Egypt mulls gradual removal of circuit breakers as market ends positively

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CAIRO: Egypt’s EGX 30 index was up by 3.01 percent at the close of trading Tuesday, registering 5,409 points after opening at 5251.3.

Egypt’s broad EGX 100 index also ended in the green, closing up by 2.47 percent.

Selling was dominated by non-Arab foreigners and Arabs while Egyptians dominated the buying of stocks.

Acting bourse Chief Mohamed Abdel Salam said in press conference Tuesday that protective regulations governing Egypt’s stock exchange may be removed within the next few days.

The exchange had reduced trading hours and enforced circuit breakers and down-limits on stocks as protective measures after the bourse had been closed for nearly two months.

“We have a meeting today with the Egyptian Financial Supervisory Authority and we will make the final decision about reducing circuit breakers. Maybe we will not stop them all at once, but things will get back to normal step by step,” he said.

He explained that the bourse did not fully recover from the negative effects of the previous period, and pointed out that the 10 percent circuit breaker which halts trading for an arbitrary period was never used. He had previously said that the market will not close again.

“We only use the 5 percent regulations which call on the bourse to close for 30 minutes on the first day when the bourse fell 5 percent and another two days when it increased 5 percent,” he said.

Abdel Salam said that the reason for the bourse’s better performance is the confidence investors in the Egyptian market and the stocks listed, the positive message relayed in the media in last two weeks and the brokers who, according to him, dealt well with the panic of investors.

Lisa Anderson, president of the American University in Cairo (AUC), was invited as a guest in the opening of the session; along with Sherif Kamel, the dean of the school of business and some students who were allowed to ask the bourse chief questions.

Anderson said that she was very enthusiastic about the reopening of the stock market and its positive performance as this would create more opportunities for investors in Egypt in general and more opportunities for research about financial markets, in which AUC could contribute through its students and faculty.

Maha Gaber, a finance student at AUC who asked the bourse chief about short-selling regulations and why they have not yet been introduced to the market said she was optimistic after Abdel Salam assured her that the bourse is ready for such regulations which would be introduced soon, “when the time is right.”

Gaber added that the reforms and decisions regarding new regulations were slow due to “bureaucracy in the old government,” but hopes that the new government will be “more rapid” in making these decisions in the future.

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