Sunday 05 September 2021
I wrote – Sherine Salah:
The main index of the stock exchange EGX30 fell at the end of trading on Sunday, the first session of the week, by 1.85% to the level of 11095 points, driven by the sales of Egyptian investors.
The EGX70EWI index of small and medium stocks fell by 3.75%, and the broader EGX100EWI index fell by 3.49%.
The transactions of Egyptian investors recorded a net sale of 19.7 million pounds, while the transactions of Arab investors recorded a net purchase of 11.4 million pounds, and foreign investors’ transactions recorded a net purchase of 8.3 million pounds.
Mohamed Radwan said that the sudden decline in the stock market indices is due to the announcement once again of imposing capital gains tax on the stock exchange starting in January.
Last week, the government published a guide to the rules for applying the tax, with the possibility of its activation on January 1, 2022.
The story of the capital gains tax on the stock market goes back to 2014, and Egypt started applying it at 10% in July 2014, and the government postponed it for two years in May 2015 due to turmoil in the money market and in return it imposed a progressive tax on transactions, then postponed it for a period of 3 years.
Last year, the government postponed the capital gains tax until the end of 2021, and no decision has yet been made on the actual implementation.
Radwan added that there is a period until the beginning of the year for the tax to be imposed, noting that the matter has not been resolved yet.
Radwan expected that the effect of the tax announcement would be on today’s session only, ruling out a continuous decline in the coming sessions.
The main index of the stock exchange rose at the end of trading last Thursday by 0.16% to the level of 11301 points.