In May, Egypt Shares Lose EGP1.7 billion

In May, Egypt bourse incurred losses worth 1.7 billion driven by the recently announced tax on capital gains.

In return, the country’s main stock index reported during May, its lowest point since the beginning of 2014.

On May 29th, Egyptian government has approved the introduction of a 10% capital gains tax on profits made on the stock market.

The tax is part of the first phase of income tax reforms in the country expected to bring in 10 billion Egyptian pounds ($1.40 billion), Egyptian Finance Minister Hany Kadry Dimian told Reuters Thursday. He said the tax would not be retroactive and would be implemented once a law was issued.

“The cabinet agreed to impose a 10 percent tax on net capital gains that individuals make at the end of the tax year,” Dimian said. “A tax of 10 percent was also imposed on cash dividends and bonus shares.”

Through February – the main index, EGX30 dropped by 0.16% to end at the level of 8243 points.

For the mid- and small-cap index, the EGX70 pushed down by 3.27% to close at 590 points. In addition, the price index EGX100 tumbled by 3.14% to conclude at the level of 1031 points.

Furthermore, market capitalization ended at EGP 476.290 billion by the end of May’s sessions, compared to EGP 478.038 billion by the end of last April’s sessions.

Turnovers & Market Summary

In May, EGX’s traded volume reached around 5.433 million securities worth turnovers of around EGP 28.6 billion, exchanged through 595 thousand transactions. Noting that, through last April the traded volume had reached 4.819 million securities worth turnovers of around EGP 20.5 billion, exchanged through 593 thousand transactions.

Elsewhere, the traded volume for the EGX of SMEs – NILEX through May has amounted to 15.2 million securities worth EGP 52.6 million, exchanged through 7726 thousand transactions.

For EGX’s Over-The-Counter – OTC trading, the shares had seized 75.97% out of the total traded value; while traded value of the bonds represented around 24.03% in May.

Investors Activities:

Local investors led the market activity through May, seizing 83.83% of the total market; while non-Arab foreigners and Arabs acquired 9.09% and 7.08%, respectively of the total market, after excluding the deals.

Excluding the deals, the non-Arab foreigners were net sellers in May, with a net equity of EGP 370.97 million; while Arabs were net buyers, with a net equity of EGP 63.15 million, after excluding the deals.

Also in May, institutions had seized 48.98% of the EGX’s transactions; while individuals had 51.02%.

Institutions were net buyers, with a net equity of EGP 318.39 million through February, after excluding the deals.

Trading on Bonds

In May, the volume of trading on bonds recorded around 6.338 thousand worth turnovers of around EGP 6.680 million.

Sectors Activity:

Financial Services excluding Banks was the most active sector through last May, recording a volume of trades of 1.644 billion securities worth EGP 5.062 billion.

Telecommunications came second, attaining a volume of trades of 1.521 billion securities worth EGP 2.842 billion.

Real Estate reported third, with a volume of trades of 549.9 million securities worth EGP 3.441 billion.

Travel & Leisure sector was on the fourth position, getting a volume of trades of 484 million securities worth EGP 1.103 billion.

Construction and Materials came fifth, recording a volume of trades of 320.3 million securities worth EGP 2.044 billion.

Personal and Household Products reported sixth, having a volume of trades of 297 million securities worth EGP 1.263 billion.

Industrial Goods and Services and Automobiles Sector was on the seventh position, with a volume of trades of 285.1 million securities worth EGP 657.3 million.

Banks reported eighth, registering a volume of trades of 92.6 million securities worth EGP 3.041 billion.

Food and Beverage was on the ninth position, with a volume of trades of 85.6 million securities worth EGP 419.5 million.

Basic Resources reported tenth, recording a volume of trades of 39.4 million securities worth EGP 584.9 million.

Healthcare and Pharmaceuticals came eleventh, attaining a volume of trades of 15.4 million securities worth EGP 126.5 million.

At the bottom of the list, Chemicals reported twelfth getting a volume of trades of 13 million securities worth EGP 207.6 million.