Egypt issues new rules on buying treasury stocks in bid to support market

CAIRO (Agencies): Egypt introduced exceptional measures on Sunday to make it easier for listed companies to buy treasury stocks, a move aimed at supporting the stock market following a sharp fall in world markets in the past few days.

Under the new rules announced by the financial regulator, companies will be temporarily allowed to notify the stock exchange on the day they plan to purchase treasury stocks instead of having to give three days’ notice. That would encourage companies to buy treasury stocks, which are shares that companies buy back for a period of time and re-sell them later.

“(The change) comes in light of the latest events and developments that the global financial markets have faced and the wave of sharp declines that Arab and foreign exchanges have witnessed,” the regulator said in a statement.

Global stock markets fell sharply on Friday, bringing total losses for the week to $5 trillion on growing fears about the economic consequences of the coronavirus outbreak. Egypt’s blue-chip index fell again on Sunday, opening down 3.6%. Stock exchanges in the Gulf also plunged in early trade led by Kuwait and Dubai.