Egypt May Announce Bourse Opening Date Today After Fund Rule
Egyptian authorities may announce this evening when the country’s stock exchange will open after more than a month-long closure because of a revolt that toppled President Hosni Mubarak in February.
The stock market has been closed since the end of trading Jan. 27 after the benchmark EGX 30 Index (EGX30) plunged 16 percent that week amid the uprising. The Egyptian Financial Supervisory Authority, the market regulator, said yesterday it got the cabinet’s approval to tap up to 30 percent of an 850 million- pound ($143 million) fund to stabilize the market and provide loans to brokerages.
The regulator, the bourse and the state-run clearing house will meet this evening in Cairo to decide “on the mechanism to implement the cabinet decision to support small investors and a date to reopen,” exchange spokesman Hisham Turk said by telephone. Asked if the announcement was due today, he said: “Hopefully. The issue isn’t the reopening date, it’s how to implement the cabinet decision.” Finance Minister Samir Radwan confirmed the planned meeting.
“The opening of the stock market even if it was to fall for a while will give a semblance of normality,” said Angus Blair, head of research at Cairo-based investment bank Beltone Financial. “Get it over and done with, and the markets can find its new levels. Egypt is still the most transparent and best known market” in the region, he said.
Cabinet spokesman Magdy Rady said earlier in a telephone interview authorities would announce the date for the resumption of trading today. Rady couldn’t confirm a report by Al Arabiya television that Egyptian Exchange Chairman Khaled Seyam has resigned. Seyam didn’t answer several calls made to his mobile phone seeking comment.
The regulator, in an attempt to mitigate a possible sell- off when the bourse resumes operations, said on March 12 that it has eased rules for margin trading.
Brokerages now will require investors to pay margins or present more collateral when the client’s debt reaches 70 percent of the shares’ value at the end of daily trading, the agency, known as Efsa, said in a statement on its website. Brokerages were allowed to make margin calls at 60 percent earlier.
The margin trading rules apply to shares bought previously, Mohamed Abdel Salam, chairman of clearing house Misr for Central Clearing, Depository & Registry, said yesterday.
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