Protection measures for Egyptian bourse stay next week, says financial authority

Ahram Online, Saturday 16 Apr 2011

Egypt's financial services regulatory body has said that extraordinary safeguards will remain in place in the Egyptian stock market for at least one more week

Egypt to postpone lifting exceptional measures governing trading inside the Bourse (Mohamed Abd El-Ghany/REUTERS)

The Egyptian Financial Services Authority (EFSA) has delayed a decision to cancel exceptional measures currently implemented on the stock market, sources inside EFSA told Ahram Online.

Sources revealed that the Egyptian bourse will continue working according to the precautionary measures until Egypt regains its political stability and the stock market revives its normal activity, adding that some of the measures might be cancelled during this trading week if the market fares better.  

Measures introduced by EFSA before the reopening of the bourse on 23 March include the reduction of the trading day to three hours, the placing of "circuit breakers" to temporarily freeze trading in the event of strong upward or downward movement of key indexes, and cancelling the posting of normal pre-session exploratory prices before trade opens.

Trading on stocks is also carried on within the pre-set price range, to be halted for a half hour in case of a five per cent change in value. A 10 per cent change in value also warrants a fixing of the price of that stock until the end of the session. Also, the minimum capital requirement for brokerage firms has been reduced from 10 per cent to five per cent.

Mass protests that erupted in January leading to the ouster of former president Hosni Mubarak prompted a shutdown in the market that lasted seven weeks.

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