Tax boost lifts Egypt traders; most Gulf markets dip

DNE
DNE
3 Min Read

CAIRO/DUBAI: Egypt’s index, EGX30, rose for a first session in four after the government said it would not tax profits on stock and bond market trades.

Most Gulf Arab markets slid, tracking declines on global markets over the weekend as weak U.S jobs data spooked investors.

Egypt’s index, EGX30, climbed 1.6 percent. Pioneers Holding surged 8.4 percent. Palm Hills rose 2.8 percent and Orascom Construction gained 2.1 percent.

The benchmark made its largest drop in six weeks on Thursday after the government announced a 10 percent tax on capital gains and a 5 percentage point increase in the income tax levied on corporations and individually owned companies.

"It seems that trading activities shall not be included in the capital gains tax — I think that’s a relief for retail clients and short-term speculators," said a Cairo trader.

After market hours, the International Monetary Fund (IMF) agreed a $3 billion financing deal with Egypt and praised the policies of an interim government struggling to stabilize the economy after the popular uprising.

Qatar’s measure slumped to an 11-week low. Al Khaliji Commercial Bank fell 7.1 percent, slumping to a 2011 low after the lender said a proposed merger with International Bank of Qatar (IBQ) would not proceed. IBQ is not listed

Heavyweights Qatar National Bank and Industries Qatar each slipped 0.9 percent.

"We are frontier emerging markets and risk comes off when global markets are negative," said Ibrahim Masood, senior investment officer at Mashreq Bank. "The international backdrop doesn’t look very pretty. We have already seen activity drop.

"A sluggish, negative week unfortunately is what we are looking out for, but we don’t see any big reason for panicking."

Wall Street capped off a fifth straight week of losses on Friday and Treasuries rose as much slower-than-expected US job growth stoked fear that the world’s largest economy was in a protracted slowdown.

Elsewhere, Kuwait’s index fell 0.8 percent to its lowest close since April 3.
National Bank of Kuwait and National Mobile Telecommunications Company (Wataniya) dropped 1.7 and 3.1 percent respectively.

Oman’s index halted a four-session winning streak, ending an early-June rebound after dropping 5.2 percent in May.

Renaissance Services fell 1.4 percent and telecoms operator Nawras shed 1 percent.

 

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