What happened to Egypt's stock market last week was nothing short of a tsunami. The acute and erratic fall and rise was triggered by rumors involving a murder mystery that maliciously pointed to an Egyptian construction guru (with absolutely no proof) accusing him of fleeing the country. On Sunday, Talaat Moustafa Group's stock traded 14 percent lower and brokers told the press that investors were selling the stock at any price even after a company statement confirmed that Moustafa was back to work in Egypt. By Wednesday, according to a report which ran in this newspaper, Egyptian stock prices continued to erode, with the benchmark CASE 30 index sliding 4.9 percent to 7,850.03 points. Orascom Construction Industries had also dipped about 7 percent, followed by a 6.6 plunge in the share price of Commercial International Bank, all of which reportedly led to protests by 30 or so angry investors demanding the resignation of CASE 30 chairman Maged Shawki. "The slump marked the blackest day in an already dark week for the CASE, as a slide which one analyst privately called a 'panic attack' showed no sign of letting up, the report said, attributing the root of the crash to foreign selling, high inflation and high interest rates. Hiked gas prices in May, other analysts said, have vexed investors and led to skepticism about the Egyptian market. But then again by the next day, Thursday, the stock index ended its five-day losing streak to post the biggest single day rise in two years, according to Reuters data, with a 4.8 percent jump. The numbers may not mean much to most people, but as experts have explained on numerous talk shows, the stock market is the prime indicator of an ailing or healthy economy. As Prince Abbas Helmi, one of the founders of Concorde Group for asset management, told this paper in an exclusive interview on Thursday, "one of the characteristics of the Egyptian market is that it is roughly 60 percent individuals and 40 percent institutions, which shows that it's not a very mature market . a lot of these individuals have a very trading mentality, and so the market becomes more volatile. Individuals are more likely to be swayed by moods, they all get scared, so they all get out of the market, and they might miss the market when it's cheap, so they take losses. Professionals do the opposite. This brings us to the strange synergy between rumors, the Egyptian economy, the media and national security. When rumors began to spiral out of control, the effect on the share price of TMG stock was immediately visible. Whether or not the downward spiral that followed in the stock market over the next few days was directly related to that incident, it's hard to tell. It's also difficult to account for the miraculous jump that immediately restored order in the CASE merely one day later. What we can do, however, is try to connect the dots between the media and the stock market and in turn the health of the economy, which in Egypt, is an issue of national security. Rumors surrounding the murder of Lebanese singer Suzanne Tamim, citing the arrest of a former police officer who claimed having received $2 million from a prominent Egyptian businessman to kill her, prompted Egypt's Prosecutor General Abdel Meguid Mahmoud to impose a publishing ban on the case. Coupled with several appearances by the targeted businessman on national television, it seems that the ban may have been necessary considering the immediate and destructive effect the rumor has had on the Egyptian bourse. Although several columnists in the local press condemned the ban as a means of gagging the press, with others interpreting it as a reflection of how businessmen have become immune to public scrutiny, supported as they are by a regime that whitewashes, shields and absolves them of responsibility, having observed the disastrous effects on the stock market, I personally embrace the ban. A published statement is defamatory, according to British media law, for instance, if it exposes the person to hatred ridicule or contempt, causes him to be shunned and avoided, lowers him in the estimation of right-thinking members of society generally or disparages him in his business, trade, office or profession - all of which have certainly taken place in this case. With no charges leveled against him and with the investigation still underway, any published articles implying his involvement in this crime would be considered defamatory in a court of law. British law goes even further by taking journalists and publications to task for merely reporting on defamatory rumors even if the paper clearly states that it does not believe them, since the law takes into consideration that ordinary people reading the story may take the view "there is no smoke without fire. Backtrack to August 2007 and to the case against Al-Dostour editor Ibrahim Eissa. Known as the "president's health case, a court in March upheld the prosecution's claims that articles published in Al-Dostour in August last year, which alleged that Egypt's President Mubarak is in ill health, had a detrimental effect on the country's economy. Eissa was accused of "publishing false information of a nature to disturb public order or security. However, during a hearing in June, prosecution witnesses, including media experts, were loath to testify against Eissa, highlighting the fact that journalistic codes of ethics held the public interest as its highest value and that public figures should not be immune to the piercing gaze of the media, especially when the public figure is the president whose health state is of ultimate public interest. And when the prosecution again alleged that following the publication of the articles between August 27 and 30, $350 million was withdrawn from the Egyptian stock exchange, the defense reminded the court that even prosecution witnesses had rejected the possibility of them influencing stock market activity during earlier court sessions. Indeed, nothing even remotely close to what happened last week was felt or reported over the course of the past eleven months, as analysts have said. In fact an article published on Egypt's State Information Service website on Sept. 20, 2007 said: "With record levels of FDI, the balance of payments recorded a surplus of $5.3 billion in 2006/2007, bringing official reserves to $30 billion by end the of August 2007, equivalent to more than 6 months of imports of goods and services. It's hard to ignore the analogy between the two situations, but if anything, last week's stock market hurricane is proof that Eissa is the victim of trumped up charges to settle political scores. As for the current publishing ban, one is inclined to believe that it may actually be in the public interest - who says the media's role is to throw the baby out with the bath water? Rania Al Malky is the Chief Editor of Daily News Egypt.
