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Egypt's stocks end week in red as investment minister insists on bourse tax

Planned capital gains tax spooks investors

Ahram Online, Thursday 19 Jun 2014
Egypt
Egypt's stocks ended the week in red (Photo: AP)
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Egypt's stocks ended the trading week in the red, with investors concerned about a statement by the newly appointed investment minister on a possible 10 percent capital gains tax, according to an analyst.

Sherif Salman, the new investment minster, stated on Thursday that the government does not intend to reverse a decision to impose taxes on investors' profits and dividends in the stock market.

Eissa Fathy, the vice head of the securities division at the Cairo Chamber of Commerce, told Ahram Online that investors have ignored positive news as they were more impacted by the tax updates.

The president is yet to approve the tax.

Fathi pointed out that Egypt saw several positive things over the week were expected to push up the indices, such as the first cabinet reshuffle since the election of a new president, the regulator's approval of the deal of EFG-Hermes and Beltone-Sawiris, and the unfreezing of the country's membership in the African Union.

The Egyptian Financial Supervisory Authority (EFSA) approved on Wednesday an offer made by Dutch-based New Egypt Investment fund, owned by Naguib Sawiris, and Beltone Financial, to buy a 20 percent share in the country's biggest investment bank Egyptian Financial Group Hermes (EFG-Hermes).

EFSA added that the offer would stand for 10 working days after its official publication. 

The market's benchmark EGX30 dipped 1.1 percent recording 8,340 points in a session that saw a modest daily turnover of listed securities worth LE745.8 million.
The broader index EGX70 dropped 0.8 percent.

Domestic investors were net buyers of some LE43 million worth of shares, while foreign investors ended the trading as net sellers of LE35.8 million.

The heavyweight share Commercial International Bank (CIB) slipped 1.1 percent closing at LE36.2 per share.

Prominent real estate developers saw a decline, led by Talaat Mustafa Group (TMG) which lost 3.2 percent to close at LE8.9 per share.

Palm Hills Development (PHD) and Six of October Development and Investment (SODIC) tumbled 0.4 percent and 3.1 percent to registering LE4.2 and LE32.2 per share respectively.

In the telecommunications sector, Telecom Egypt (TE) and Global Telecom (GT) fell 1.4 percent (LE13.6) and 1.4 percent (LE5.3) respectively.

EFG-Hermes remained flat on Thursday to close at LE15.4 per share.

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