CAIRO - Spearheaded by local and Arab buying, Egyptian stocks rebounded on Sunday, ending a three-day losing streak, traders said.
Fears of a new tax targeting capital gains were soothed after a statement by the country's Minister of Finance Samir Radwan on Saturday that the Government aims only "to tax dividends", and that gains from trading in stocks "will not be taxed". "The Government mulls to tax dividends of corporations, joint-stock, and limited-liability companies," Radwan was quoted by the official Middle East News Agency (MENA) as saying. Locals and Arabs made net purchases worth LE194 million ($32.6 million) and LE28.4 million respectively, according to Bourse data. Non-Arab investors made net sell-offs worth LE222.4 million. The country's benchmark index EGX 30 rose by 1.55 per cent, to 5,445.01 points, they added. The broader indexes EGX 70 and EGX 100 were also in the black, gaining 1.14 and 1.27 per cent to 654.97 and 1,006.56 points respectively. Volume exceeded LE591.4 million, according to Bourse data. Egypt's heavyweight Commercial International Bank (CIB) gained 1.37 per cent to LE30.39 per share. EFG-Hermes, the country's biggest investment bank by market value, slipped by 0.33 per cent to LE21.06 per share. Orascom Construction Industries (OCI) jumped by 2.53 per cent to LE268.04 per share. Orascom Telecom, the largest Arab mobile operator by subscribers, rose by 1.42 per cent LE4.28 per share. Earlier, Bourse Chairman Mohamed Abdel Salam said the 10 per cent tax was a proposed law that would be discussed with local business councils to figure out how to best implement it so as not to affect foreign investment in Egypt, according to Bloomberg. Egypt plans to levy the tax starting in the next fiscal year on dividend payments, mergers and acquisitions and asset revaluations, Radwan said last week. Egypt is trying to rein in a widening budget deficit as it raises subsidy spending and salaries of state employees to meet public demand for improving living standards after a popular revolt ended 30 years of rule by former president Hosni Mubarak in February.
