EGX extends slump over capital-gains tax, equities shed $1B
Egyptian stock exchange - YOUM7 (Archive)

CAIRO: The Egyptian Exchange (EGX) extended its free-fall at the close of Tuesday’s session, hammered by local sell-offs for a third straight day.

The benchmark index EGX30 retreated 1.92 percent to 8,330 points at close, down from 8,494 points on Monday.

Egypt’s market has been riding a downward wave as the government has eventually approved capital-market taxes earlier in April, shrugging off traders’ repeated calls for discarding or suspending it for three years, until the economy recovers.

Also, the small and mid-cap index EGX70 slumped 3.09 percent to end at 460.36 points, compared to 475 points in its last session. The broader index EGX100 also tumbled 2.2 percent as well, ending at 941.6 points.

Market capitalization shed around 8 billion EGP ($1.04 billion,) totaling 488.3 billion EGP, lower than 496.3 billion EGP Monday.

“The main index shut on a negative note as 26 of 30 index movers closed in the red,” said Adham Gamal Eldin, head of the technical analysis desk at Cairo Capital Securities.

In comments to The Cairo Post, Gamal Eldin attributed the sharp slip to aggressive selling pressure on both big and small caps, which led the benchmark to break its major support level of 8,450 points.

“This leads us to put the level of 7,700 in front of our eyes as the next level we may reach at the coming weeks as long as the sellers are still controlling the market,” he added.

According to the analyst, the EGX30 faces a first resistance level at 8,800 followed by 9,000 points, while the 8,450 point area acts as a first support level followed by 8,150 points.

“Short term investors are advised to hold on to their cash, while medium-term investors should watch the support level of 8,450 points closely,” Gamal Eldin recommended.

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