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Egypt stock exchange wary of reopening

Wednesday 23 February 2011 - by Andrew Hickley

The Egyptian stock exchange has asked for patience as it remains shut to combat potential money laundering and market volatility, in the wake of the toppling of Hosni Mubarak.

In a statement posted on Wednesday, the EGX said that it needed to ensure that businessmen and former ministers blacklisted by Egypt's general prosecutor would not be able to smuggle money out via the exchange.

The statement follows an announcement on Sunday, which claimed that a number of measures would be necessary to mitigate high trading volatility and ease the negative impact on retail investors using brokers.

Frustrations over the delay in reopening the exchange, which has been closed since January 27, have been exacerbated by the reopening of banks since Sunday. While the EGX has given no precise date on its return, the statement said that it would reopen "as soon as possible".

"EFSA [Egyptian Financial Supervisory Authority] and EGX will be more diligent to ensure that the trades done by offshore funds that are incorporated in less regulated markets do not involve any banned names by the General Prosecutor since their cash, equity and bonds holdings are already frozen on the domestic market," the statement reads.


The exchange said that trading hours on the first week of its return will run from 10:30 until 13:30, with circuit breakers to be introduced and features such as margin trading and credit purchases suspended.

"We trust that our stakeholders would understand that we are taking those unprecedented measures in a very difficult period in order to ensure that panic is reduced," Wednesday's statement continued.

"EGX management is confident that when the overall political and economic situation becomes stable, we will be lifting those measures and returning to our normal course of doing business."


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READERS' COMMENTS
2011-02-24 12:27:23 | Anonymous
Tunis opened in two weeks.. this is really bad for the long term credibility of the market

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