Egypt’s stock exchange will not implement additional precautionary measures as a result of upcoming protests scheduled for June 30th, according to Stock Market Chairman Mohamed Omran. He further rejected the option of shutting down trade all together on that date.
Trading on June 30th will take place as normal he said, during previously scheduled hours under the same rules and regulations that apply on all other days. He stated that stock market officials were content with measures already put in place, and would not seek to implement more.
Officials working at the Egyptian stock exchange have already implemented a series of 12 separate precautionary policies since 23 March 2011 when the stock market was closed for a period of 55 days as a result of the outbreak of the 25 January revolution. Some of these policies have gradually begun to be reversed, such as allowing trading to take place for 4 hours a day instead of 3 and allowing buying and selling to occur during the same session, in addition to repealing measures previously applied to brokerage firms. Other precautionary policies implemented include the imposition of 5% restrictions on the movement of stocks and indicators.
Regarding speculation that Egypt’s stock exchange may close on 30 June for the planned protests, Omran stated that no stock market in the world has ever shut down its operations due to the expected outbreak of political demonstrations. He said that as long as bank’s technical infrastructures remained in place that any such protests would not have an effect on stock trading.
He labelled calls to place additional restrictions on stock and share movements as, “illogical”, pointing out that Morgan Stanley in a recently released report stated that it was closely monitoring the freedom with which investors were allowed to pull out and remove their funds from Egypt’s stock exchange, as a measure of the strength of the market itself.
Omran questioned how such an institution can one day call for investors to operate with increased freedom, and then on the next day demand that additional restrictions be placed on stock movements. He pointed out that Egypt’s stock market had already previously taken to imposing price caps on share speculation, a move which elicited strong criticism from investors and financial analysts, claiming that the freedom of stock movement was being restricted.
He stated that the market’s current rate in trade had reached its lowest level in years, a fact which he said pointed to a decreased desire to sell, and increased conservatism amongst buyers. He called on all investors operating on Egypt’s stock exchange to learn and benefit from the mistakes of the past, which he claimed were worse than that currently seen in Egypt now.
Translated from Al-Borsa newspaper