Egypt stocks open strong, triggering market halt
Sunday, March 27, 2011
CAIRO (AP) — Egypt's stock exchange surged by about 5 percent early Sunday as investors previously cautious about its nearly two-month closure returned to the market and began reversing the earlier losses.
The broader EGX100 index traded up almost 5.1 percent within five minutes of the market's opening, forcing the suspension of trading for 30 minutes in a pattern repeated since the Egyptian Exchange resumed operations on Wednesday.
The exchange had been shuttered since Jan. 27, just two days after the mass protests that eventually forced President Hosni Mubarak from power began. It had fallen over 16 percent before closing down, and on its first day back in business, the benchmark EGX30 index closed down almost 9 percent, and fell another roughly 3.7 percent the following day.
On both those days, trading was suspended within minutes of the market's opening.
But individual investors who had largely stood on the sidelines last week, stepped back in the market, while institutional investors were seen the still selling, though at lower volumes than before, traders said.
"The buyers are mainly Egyptians and (Gulf) Arabs," said Khaled Naga, a broker with Mega Investments who on Thursday had predicted that most shares could move back into the black after spending the first two days of the market's reopening trading at or near their 10 percent limit down.
"The last couple of days were not surprising," said Naga. "Even if there's a correction tomorrow, it's not worrying. Things are stabilizing now."
The EGX30 was trading up almost 5 percent, to 5,198 points, by 11:15 a.m. local time, according to the Egyptian Exchange's Web site. The EGX100 was up almost 7 percent.
Gains were registered across almost all sectors, with many shares trading at or near their 10 percent upper limit. Mobile phone service provider Mobinil was up 9.9 percent, at 136.91 pounds, according to Zawya.com, a financial data provider.
Electronics manufacturer Olympic Group was up the same, trading at 32.92 pounds, while Commercial International Bank, the country's largest lender, was up 7.3 percent at 3.93 pounds.
Shares of several companies are still suspended from trading by exchange officials because they have yet to either provide their financial reports, or have provided incomplete reports to bourse officials.
The suspension stems from investigations by prosecutors into former regime officials and businessmen with links to the government. Egyptian officials want to make sure that individuals who have had their assets frozen are unable to liquidate their holdings in companies.
A number of companies have been buying back shares to shore up the value of their stocks.