Even if the exchange keeps its promise this time there is no guarantee of safety. Any sustained lack of access for foreign institutional investors – caused, for example, by what seems the inevitable triggering of circuit breakers – will increase its chances of expulsion. Forced selling of Egyptian stocks has all the makings of a self-fulfilling prophecy.
As Neil Hume of FT Alphaville noted on Friday, expulsion matters because exchange traded funds, index funds and any passive investors benchmarked to MSCI indices would have to sell Egyptian equities.
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