Indexes of the Egyptian Exchange (EGX) wrapped up sessions in May on a down note, as it slumped following the government’s announcement of approving capital gains tax on stock market profits, dividend and bonus shares.
In May, the benchmark index EGX30 fell 0.16% to close at 8242.94 points and the small and mid-cap index EGX70 went down 3.27% to 589.5 points.
The benchmark plummeted by more than 5.6% during the last two sessions hurt by the news about the new tax.
Finance Minister Hany Qadry Dimian said on Thursday the government approved imposing a 10% capital gains tax on stock market profit, cash dividend and bonus shares, to be collected annually.
"The council of ministers agreed to impose a 10 percent tax on net capital gains that individuals make at the end of the tax year," Dimian told Reuters in a phone interview.
"A tax of ten percent was also imposed on cash dividends and bonus shares."
The minister added that the tax is part of the first part of income tax reforms that are expected to generated EGP 1 billion ($1.4 billion) proceeds.
The Finance Ministry said on Wednesday it is studying the cancellation of the stamp tax imposed on dealings in EGX, amid confirmations that no tax would be levied with retrospective effect, or based on historical prices before the law was issued. The ministry is also planning to cancel the additional tax imposed on commercial transactions. These two draft resolution will be discussed by the Cabinet in the upcoming period.
Meanwhile, Field Marshal Abdel Fattah El-Sisi was declared Thursday the winner of Egypt’s presidential elections in an overwhelming victory over his leftist rival Hamdeen Sabbahi, securing 96.2% of the vote with most of the ballots counted, although his victory was marred by low turnout at polling stations.
At least 21 million voters, or 96.2 % chose the retired field marshal, who deposed the elected Islamist president Mohamed Mursi last July, with the ballots counted from 312 of 352 counting stations, state television reported.
Mountasir Madbouly, head of technical analysis, El Orouba Securities Brokerage, said the tax decision will make the Egyptian market lose its attraction as regards new investments.
According to the analyst, the index will likely rebound from the slide at key support area of 8000-7950 points. However, failing to stay above such a support level will drive the index further down to 7400-7350 area.
Madbouly indicated that, despite the current investor jitters, the market is still maintaining its upward trend in the medium and long term and is expected to see further rallies.
In May, the benchmark index EGX30 fell 0.16% to close at 8242.94 points and the small and mid-cap index EGX70 went down 3.27% to 589.5 points.
The benchmark plummeted by more than 5.6% during the last two sessions hurt by the news about the new tax.
Finance Minister Hany Qadry Dimian said on Thursday the government approved imposing a 10% capital gains tax on stock market profit, cash dividend and bonus shares, to be collected annually.
"The council of ministers agreed to impose a 10 percent tax on net capital gains that individuals make at the end of the tax year," Dimian told Reuters in a phone interview.
"A tax of ten percent was also imposed on cash dividends and bonus shares."
The minister added that the tax is part of the first part of income tax reforms that are expected to generated EGP 1 billion ($1.4 billion) proceeds.
The Finance Ministry said on Wednesday it is studying the cancellation of the stamp tax imposed on dealings in EGX, amid confirmations that no tax would be levied with retrospective effect, or based on historical prices before the law was issued. The ministry is also planning to cancel the additional tax imposed on commercial transactions. These two draft resolution will be discussed by the Cabinet in the upcoming period.
Meanwhile, Field Marshal Abdel Fattah El-Sisi was declared Thursday the winner of Egypt’s presidential elections in an overwhelming victory over his leftist rival Hamdeen Sabbahi, securing 96.2% of the vote with most of the ballots counted, although his victory was marred by low turnout at polling stations.
At least 21 million voters, or 96.2 % chose the retired field marshal, who deposed the elected Islamist president Mohamed Mursi last July, with the ballots counted from 312 of 352 counting stations, state television reported.
Mountasir Madbouly, head of technical analysis, El Orouba Securities Brokerage, said the tax decision will make the Egyptian market lose its attraction as regards new investments.
According to the analyst, the index will likely rebound from the slide at key support area of 8000-7950 points. However, failing to stay above such a support level will drive the index further down to 7400-7350 area.
Madbouly indicated that, despite the current investor jitters, the market is still maintaining its upward trend in the medium and long term and is expected to see further rallies.
Source:
Mubasher Exclusive
