CAIRO: The Cairo and Alexandria Stock Exchange (CASE) slammed the brakes on Piraeus Bank Egypt’s stock during Monday’s session, when trading propelled the price past the 20 percent daily increase limit set by the exchange for its most active stocks.
The rush for Piraeus stock followed the Capital Market Authority’s notice that it had sanctioned a 25 percent boost for the bank’s issued capital, upping it to LE 1 billion.
The authority endorsed the increase last Thursday. During that day’s session, the bourse cancelled trades of Piraeus stock when some information about the decision leaked prematurely, according to Zawya.com, a Middle East business news site.
Last Sunday, the bank said it would issue 12.83 million new shares, bringing its total to over 64 million shares. It will offer them to current stakeholders at a par value of LE 15.58 per share, investment bank Beltone Financial reported.
Representatives at the CASE said the exchange suspended Piraeus trading on Monday because its share price triggered the “circuit breaker, or the trading limit put in place to ensure market stability.
Most CASE stocks are allowed to fluctuate by five percent in either direction before they are shut down, but a different set of rules apply to the most active 100. If these stocks gain or lose more than 10 percent, they are shut down for half an hour; if they breach 20 percent, they are suspended until the next session.
Piraeus traded as usual yesterday, continuing its climb to LE 40.5 per share, a rise of 13.5 percent. The stock’s ascension has contrasted with the broader market, as the benchmark CASE30 index slumped for four consecutive sessions, tumbling another 141 points to 10,592.95 yesterday.
Piraeus Egypt is a branch of the Piraeus Bank Group, a Greek firm with arms in Cyprus, the United States and a swath of Eastern European nations.
So far, the Egyptian branch has had a good year. Their profits more than septupled in the first quarter, up to LE 24.5 million from LE 2.9 million last year.
