Chairman of the Egyptian Financial Supervisory Authority (EFSA), Ashraf El-Sharqawy, approved new regulations for changing stocks' closing price, suggested by Egypt's Stock Exchange (ESE) board of directors, in order to stem closing price manipulations that delay trading operations. The new regulations stipulate that in order to change a stocks' closing price, the number of shares to be traded should not be less than 0.5 percent of the stock's average daily turnover within a period of three months and that the shares' value should not be less than EGP 10,000 or the equivalent in foreign currencies. 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. Hani Mahmud, Chief Executive of Blom Bank, stated that the main goal of these new regulations is to have a closing price that truly represents the reality of the market. “The recently enacted closing price regulation is a positive step that should have been introduced a long time ago, as closing prices manipulations have been a pain in the neck," Mahmud said. The EFSA and ESE have been recently involved in conducting a series of reforms to guarantee transparency and efficiency of ESE trading operations. The EFSA approved the revival of pre-marketing sessions that guarantee transparency and prevent manipulation of quoting stocks' opening price, also suggested by ESE board of directors.
