A view from the Egyptian stock market in Cairo (Photo: Reuters)
Egypt's benchmark index declined again on Wednesday by a significant 0.55 percent to reach 5,515 points, under expectations of a new tax, further darkening an already bleak week.
"Today's market decline is the logical continuation of a downward trend this week that was exacerbated by the announcement of the tax on transactions, which is sure to drive away foreign investors," said Eissa Fathi, vice head of the securities division at the Cairo Chamber of Commerce.
The government had unveiled an economic recovery plan imposing a 0.001 percent tax on all stock market transactions on Monday.
The government's indecision in regards to economic policy and poor company results were other factors putting investors off and perpetuating the downward trend, Fathi added. "If the index hits the 5,000 mark, the decline will accelerate."
An impressive 105 traded stocks out of 164 registered a decline, including real estate securities Six of October Development & Investment (SODIC), Palm Hills Development Company, and Talaat Mostafa Group Holding (TMGH), which all fell by as much as 1.49 percent.
Blue chip stocks Orascom Construction Industries (OCI) dropped by 0.89 percent, while Commercial International Bank (CIB) gained a mere 0.06 percent.
Total market turnover was weak, standing at LE261.8 million. "Turnover has not reached LE300 million all week, which indicates a loss of investor appetite," Fathi remarked.
Egyptians were net buyers, at the value of LE17 million, while foreign investors offloaded a net of LE27.5 million worth of securities.
The wider EGX70 index registered a drop of 0.68 percent.