Egypt shares rose the most in a week on speculation the recent drop was overdone as the exchange said a government plan to impose capital gains tax applies only to dividend distributions and not to profit from stocks trading.
Orascom Construction Industries (OCIC), Egypt’s biggest publicly traded property builder, jumped 2.5 percent. Commercial International Bank Egypt SAE (COMI) advanced the most in almost a week. The EGX 30 Index (EGX30) gained 1.6 percent, the most since May 29, to 5,447.70 at 1:04 p.m. in Cairo. The measure slumped 2.7 percent on June 2 after the government unveiled the capital gains tax on dividends and higher corporate tax bracket to rein in the budget deficit. In the Persian Gulf, the Bloomberg GCC 200 Index (BGCC200) declined 0.3 percent.
“The negative effect we saw last week from the capital gains tax announcement was very short-lived because the market is still trading at a discount and small investors now see that their trading profits will not be affected,” said Ashraf Akhnoukh, senior equity sales trader at Cairo-based Commercial International Brokerage. "There still remains a growth story here.’’
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