The Egyptian Exchange (EGX) indexes strengthened at the end of last week, following a wave of decline on the back of the high-stamp tax proposal, before the Ministry of Finance suggested to bring the rate down to 0.125%.
The EGX has been suffering over the past week, recording at midweek its lowest transactions since October 2016, at EGP 619m.
Deputy head of the Egyptian Capital Market Association, Mohamed Maher, said that the stamp tax impacted the EGX transactions, but recovered after the ministry’s proposal.
He added that the business community had earlier proposed a rate of 0.1%, which is close to the ministry’s proposal of 0.125% in the first year.
He pointed out that agreeing on a reasonable rate paves the way for larger trading in the coming period, proving that by the hike seen on Thursday at 2.52% for EGX30, confirming that the chances of a hike in the coming period are great.
Mohamed El-Aasar, head of the technical analysis department at Watany Capital Securities Brokerage, expressed his disappointment that some indexes closed down for the second month in a row, despite the increases that followed the negative wave.
He expected the market to move between 11,900 – 12,500 points this week, advising traders to be careful.
He said that the tax will devastate short-term investors due to the high cost, adding that the market could absorb the shock in the coming period.
The main index, EGX30, rose by 0.57%, closing last week at 12,310 points, while the EGX70 closed at 483 points, down by 1.38%.
The index EGX100 also fell by 0.98%, closing at 1,152 points, down from 1,163 points.
The total trading value last week reached EGP 4.9bn on 1.061 million securities over 137,000 transactions.
Egyptians transactions accounted for 71.38% of the market trading, while foreigners registered net purchases worth EGP 41.41m last week, compared to Arabs, whom conducted sales of EGP 120.76m last week.