Seeking to revive interest in the Cairo and Alexandria Stock Exchange (CASE), Egyptian authorities plan to issue new trading regulations, starting July 29. The CASE reform plan was introduced following a trading slump witnessed over the past year, as local economic difficulties and regional instability took their toll on the burse.
As part of the reform program, the burse management will lift the five percent limit on the daily price movements of the market’s most active liquid stocks. All brokers will be alerted in case the difference between the Volume Weighted Average Price (VWAP) of a stock and its opening price exceeds five percent. If the VWAP change continues to rise, trading on the stock will be halted for a predetermined period of time.
In addition, a new credit system is currently being considered, that will provide individual investors with a credit facility that will allow them to settle 50 percent of their trade upfront, instead of paying the full amount. Tougher market disclosure and listing guidelines are also under consideration, aiming to improve investor confidence and increase transparency.
The 12 stocks currently listed for trading without a five percent variant limit include the Egyptian Company for Mobile Services, Orascom Telecom, Orascom Construction Industries, Egyptian Media Production City, Commercial International Bank, Suez Cement, Misr International Bank, Egyptian American Bank, Nasr City Housing, Paints and Chemical Industries, Watany Bank of Egypt, Export Development Bank of Egypt.
CASE experienced a 37 percent fall last year, making its performance the worst in the Arab world, according to the Federation of Arab Banks. Established over a century ago, Egypt's Stock Exchange is comprised of two exchanges, Cairo and Alexandria, both of which are governed by the same board of directors and share the same trading, clearing and settlement systems. The number of companies listed on the stock exchange reached 1,136 at the end of June 2002, up from 833 back in 1998. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
