Oct. 13 (Bloomberg) -- Egyptâs EGX70 Index fell the most in almost two months after the stock exchange suspended trading on 26 small and medium-sized companies on concern that some share prices may have been manipulated. Nile for Matches and Prefabricated Houses Co., a producer of safety matches, and Rubex Plastics, a maker of acrylic bathtubs, tumbled the most in a year. 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 countryâs benchmark EGX30 Index, which has gained 48 percent. The decision âdefinitely had an impact, mainly on the small caps,â and increased ânegative sentiment,â said Ashraf Akhnoukh, a senior equity sales trader at Commercial International Brokerage Co. in Cairo. The stock exchange suspended companies including Egypt ContractingMokhtar 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 âmaterial events,â according to the exchangeâs Web site. The regulator began suspending some of the companies on Oct. 11. âManipulationâ âWe have some cases of speculation and some cases of manipulation,â Maged Shawky, chairman of the exchange, said in a telephone interview from Cairo today. When asked about possible manipulation, he said, âif proven true, we will take measures.â He didnât elaborate. Ziad Bahaa El-Din, head of Egyptâs Financial Supervisory Authority, which regulates financial markets, pledged in July to clampdown on market manipulation and insider trading. Mokhtar Ibrahim, a provider of construction and contracting services, has risen 127 percent since the beginning of the year, while Rakta, a paper maker, has soared almost three-fold. âThe suspended companies had their share prices increase significantly in a very short period,â said Khaled Seyam, deputy chairman of the Financial Regulatory Authority. âThere had to be a bold decision.â The suspensions remain until the companies disclose their âfuture plans,â conform to listing rules, and appoint an independent financial adviser to determine the sharesâ âfair price,â according to the bourse. The suspended companies ârepresent no more than six percent of the volume of tradingâ and not more than 5 percent of the market value âwhich is negligible for the main market,â Shawky said. Nile for Matches dropped 14 percent, the most since October last year, to 37.08 Egyptian pounds. Rubex Plastics lost 12 percent to 20.38 pounds. Egyptâs benchmark EGX30 Index fell 0.2 percent to 6,811.56. The following is a list of the companies whose shares have been suspended from trading: Alexandria Portland Cement Co. Egyptian Real Estate Misr Foam Co. Kafr El-Zayat Pesticides & Chemicals Co. Rakta Paper Manufacturing Delta for Printing & Packaging Alexandria National Co. for Financial Investment National Investment & Reconstruction National Real Estate Bank for Development Cairo Oils and Soap National Housing for Professional Syndicates El Arabia for Land Reclamation Amoun Pharmaceutical Co. GMC Group for Industrial Commercial & Financial Investments Arab Aluminum Co. Nasr Co. for Civil Works Egypt Contracting Mokhtar Ibrahim El Kahera El Watania Investment The Saudi Egyptian Investment & Finance Co. Gezira Hotels & Tourism TransOceans Tours Pens & Plastic Industries Cairo Educational Services SAE National Navigation Co. Modern Shorouk Co. for Printing & Packages Suez Canal Automotive Repair and Maintenance Co. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=amVjBo3f8HII Excellent idea for some other markets, too.