and may differ for foreign investors covered by a double-taxation treaty. Confirm the current rate with your broker or tax advisor before assuming the headline gross yield.
Stock Dividends vs Cash Dividends
Some Egyptian companies distribute bonus shares (stock dividends) instead of, or in addition to, cash. Bonus shares increase your share count proportionally without changing your overall ownership percentage, and the share price typically adjusts down on the ex-date to reflect the dilution.
Bonus shares have different tax and accounting treatment from cash dividends. They are not 'free shares' in any meaningful sense — they are an arithmetic split of existing equity.
FAQ
When do I have to own the stock to get the dividend?
You must own the stock before the ex-dividend date. Because EGX settlement is T+2, you typically need to buy at least two business days before the record date to ensure you are listed as the owner of record at MCDR.
Are dividends paid in EGP only?
Cash dividends from EGX-listed companies are paid in Egyptian pounds. If you hold the stock through a foreign custodian or in a USD-denominated account, your custodian may convert the EGP dividend to your account currency at the prevailing rate.
Do all EGX companies pay dividends?
No. Many large, mature Egyptian companies (banks, consumer staples, telecom) pay regular dividends; growth-stage and smaller companies often retain earnings for reinvestment. Always check the dividend history before relying on a yield assumption.