Stock market to ease trading restrictions

In light of positive developments and stability in the market, the Egyptian Stock Exchange, in coordination with the Egyptian Financial Supervisory Authority (EFSA), decided to lift precautionary measures put in place in 2011 following the January 25 uprising, it said in a statement Monday. 

Starting August 7, the stock market will go back to using the price discovery session, which means reinstating a 30-minute pre-trading session.

Most stocks will also be allowed to fluctuate by an additional 10 percent during regular trading hours, up from the five percent currently allowed. The Nile index will remain limited to five percent.

The stock can move by 10 percent in the pre-trading session, and another 10 percent in the regular session, the statement explained – which means the stock can move up and down by 21 percent within one day.

Nile index stocks can therefore also move by 10.25 percent in both sessions.

However, the levels are still well below the 40 percent fluctuation limit applied before 2011, Reuters pointed out.

Trading hours will also be extended following Ramadan to become four and a half hours, from 10 am until 2:30 pm, the statement said.

Since the 2011 revolution, the stock market has been suspended several times when political events have spooked traders. The precautionary measures were put in place in late March 2011 when the market reopened after a two-month closure.

The EFSA had suspended pre-trading and imposed tighter limits on daily share price moves as a result of the political unrest.

Mohamed Omran, chairman of the Egyptian Exchange, said that the current stability helped lift a number of precautionary measures, sending a clear message to investors that the Egyptian Exchange has recovered and things in Egypt are back to normal.

Omran said that acquisitions by foreign investors on Egyptian companies have increased over the past months.

He also expressed optimism that the coming period will witness a lot of attention on the capital market, which will require an increase in the trading hours.