EGX30 slips 1.8% amid escalated anger over capital gains’ tax
Egyptian Exchange - YOUM7

CAIRO: The Egyptian Exchange (EGX) showed a mixed performance this week, as the benchmark index EGX 30 dropped 1.8 percent, hurt by blue chips negative performance and sell-offs namely from local traders.

The benchmark ended the week at 8,891 points, compared to 9, 052 a week earlier. In return, the small and mid-cap index EGX70 added a slight 0.8 percent to hit 505.8 points, up from 502 points, while the broader index EGX100 fell by 0.23 percent, recording 1,025 points.

Equities added 9.4 billion EGP ($1.2 billion) in five sessions, offsetting part of the 20.4 billion losses it had incurred a week earlier.

“The benchmark breached its support near 9,000 points during Thursday’s session, after holding steady above this level amid sideways trading earlier this week,” Osool Securities Brokerage technical analysis head Ehab Saeed told The Cairo Post.

The Commercial International Bank (CIB); the market bellwether which seizes 36 percent of the benchmark, failed to sustain above its previous support near 57 EGP, slipping sharply to 55.35 EGP at close of Thursday, said the analyst.

He added that most blue chips failed to maintain above their supports, namely Talaat Moustafa Holding and EFG-Hermes.

Egypt’s market rode a violent downward movement over the past three weeks, shrugging off positive incentives from the Egypt Economic Development Conference held in Sharm el-Sheikh in March 13-15, which resulted in anticipated investments of $72.5 billion.

Saeed pointed out that the extended slip was initially triggered from traders’ anger over government’s insistence on imposing the capital gains tax on stock market profits and dividends approved in July. The market is still anticipating the issue of the bylaw of this tax system.

Local retailers’ anger escalated this week with dozens organizing a protest outside the headquarters of the EGX Sunday, calling for the removal of its chairman, blaming him for a market plunge over the past two weeks.

Despite the “unpredicted success” of the economic conference which resulted in anticipated investments of $72.5 billion, the EGX neglected all positive drivers, losing roughly 45 billion EGP in less than 10 sessions, Saeed told The Cairo Post earlier last week.

Egypt’s market was unaffected by the commencement of trading on leading snack manufacturer Edita Food Industries Thursday at an opening price of 18.5 EGP/share under the symbol “EFID.CA.” Traders rushed to buy Edita stock, which saw a 16 percent hike on the first day to hit 21.6 EGP at close.

The EGX30 will focus on the former support level near 8,700 points, predicted the analyst. “Sustaining above this level would hinder its downward wave,” he added.

Saeed predicted the EGX70 will focus on its support near 495 points, noting that breaking this level may drag it toward 475 points.

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