Egypt Bourse to Reopen Wednesday

Reuters

Egypt's stock exchange, closed since Jan. 27 because of political unrest, will reopen for trade on Wednesday under a new acting chairman, the cabinet said.

The reopening has been postponed several times in recent weeks and investment bankers have warned that the delays were damaging Egypt's international reputation.

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The government has been reluctant to restart trade until compensation was arranged for small investors caught out by falling share prices and safeguards put in place to prevent anyone under investigation from shifting funds abroad.

Officials in several of the biggest listed companies have had their assets blocked or been charged with crimes as the government investigates alleged corruption under the old government.Prime Minister Essam Sharaf appointed Mohamed Abdel Salam, chairman of Egypt's depositary agency, to act as bourse chairman for six months starting immediately, the cabinet said on Monday in a faxed statement.

"The prime minister calls on citizens to participate in a positive way after the opening of the stock exchange," the cabinet statement said.

The bourse's previous chairman, Khaled Serry Seyam, had resigned from his position, a stock exchange official said.

The exchange's benchmark index .EGX30 plunged 16 percent in the two days the exchange was open after anti-Mubarak protests erupted on Jan. 25. Investment bank CI Capital forecast in a note issued on Thursday that it could fall by another 19 to 29 percent once the bourse reopened.

"We believe the EGX 30 is likely to fall to within a range of about 4,582 to 3,989 upon its re-opening," CI Capital said.

The EGX30 closed on Jan. 27 at 5,646 points.

The exchange has said it will suspend trade for a half hour if the index declines by 3 percent and for the remainder of the session if it falls by 6 percent.

It will also suspend trade for a half hour if the broader 100-share index declines by 5 percent and for the entire session if it falls by 10 percent.

Egypt's economy nearly ground to a halt during the protests that toppled the government of Hosni Mubarak. Some of its main sources of foreign exchange, including tourism and foreign investment, have collapsed, and many factories continue to operate below capacity.

MSCI had warned that Egypt risked exclusion from its emerging markets index if the exchange it did not reopen by March 24.