CAIRO: The Egyptian stock exchange’s broad index EGX 100 dropped 0.7 percent lower by mid-session on Thursday, the second day of trade since political unrest closed the bourse in January.
Brokers said the decline in share prices was less than forecast. The index rebounded from lows early in Thursday’s session, when a 5.5 percent decline prompted the exchange to suspend trade under circuit breaker rules.
Under the rules, trading is suspended for half an hour if the broad index falls 5 percent. Other circuit breakers prevent the price of any single stock from falling more than 10 percent a day.
"I’ve seen more buy orders than expected. There seems to be positive sentiment," said Osama Mourad of Arab Finance Brokerage.
Orascom Telecom and Mobinil both jumped 10 percent, while Telecom Egypt rose 7.4 percent and Orascom Construction 5.2 percent.
On Wednesday, the exchange’s first day of trade since Jan. 27, the index plummeted by 8.95 percent.
The acting chairman of the exchange, Mohamed Abdel Salam, urged investors to buy shares in an interview on state television: "I advised others who have liquidity that crises create billions. If you have any liquidity, hurry, choose and buy. Those who want to invest, grab your chance before the market rises. The market is very promising."
A sell-off by foreign investors could also put renewed pressure on the currency, but bankers said that because it takes two days to settle stock exchange trades, any increase in cash flows out of the country would not be felt until Monday.
The pound traded as weak as 5.9605 to the dollar on Thursday, a six-year low.
Index provider MSCI said on Thursday it would consult with investors on the function and accessibility of the Egyptian stock exchange now that the market had reopened.
MSCI had warned Egypt that it could be moved from its emerging markets index if the exchange did not reopen. Last week it said the country could still be removed from the index if trading was frequently interrupted or restricted by price floors.
The benchmark index EGX 30 was trading 4.2 percent lower at 10:30 GMT.
