EGX hits 18-month low

Wednesday 05 December 2018 02:54 PM

EGX Building
EGX Building

Egypt’s blue-chip index slumped to an 18-month low on Tuesday, weighed down by Commercial International Bank (COMI) and concern over a proposed law on taxation of Treasury holdings, while Abu Dhabi rose on banking sector gains.

The Egyptian index dropped 2.4 percent, with 26 of 30 stocks falling. The country’s biggest lender, COMI, fell for a third straight day, losing 2.5 percent.

COMI and the index have been dented by the proposed legal changes, which could result in a larger tax bill for banks on despite the nominal tax rate remaining unchanged, said Amr Hussein Elalfy, head of research at Shuaa Securities Egypt.

All banking stocks in the index dropped. Several banks have issued statements on the legal changes, with COMI saying they would apply to new Treasury bonds with no retrospective effect and that the tax rate on earnings from Treasuries would stay at 20 percent.
Exchange data on Tuesday showed foreign investors were net sellers of Egyptian stocks, along with Arab investors.