* Benchmark index seen falling by as much as 30 percent
* Reopening has been delayed at least five times
* Trade to be suspended for half hour if EGX100 drops 5 percent
* Foreign sell-off could renew pressure on currency
* Foreigners held about $14 billion in shares before unrest
By Patrick Werr
CAIRO, March 22 (Reuters) - Share prices are expected to tumble when the Egyptian stock exchange reopens from a seven-week closure on Wednesday, a day ahead of a deadline that could have meant exclusion from the MSCI emerging markets index.
The political turmoil that toppled Hosni Mubarak has kept the exchange closed since Jan. 27, with the government postponing the reopening at least five times.
A sell-off by foreign investors could put renewed pressure on the Egyptian pound, which has fallen 2.2 percent against the dollar since protests first erupted on Jan. 25. The pound fell to 5.945 on Tuesday from 5.934 on Monday.
The bourse, which will open at 10:30 a.m. (0830 GMT) on Wednesday, will suspend trade for a half hour if the broad index declines by 5 percent and for even longer if it falls by 10 percent, Chairman Mohamed Abdel Salam said by telephone.
The trading session will end one hour earlier than normal at 1:30 p.m. (1130 GMT) for one week, said Abdel Salam, who was appointed temporary chairman of the exchange on Monday.
The government has been reluctant to restart trade until compensation is arranged for small investors caught out by falling share prices and safeguards put in place to prevent anyone under investigation from shifting funds abroad.
Officials in several of the biggest listed companies have had their assets blocked or been charged with crimes as the government investigates alleged corruption under the old government.
POOR OUTLOOK
The benchmark index plunged 16 percent in the two days the exchange was open after protests erupted on Jan. 25, and analysts say Egypt's poor economic outlook, weak currency and political uncertainty may now push it much lower.
"I think it will fall 20 to 30 percent over the next few weeks," said Simon Kitchen, a strategist with Cairo-based EFG-Hermes. "It is difficult to see where bids will come from."
Investment bank CI Capital forecast last week in a note that the index could fall by 19 to 29 percent once the bourse reopened.
Egypt's economy has been in disarray for the last eight weeks, with some of its main sources of foreign exchange, including tourism and foreign investment, having collapsed, and many factories continuing to operate below capacity.
The MSCI said Egypt's listing on its emerging markets index would be put on review if the exchange didn't open by Thursday. Many funds tie their holdings to the index, and removal would cause them to sell them off automatically.
Egypt's free-float market capitalisation in the MSCI index stood at $17 billion as of Jan. 20, representing 0.4 percent of the nearly $4 trillion global value of the benchmark.
If Egypt were put on review, some investors wouldn't wait for a final decision, but would likely start selling off immediately.
Foreign investors hold about $14 billion in Egyptian shares that were actively traded prior to the exchange's closure in January, figures from data provider Thomson Reuters Ownership show.
That is less than half the value of Egyptian shares held by domestic investors, estimated to be worth $46 billion, based on filings reported late last year. (Additional reporting by Sebastian Tong in London; Editing by Jon Loades-Carter)