Egypt hits 4-month low on tax woes; Saudi Arabia edges up

Reuters Dubai | Updated on January 23, 2018 Published on April 28, 2015

Egypt's stock market fell to a four-month low in early trade on Tuesday as a broad sell-off prompted by the introduction of a capital gains tax continued. Saudi Arabia’s bourse edged up.

The Cairo index fell 1.9 per cent to 8,330 points, its lowest level since December 18, as nearly all stocks declined.

Market players have blamed the sell-off on regulations issued this month for taxes on capital gains and dividends. The new rules have been criticised by the head of the Egyptian stock exchange among others; he said they were too complex. Fund managers complain they are too burdensome.

Another concern is Egypt’s continuing shortage of foreign currency, which hurts companies that rely on imports of goods, feedstock or equipment. Through administrative measures, authorities appear to have largely stamped out the currency black market, but this has made it more difficult for some firms to obtain hard currency.

The Egyptian benchmark has strong technical support at its December low of 8,125 points.

Meanwhile, the main Saudi index edged up 0.2 per cent to 9,730 points after mild profit-taking in the previous session.

Petrochemicals giant Saudi Basic Industries was one of the main supports, adding 0.6 per cent. Food maker Savola Group added 1.7 per cent.

Saudi Arabia's index faces major technical resistance in the 9,572-9,745 point area, where the 200-day average roughly coincides with the March peak.

Published on April 28, 2015
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