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Market update: Trading suspended in Egyptian bourse on significant fall

News of a new capital gains tax shook the market Sunday, leading to a 30-minute suspension of trading

Ahram Online, Sunday 1 Jun 2014
Egypt stocks
Egypt's stocks turned red in trading's early hours on Sunday (Photo: AP)
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The Egyptian Stock Exchange suspended trading Sunday for 30 minutes as a precautionary measure following a five percent drop in its main indices.

The market’s benchmark EGX30 fell 5.7 percent, recording 7,771 points, hitting a near two-month low.

“That’s expected due to the capital gain tax decision, which fueled investors’ rage,” said Eissa Fathy, vice head of the securities division at the Cairo Chamber of Commerce.

Finance Minister Hany Kadry Demian revealed to Reuters Thursday that the Egyptian cabinet approved levying a 10 percent capital gains tax on profits and dividends of listed securities, in an effort to bring to the public treasury LE10 billion ($1.4 billion) per annum.

The broader EGX70 and EGX100 indices tumbled more than five percent as well.

Fathy projected that net-buyer Arab and foreign investors would attempt to bouy the market once trading resumed.

Out of 159 stocks currently listed, 132 declined and only three shares headed up.

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