CAIRO: Trading on the Egyptian Exchange (EGX) was suspended for 30 minutes after indexes plunged in Sunday’s early trading and market capitalization shed nearly 19 billion EGP ($2.66 billion.)
Experts said the drop was by caused government’s decision to impose a 10 percent annual tax on stock market profits, dividends and bonus shares.
The EGX management decided to suspend trading for half an hour after the benchmark index EGX30 fell 5.72 percent to reach 7,771 points. The small and mid-cap index EGX70 went down 5.14 percent to hit 559 points and the broader index EGX100 dropped 5 percent to 979.
Market capitalization lost nearly 19 billion to record 457.3 billion EGP, down from 476.3 billion on Thursday.
The market bellwether CIB dropped 6.35 percent and Global Telecom lost 2.47 percent and Pioneers Holding plunged 9.9 percent.
The market did not suspend trading since the the January 25 Revolution, but the EGX administration took this procedure as the indexes exceeded the maximum limit of decline at five percent.
Head of Technical Analysis Desk at Naeem Brokerage Ibrahim EL-Nemr attributed the plunge to investor concerns that the market could witness sharp decline over the tax news.
“The market is witnessing a corrective wave and could decline to 7,400 points in the short term.”
Nemr said he expects the market to offset its loss temporarily before declining towards 7,400 points, adding that today’s session is likely to end at 7,800 point-level.
Last week, market capitalization lost around 21.6 billion EGP ($3 billion) after an investors’ selling spree following the tax news that coincided with the presidential election, and the expected landslide victory of ex-army chief Abdel Fatah al-Sisi in the presidential election; unofficial numbers show he has received over 90 percent of total votes.
The benchmark index EGX30 dipped 5.55 percent to end the week at 8,243 points, lower than 8,727 points last week.