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Opening of Egyptian Bourse postponed - again

The re-opening of the Egyptian stock exchange has been delayed until at least next week

Bassem Abou Alabass, Tuesday 15 Mar 2011
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“The date for the re-opening of the Egyptian Exchange has not been yet been set, and it is under cabinet control now” Sobhy Shehata, spokesman of the Egyptian Financial Supervisory Authority (EFSA), told Ahram Online.

There is much speculation from brokers and journalists that the closure of the exchange and the suspension of trading will last until the completion of the referendum for the new constitutional amendments.

Sobhy also commented about the resignation of Khaled Serry Syam from his post, saying, “He is still Chairman of the Bourse until the approval of the cabinet.”

Mohamed Abdel-Salam, the Chairman of Misr for Central Clearing, Depository and Registry also denied that the Egyptian Bourse would open either tomorrow or on Thursday, saying, “Maybe it will re-open next week.”

A fund worth LE 250 million ($42 million) has already been set up to offer loans to small investors who were involved in margin trading or who used credit.

"We are now in the process of discussing options with the Ministry of Finance to increase this amount but so far we have not succeeded," said Mohamed Abdel Salam, chairman of the exchange's Clearing, Settlement and Central Depository.

On Sunday, Prime Minister Essam Sharaf approved changing the rules of the country's Capital Markets Law in order to ease margin calls by brokerages, to limit volatility when the exchange opens.

When the client's debt reaches 70 per cent of the shares' value at the end of trading each day, brokerages will require investors to pay margins or present more collateral, the Egyptian Financial Supervisory Authority said on its website.

Brokers had previously been required to make margin calls at 60 per cent. Brokers can also now sell a client's shares when debt reaches 80 per cent of their value, instead of 70 per cent.

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