EGX shows mixed performance this week, equities gain 1,8B EGP
Egyptian Exchange - YOUM7 (Archive)
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CAIRO: The Egyptian Exchange (EGX) showed a mixed performance this week amid a state of uncertainty regarding the implementation of the controversial tax on capital gains and stock dividends.

The benchmark index EGX30 added a slight 0.8 percent to end the week at 8,742 points, compared to 8,672 points a week earlier. Equities gained around 1.8 billion EGP ($242.6 million).

“The benchmark index EGX30 managed to resume its upward correction, breaching its new resistance level near 8,750 points and approaching th next resistance near 9,000 points, buoyed by blue chips’ rebound,” Osool Securities Brokerage technical analysis head Ehab Saeed told The Cairo Post.

CIB, the market bellwether, which comprise more than 37 percent of the benchmark, advanced once more toward its former resistance near 56.5 EGP, but failed to breach it due to profit taking activities as of the week end, Saeed added.

Meanwhile, the small and mid-cap index EGX70 retreated 1.3 percent to end at 469.2 points, down from 475.4 in the previous week. The broader index EGX100 also recorded a 0.3 percent slip to 968.6 points.

Saeed said the EGX70 traded sideways between 462-476 points amid thin liquidity as traders have been anticipating a clear vision about the capital gains tax and its executive bylaw.

Investors have repeatedly urged the government to discard or suspend this tax for three years, until the economy recovers.

According to the new regulations, dividend distributions to individual investors with an annual turnover not exceeding 5 million EGP will only be subject to a 5-10 percent tax. Dividend distributions to those with an annual turnover exceeding 5 million EGP, however, will be subject to the general income tax.

“Next week, the EGX30 is projected to focus on key resistance near (9,000-9,050) points. Breaching this level would hinder the index upward rebound,” the analyst predicted.

Saeed also expected the EGX70 to focus on its resistance near (480-485) points, which could hinder its upward correction.

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