Egypt bourse to restart same-day trading
Cairo, April 4, 2013
Egypt's stock exchange will reinstate the buying and selling of single stocks in the same session from the first week of next month in an effort to boost market volumes.
The ability to buy and sell a stock in the same session was stopped in February 2011 after the popular uprising that swept autocratic President Hosni Mubarak from power.
The head of the Egyptian Financial Supervisory Authority, Ashraf El Sharkawy, said the move would increase the number of transactions by between 30 percent and 40 percent and help to alleviate "huge liquidity problems" on the exchange.
Political instability in the two years since the revolution has led to an economic crisis in the most populous Arab country.
Foreign currency reserves have fallen to critically low levels, threatening Egypt's ability to buy in supplies of fuel as well as wheat, of which it is the world's biggest importer.
Sharkawy said the stock exchange is seeking to attract new companies to improve the investment climate.
The Cairo bourse fell to a 2013 low on Wednesday as foreign investors sold stocks on fears that the Egyptian pound, which has fallen sharply against the dollar on the black market in recent days, would be devalued further.
The currency's slide in unofficial trading came as an International Monetary Fund delegation resumed long-delayed talks on a $4.8 billion loan agreement with Egypt. The government says it expects a deal within two weeks.
Cairo's benchmark index dropped 2.2 percent to 4,926 points, its lowest level since Dec. 6. The breaching of the psychologically critical 5,000 level also sparked selling by investors who follow technical indicators.
The stock market has been hit by a series of sharp falls over the past two years after many Mubarak-era businessmen and officials in top listed companies were either jailed or placed under investigation after corruption allegations.
It suffered another jolt last month, when the prosecutor general issued a travel ban on the CEO of Orascom Construction Industries, the biggest company on the exchange, as part of an investigation into tax evasion.
Orascom Telecom Holding, meanwhile, could leave the Egyptian market this year if a takeover bid by a subsidiary of Russian billionaire Mikhail Fridman's Altimo proves successful.
In February Egypt's regulator approved an offer by Qatar National Bank to acquire Cairo's National Societe Generale Bank. – Reuters