Cairo – Mubasher: The Egyptian Exchange's (EGX) indices sharply dropped in the week ended Thursday, 19 January, following strong selling pressure by Egyptians and Arabs.
The bourse recorded its biggest drop since the week ended 1 July 2016, when the EGX plunged 4.28%.
This week, the EGX slid 3.15%, shedding 417.13 points to 12,806.77 points, with the majority of the losses being seen on Thursday, when the benchmark index retreated 497.67 points amid news and rumours of the re-application of the capital gains tax on EGX trades.
Turnover during the week reached EGP 7.09 billion after 2.43 billion shares were exchanged.
On Wednesday, the International Monetary Fund (IMF) announced in a report that Egypt would begin implementing the capital gains tax on its bourse in a period not exceeding the fiscal year 2017-2018.
On Thursday, the EGX stated that it was committed to the Higher Council for Investment's decision to postpone the tax for a three-year period.
The EGX30 index neared support at 12,700 points this week, commented head of technical analysis at Roots Brokerage Sameh Gharib, adding that a break below this level would result in a larger profit-taking move.
The first resistance level at this point is at 13,150 points, he added.
During the week, the EGX70 shed 2.65% or 12.55 points to 460.55 points, while turnover on the index reached EGP 974 million with a traded volume of 250.3 million shares.
Gharib noted that the EGX70 passed the sideways channel ranging between 442 and 470 after it reached 482 points.
"However, it saw strong selling at 482, which prompted a decline. Nearest support is currently at 460 then 454," the analyst added.
Egyptian and Arab investors were net sellers with EGP 679.9 million and EGP 31.4 million, respectively this week, while foreigners were net buyers with EGP 711.34 million.
Egyptians accounted for 77.46% of this week's trades, while foreigners and Arabs made up 12.61% and 9.93% of trades, respectively.
The EGX's heaviest weighted stock CIB slipped 0.55% to EGP 75.82, during the week.
