Circuit Breakers in Place for Big Egypt Losses
The Egyptian stock exchange is prepared for big intraday moves with circuit breakers, but a period of sustained losses is anticipated, according to the market's new chairman, Mohamed Abdelsalam.
To curb big swings, the trading day will be reduced to three hours from four hours and circuit breakers will kick in and stop trading for 30 minutes if stocks move 5 percent in either direction, Abdelsalam told CNBC Tuesday.
If stocks move 10 percent, trading will close for the rest of the session.
"We expect that the prices will go down for some time because the number of people who want to sell stocks is increasing day after day," Abdelsalam said.
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"It think it's possible that the prices will go down for some time and then it will be back again to the normal prices of the market … especially when prices are very attractive … for foreign, professional investors who know, exactly, the real value of stocks," he added.
Egypt's stock exchange will re-open Wednesday after being closed for more than seven weeks, a spokesman for the exchange said on Monday as the country's new Prime Minister accepted the resignation of the exchange's chairman. (Read more here)
