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Precautionary measures on Egypt bourse to be removed, stocks head down

Limits on stock price movement to be extended from 5 to 10 percent after Ramadan, financial watchdogs announce

Ahram Online , Tuesday 24 Jun 2014
Egypt
File Photo: Egypt's stock exchange will be closed today, following violent clashes in which hundreds will killed. (Photo: Reuters)
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Egypt's financial watchdogs have decided to remove the remaining precautionary measures that have been imposed on trading on the stock exchange since its reopening in March 2011, a joint statement by the Egyptian Bourse and the Egyptian Financial Supervisory Authority (EFSA) said.

According to the statement, the deactivation of emergency measures will be made after Eid Al-Fitr – the holiday that follows the holy fasting month of Ramadan – as the state is witnessing improved political and security stability.

Price change limits of listed shares during trading will rise from five to ten percent, accordingly trading on those shares will be halted for half an hour and once resumed the limit will be extended to twenty percent, Eissa Fathy, the vice head of the securities division at the Cairo Chamber of Commerce, told Ahram Online.

"The restriction on price limits for small and medium stocks (Nile Bourse) will remain," said the statement.

Also, pre-session "exploratory trading" will be resumed after a three-year suspension, under which investors will be able to receive and send offers to help set share prices before official trading starts.

Trading hours are recommended to be increased from the current four-hour session (10:30am to 2:30pm), depending on performance levels.

Among measures that have already been lifted over the past three years are a reduction of trading time from four to three hours and the suspension of same-day trading.

By mid-Tuesday trading, the market's main and broader indices, EGX30 and EGX70, had slipped 0.7 percent and 0.3 percent respectively.

"The news hasn't impacted investors as they are focusing on the critical situation in Iraq which is prompting fears of a Gulf crisis," Fathy added.

Out of 124 are currently listed stocks, 81 are heading down and only 21 are inching up.

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