Egypt’s stock market plunged Tuesday to a four-month low on local investors’ broad selloff angered by the introduction of a capital gains tax this month.
Consequently, the country’s main stock index, EGX30 also fell to its lowest level since December 18, 2014, overlooking positive news such as first quarter earnings of leading property developer Palm Hills.
The market capitalization has recorded 488.365 billion pounds during the closing session of Tuesday.
Market players have blamed the continuing sell-off on regulations for taxes on capital gains and dividends. The new rules have been criticised by the head of the Egyptian stock exchange among others; he said they were too complex. Fund managers complain they are too burdensome.
Egypt’s benchmark index, EGX30 pushed down by 1.92 percent to close at 8330.52 points. EGX20 sank by 2.27 percent to 8714.46 points.
In addition, the mid- and small-cap index EGX70 dived by 3.09 percent to 460.36 points. The price index, EGX100 sagged by 2.20 percent to 941.58 points.
On Tuesday, the bourse’s trading volume has recorded 154.765 million securities, with turnovers closed at EGP 702.834 million, exchanged through 18.250 thousand transactions.
Also during the closing session, 183 listed securities have been traded in; 126 declined, 23 advanced; while 24 kept their previous levels.
Fueled by anger on the continuing adopting capital tax gains, the local investors were net sellers on Tuesday seizing 76.43% of the total market, with a net equity of EGP 58.744 million, excluding the deals.
On the other hand, the non-Arab foreign and Arab investors were net buyers capturing 16.84% and 6.73% respectively of the total markets, with a net equity of EGP 37.755 million and EGP 20.488 million, respectively, excluding the deals.
The taxes were originally introduced in July 2014 but could not be implemented without detailed bylaws which the government approved this month. The Egyptian Association for Financing and Investment Studies and a group of investors filed a lawsuit this week seeking to scrap them.