Egypt stocks falls on tax rumours, election uncertainty

Ahram Online, Wednesday 28 May 2014

Markets drop after government source hints at possible new tax on capital gains and dividends

Traders work at the Egyptian stock exchange in Cairo August 18, 2013. (Photo:Reuters)

Egypt’s main index fell on Wednesday as voting in the presidential elections continued and reports surfaced of a possible capital taxes.

The benchmark EGX30 dropped 2.2 percent to 8,537 points, while the broader EGX70 fell 1.3 percent.

“Reports on possible new taxes to be imposed on capital gains drove stocks down,” Mohamed Metwally, equity trader at Cairo-based Prime Securities, told Ahram Online.

Earlier on Wednesday, Reuters cited an anonymous source in the Egyptian government as saying they were studying imposing new taxes on capital gains in the bourse as well as on dividends.

The continuing uncertainty surrounding Egypt’s presidential election is another factor pulling the market down, said Metwally.

The election started on Monday and was planned to take two days but as turnout was below expectations the election committee extended voting by one day. This move came despite the objections of both presidential candidates.

Egyptian investors were net buyers to the tune of LE105 million while Arab investors were mostly selling at a net value of LE85 million.

Eastern Tobacco was the only gainer in the EGX30 index, rising 0.48 percent to LE155 per share.

Market bellwether Commercial International Bank (CIB) declined 1.74 percent to LE38.09 per share while Global Telecom Holding fell 2.72 percent to LE5.39 per share.

Real Estate Talaat Moustafa Group holding dropped 3.7 percent to LE9.6 per share and Palm Hills fell 2.81 percent to LE4.5 per share.


Short link: