EGX slumps in April over tax concerns, benchmark plunges 5%
The Egyptian Exchange - YOUM7 (Archive)

CAIRO: The Egyptian Exchange (EGX) extended its losing streak for the second month in a row by April-end, and market capitalization shed around 6.4 billion EGP ($844.5 million,) according to its monthly report issued Thursday.

During the course of April, the benchmark index EGX30 slipped 5.06 percent to end at 8,642 points, down from 9,134 at March-end.

Egypt’s government approved the executive bylaw for the stock-market taxes on capital gains and dividends earlier in April, which triggered intensive sell-offs from investors who repeatedly called for discarding or suspending it, until the economy recovers.

Further, the small and mid-cap index plunged 8.18 percent, ending April at 475.4 points, compared to 517.6 points a month earlier. The broader index EGX100 also retreated 7.07 percent to close the month at 971.7 points.

The downward wave started in March, shrugging off the Egypt Economic Development Conference held in Sharm al-Sheikh March 13-15, which resulted in $60 billion in anticipated investment contracts and memoranda.

Trade volumes and value witnessed a remarkable slip in April, totaling 18.6 billion EGP with 2.648 million securities traded on 370,000 transactions, down from 24.2 billion EGP and 2.789 million securities traded on 444,000 transactions in March, according to the report.

Osool Securities Brokerage technical analysis head, Ehab Saeedcited the slump to traders’ anger over the government’s insistence on imposing such tax.

Saeed told The Cairo Post that the benchmark will focus on its new resistance near8,750 points

“A breach above this level may send the EGX30 to continue its upward correction toward 9,000 points, where it may face selling pressures once again,” the analyst predicted.

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