First of all, many officials in the former government are being investigated for corruption. Because a number of these individuals are likely invested in Egyptian firms, there was concern over them hiding money or taking it out of the market before they could be investigated. Market officials have been cautious therefore in assuring that they identify whose funds should be restricted.
In addition, all Egyptian companies were asked to disclose the impact of the riots on their business, which they have done. This was likely to prevent indiscriminate fire sales, where investors sell first and ask questions later. There was also concern that local brokers who were invested on margin would be disadvantaged when the market reopens. There have therefore been provisions put in place to give these brokers subsidies on their margin calls.
Also, there was a desire to resume normal market operations when the government was more functional. Logically, the CEO of the Egyptian market should have the chance to know who is in charge of the country before the market resumes. In addition, it makes sense for the market to wait for normal banking to resume before markets reopen.
That being said, we are somewhat surprised it has taken this long for Egypt to get its house in order. However, the rationale behind the closure does in fact seem justified. At this point it does little good to trust the date that is set for the market to re-open, however we do anticipate that it will happen soon.
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