Egypt Suspends Trading In Numerous Stocks On Concerns Of Market Manipulation
Currency devaluation in Latvia, government overthrow in Romania, and now blatant market manipulation in Egypt. Surely this all will somehow result in record bonuses on Wall Street. Bloomberg reports that Egypt's EGX70 index fell the most in two months after the "stock exchange suspended trading in 26 small and medium-sized companies on concern that some share prices may have been manipulated." At least the US stock market, the paragon of virtue that it is, is sure to never have to suffer the same indignity.
The EGX70 Index, a measure
of small and medium-sized companies, fell 2.9 percent, the
biggest decline since Aug. 17, to 848.88 at the close in Cairo.
The index has surged 76 percent this year, outpacing the
country’s benchmark EGX30 Index, which has gained 48 percent.
The decision “definitely had an impact, mainly on the
small caps,” and increased “negative sentiment,” said Ashraf
Akhnoukh, a senior equity sales trader at Commercial
International Brokerage Co. in Cairo.
The stock exchange suspended 26 companies, many of them on
the EGX70 Index, including Egypt Contracting Mokhtar Ibrahim,
Rakta Paper Manufacturing and GMC Group for Industrial
Commercial & Financial Investments, from trading because of
gains in the stock price that have not been driven by “material
events,” according to a statement on the exchange’s Web site.
“The suspended companies had their share prices increase
significantly in a very short period,” said Khaled Seyam,
deputy chairman of the Financial Regulatory Authority. “There
had to be a bold decision.” The suspensions remain until the
companies disclose their “future plans” and appoint an
independent financial advisers to determine the shares’ “fair
Picture that: stocks suspended from trading after their gains have not been supported by fundamentals. How plain silly.
Whether the market manipulation stems from insiders or from the government is not quite clear. Some countries like Japan have had an open market intervention policy into equities by the government for years. And somehow the US is not only insulated from claims that greater forces determine stock prices, but any such allegations are promptly met with ridicule. At some point, when the Fed is finally audited, one hopes all fears to the contrary will finally be put to rest. After all the Fed has nothing to hide. However, the lack of any "alleged" market manipulation does not explain why the Fed is still dead set against bills such as HR1207, which at last check had an unprecedented 301 supporters.
h/t Hedge Your Mind