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Egypt stock exchange meltdown after short suspension of trading

Amid mass protests, temporary suspension of trading fails to rescue the stock market from a sharp drop

Salma Hussein, Thursday 27 Jan 2011
egyption bourse
(Photo: AP)
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Egypt's stock exchange suspended trading temporarily on Thursday after a sharp drop, amid the country's largest anti-government protests in three decades.

The half-hour suspension came after the benchmark EGX 30 index dropped 6.2 per cent, just one day after recording another fall of six per cent.

Trading resumed at 11:30 am (0930 GMT), but the index continued to record falls.

"Suspension is not a proper solution," lamented Walaa Hazem, vice president at HC's asset management division. "It only dragged it (the index) down further," he added, referring to the 10.8 per cent decline that the market witnessed by 12.30.

Hazem then referred to fears of the Tunisia scenario spreading to Egypt. Rumors spread yesterday that several big tycoons fled the country. "No one knows anything. Uncertainty is the name of the game. It spreads panic among traders," commented Hazem.

The jitters on the market come amid the most serious anti-government demonstrations in Egypt in decades. Six people have died in the protests against the regime, which, inspired by the ground-breaking 'Jasmine Revolution' in Tunisia, have sent shockwaves across the region and prompted Washington to prod its long-time ally on democratic reforms.

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