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Closing price mechanism to be launched Thursday - Daily News Egypt

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Closing price mechanism to be launched Thursday

The Egyptian Stock Exchange (EGX) will implement a new closing price mechanism on Thursday. Egypt’s financial watchdog, the Egyptian Financial Supervisory Authority (EFSA), approved the new regulations for changing stocks’ closing prices, as suggested by EGX board of directors, on 28 August in an effort to impose more discipline over trading operations. The new regulations …


The Egyptian Stock Exchange (EGX) will implement a new closing price mechanism on Thursday.

Egypt’s financial watchdog, the Egyptian Financial Supervisory Authority (EFSA), approved the new regulations for changing stocks’ closing prices, as suggested by EGX board of directors, on 28 August in an effort to impose more discipline over trading operations.

The new regulations stipulate that in order for a stock’s closing price to change, the number of shares traded should not be less than 0.5 percent of the stock’s average daily turnover within the last three months and the share’s value should not be less than EGP 10,000, or the equivalent in foreign currency.

The new regulations also stipulate that any private transactions between investment companies are to be excluded from determining the closing price. Inter-investment companies’ transactions are to be conducted on the “special transactions” display, not the “opening of the operations market (OPR)” display.

The implementation of the new closing price mechanism comes after the completion of the last primary update of the current trading software known as Xstream OMX, which will expedite the execution of orders.

Egyptian press reported Mohamed Omran, Chairman of EGX saying the implementation of the new closing price mechanism is part of EGX’s plans to boost infrastructure.

Closing price manipulation has been a persistent problem, according to EGX brokers. There have been complaints over stock closing prices not representing patterns of supply and demand of trading operations.

Mohamed Kamal from AT brokerage said, “enforcing a closing price mechanism will have a positive impact on investors including foreign investors. Trading operations beforehand were plagued by a great deal of chaos, stemming from an absence of adequate regulatory mechanisms.”

 

 

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https://dailyfeed.dailynewsegypt.com/2012/09/30/closing-price-mechanism-to-be-launched-thursday/
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