Stamp duty hits Egyptian stocks, EGX 30 falls 3% in week
Egypt’s main stock index EGX 30 tumbled 3 percent in a week as authorities started last week applying the second stage of stamp duty on bourse transactions.
The second stage of stamp duty has been applied on the Egyptian Exchange’s (EGX) transactions starting June 1.
The duty has been raised to 1.5 pounds per 1,000 from 1.25 pounds per 1,000 during the first stage.
In 2017, Egyptian Cabinet also approved a stamp duty on stock exchange transactions for both buyers and sellers set at 1.25 pounds per 1,000 for the first year of the tax’s introduction, rising to 1.5 pounds in the second year and 1.75 pounds in the third.
It also imposes a levy of 3 pounds per 1,000 for investors buying or selling more than one third of a company’s stocks.
The country’s stock market recorded weekly losses worth 27.6 billion Egyptian pounds ($1.5 billion), closing at 902.77 billion pounds during the closing session of Thursday, down from 930.397 billion pounds at the end of a week earlier.
In addition, the mid- and small-cap index, the EGX70 also sank by 5.7 percent in a week closing at 795 points during Thursday’s session, compared to 843 points a week earlier.
During the week, the trading volume hit around 774 million securities, compared to 948 million. For the traded value, it fell 41 percent to record around 5 billion pounds against 8.6 billion pounds a week earlier.
The stamp duty law issued by Law No. 111 of 1980 stipulates that “a stamp duty shall be levied on the total value of purchases or sales of securities of all types, whether Egyptian or foreign securities, listed or unlisted on the stock exchange without deduction of any costs.”
The stamp duty was applied in June 2017 after President Abdel Fatah al-Sisi had ratified its draft law.