Daily News Egypt

Government decision regarding stock exchange taxes awaited by EGX - Daily News Egypt

Advertising Area

Advertising Area

Government decision regarding stock exchange taxes awaited by EGX

Global, local stock exchange losses, halting transactions will likely trigger panic selling

The stock exchange is confused between positive reactions from investors towards the government’s decision to reduce the stamp tax and postponing the capital gains tax and the state of pessimism and panic as selling continues during the spread of the novel Coronavirus. Wall Street transactions stopped, as markets dropped to their minimum.

US stocks plummeted at the opening bell Monday, triggering a 15-minute market-wide trading halt amid coronavirus fears despite Federal Reserve’s emergency policy measures. The S&P 500 index plunged by 8.13%, while the Dow Jones Industrial Average dropped 9.706%.

The Egyptian Stock Exchange decided to stop its trading session yesterday because its main index losses increased by more than 8% in less than an hour since the beginning of trading, and the main index of the Egyptian Stock Exchange EGX30 closed down by 7.09% at the end of Monday’s session to settle at 9428.9 points. EGX70 EWI index for small and medium shares dropped by 6.58%, to close at 948.58 points.

Ehab Rashad, vice chairperson of Mubasher Capital Holding Financial Services, said there must be a government official responsible for the money market. The market needs exceptional decisions to support it in light of the current conditions by allocating government surpluses to invest in shares.

He pointed out that the decision on the tax file by the Ministry of Finance was not as expected since the financial market is currently suffering from the repercussions of the Coronavirus pandemic.

Rashad said that current stock levels are very low and a large portion of government portfolios should be directed to the money market to support the points’ bleeding.

The market recorded trading value of EGP 621.1m, through the trading of 237.2m shares, by implementing 21,900 sales and purchases, after trading was carried out on the shares of 171 listed companies, of which only eight shares rose.

The prices of 133 securities declined, while the 30 other shares remained unchanged. The market capital of listed shares stabilised at the level of EGP 527.83bn, losing about EGP 33.6bn during the session.

Mohammed El-Aasar, head of technical analysis at Aman Securities, expected that stock indexes will continue to decline and break important levels, with simple corrective movements for some stocks, especially with the direction of boards of directors of large companies in the stock market to buy treasury shares to support stock prices and benefit from low prices.

Ahmed Shehata, head of technical analysis at Shuaa securities, said that markets are in a state of global panic, and the Egyptian Exchange is being hit hard.

He added that the shares of CIB began some corrections, which affected the market and stock declines with the weak market and liquidity.

Shehata pointed out that the stock market needs a strong legislative and tax environment in order for the market to be cohesive and resilient in times of crisis.

The EGX50 index of equal weights decreased by 6.82%, to stablise at the level of 1328.1 points, the index “EGX30 capped” decreased by 7.29% to close at 10785.3 points, and the broader EGX100 index declined by 6.05%, to stablise at the level of 1023.7 points.

Advertising Area

Breaking News

No current breaking news

Receive our daily newsletter