In Election Week, Egypt Shares Lose EGP21.6 billion

Big 5

In a week which coincided with holding the Egyptian presidential elections and announcing new taxes on bourse, Egypt’s stocks lost 21.6 billion Egyptian pounds.

The main stock index, EGX30 dived by 5.6% throughout trading sessions of last week, registering an decline of 484.6 points, ending Thursday’s transactions at 8242.94 points compared to 8727.54 points at the end of a week earlier. The trading sessions throughout this week witnessed their lowest performance since the beginning of this year.

The main gauge index registered its highest point on Sunday closing at 8762.86 points, whereas its lowest point recorded on Thursday at 8242.94 points.

In addition, the mid- and small-cap index, the EGX70 sank by 5.5% closing at 589.5 points during Thursday’s session, compared to 623.66 points at the end of a week earlier. The price index, EGX100 also pushed down by 5.4% concluding by 1030.85 points during Thursday’s session, against 1089.72 points at the end of a week earlier.

Trading sessions have been halted for one day on Tuesday, May 27, to encourage Egyptians to vote.

Furthermore, the market capitalization closed at EGP 476.29 billion last Thursday, compared to EGP 497.892 billion at the end of a week earlier.

Turnovers & Traded Volumes:

Through the week, the trading volume hit around 1.3 billion securities, compared to 1.5 billion securities at the end of a week earlier. For the traded value, it reached EGP 5.9 billion against EGP 9.1 billion a week earlier.

Investors’ Activity:

Local investors led the market activity all through the week with 84.22%, followed by foreign and Arab investors with 8.09% and 7.68%, respectively, after excluding the deals.

Foreign investors were the most active sellers during the week earning the value of EGP 34.34 million, after excluding the deals.

Arab investors were also to sell by value of EGP 56.48 million, after excluding the deals.

Moreover, institutions seized 42.25% of total trading through the week; while individuals attained 57.75%. Institutions were the most active sellers during the week earning the value of EGP 112.21 million, after excluding the deals.

Market Remarks

–      Egypt Bourse Chief Says Tuesday Official Vacation

Dr. Mohamed Omran, Egyptian Stock Exchange (EGX) chairman announced that the market would be closed on Tuesday, May 27, which marked the second day of the country’s presidential elections.
Trading has been resumed on Wednesday, May 28.

–      Egypt Mulls Tax on Bourse Profit, Dividends – Reuters

Egypt may impose a tax on profit and cash dividends from the stock market transactions since the country is facing several economic challenges, said an official source from the government on Wednesday.

The source spoke to Reuters on condition of anonymity.

The Ministry of Finance has been discussing such a tax with the Egyptian Financial Supervisory Authority (EFSA) and the Egyptian Exchange (EGX), the source added.  The three parties aim to study the impact of this tax on the market performance alongside to determine its value.

In May 2013, the government imposed a stamp tax on EGX which was to be paid by both the buyer and the seller.

Sherif Samy, Chairman of market regulator EFSA, declined to comment in a phone call with Reuters. The Finance Minister was not available to comment.

–      Egypt’s Ministry of Finance Confirms Capital Tax on EGX

Egypt’s Ministry of Finance confirmed in a statement on Thursday the news about imposing taxes on capital gains achieved in the Egyptian stock exchange (EGX).

The ministry stated that the that the calculation of the tax on profits will be on the net value of the market capitalization portfolio by the end of year, compared to its value at the date of approving that law regardless of the purchase date preceding this law, taking into consideration to relay any losses achieved by the investor for the coming 3 years.

–      Delta Cement to IPO 50% of Shares in Egypt Bourse in H2

Delta Cement plans to IPO 50% of its shares in the Egyptian stock market in the second half of 2014, announced by the vice chairman of Egypt-based Prime Holding for Financial Investment Mohamed Maher last Wednesday.

Maher also said his firm will lead the initial public offering for 50% of Delta Cement’s shares in the Egyptian Exchange in H2/2014.

The IPO step comes within the framework of Delta Cement’s strategy to increase its capitalization to EGP 1.2 billion (US$167.8 million) from EGP 300 million (US$42 million). The company seeks to benefit from the current market attractiveness, with the aim for increasing, Maher noted

In addition, Prime’s vice chairman further said his company is currently undergoing comprehensive studies on the Delta Cement’s capital hike process.
It comes after Arabian Cement Company’s IPO, the country’s first initial public offering since the 2011 uprising that ousted President Hosni Mubarak, were launched and shares started trading earlier this month.