Egypt exchange plans new way to calculate closing prices

Egypt's bourse is to introduce new measures to regulate the closing prices of stocks, the exchange's chairman confirmed on Sunday. The closing price of Egypt-listed stocks is currently a weighted daily average of all the market's trade operations, regardless of volume traded in the share itself. From 1 October, the closing value will have to more closely reflect daily trading interest in the relevant stock. New regulations mean that the amount of shares whose average determines the closing price must be equivalent to at least 0.5 per cent of the stock's average daily turnover over three months. The stocks must also be valued at over LE10,000. In addition, all bulk deals will be excluded from the calculation of closing prices. Speaking to Reuters, the exchange's chairman Mohamed Omran said the amendments aim to reduce volatility in the prices of securities. Omran's confirmation of the move follows its approval earlier in October by the head of the Egyptian Financial Supervisory Authority (EFSA). The Bourse chairman also said that pre-session 'exploratory' trade, used to determine the opening prices of stocks, will be restored by the end of the year. Exploratory sessions were cancelled when the exchange reopened in late March 2011 after seven weeks of closure spurred by the uprising which led to ex- president Hosni Mubarak's resignation. Egypt is seeking to support and develop its capital markets in a bid to attract new foreign investment following over a year of domestic and economic turmoil. (ahram)