The new system of continuous share trading started on October 27.
The process is as follows: buy and sell orders are first entered in the computer system. A price fixing is determined at the opening but will not be considered in the calculated variation allowed during the trading session. A price fixing will be followed by two hours of continuous trading by open outcry, then a final price fixing is set for the closing price.
The maximum spread allowed per day, previously 5 percent, will be increased to 10 percent. If the stock has not been traded for more than 5 consecutive days, the spread will rise up to 15 percent, to 20 percent after the 10th day and to 25 percent after the 15th day.
The transactions completed by mutual agreement are subject to a maximum spread of 7 percent with a progression towards 14 percent, 21 percent and 28 percent. The minimum amount for continuous transaction is $2000.
The main objective of this innovation is to increase the liquidity of stocks and trading volumes by attracting investors.
Today, the average daily transaction amount is around $300,000 which is 85 percent to 90 percent lower than what it was during the boom of 1997 when it reached $2.5 million. — ( Banque Libano-Française Sal )