In light of the recent controversy surrounding EGX trading, nine EGX insider traders are being prosecuted & face fines worth EGP 1 million each, according to Al Mal.
Investigations conducted by the FRA revealed the existence of manipulative & illegal transactions, which led to the price bubble that recently popped in the market.
Below are 5/18 stocks & their performance for the period March 2020 to August 2021, compared to March 2020 to November 2021 (when the bubble burst for most of these stocks.)
Let’s Take a Step Back🤷♀️ EIGHTEEN(!) EGX70 companies saw remarkable surges in their share prices (>500%) in the period between March 2020 to August 2021, prompting the FRA to keep a close eye on these companies’ stock transactions.
One stock, Egyptians for Investment & Urban Development (EIUD), rose more than 3000%, & it’s not the only stock to rise more than 2000% during that period.
These meteoric price increases were driven by no fundamental basis, whether in the form of stellar earnings or significant company news &/or developments.
Why is this important🤔 The FRA has been criticized for intervening & canceling transactions that lead to unreasonable price hikes & requesting a fair value study of the share. These investigations only prove the validity of the FRA’s interventions to prevent manipulation & create abnormal price gaps that negatively affect the market.
Unnamed sources told Al Mal that investors are advised not to deal in stocks with irrational prices, especially those of companies that record losses in their earnings reports.
