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Market Report: Small gains in another day of subdued trade Egypt's stock market absorbs the conflicting reports on taxation as traders flit between high-cap firms and riskier investments
Subdued trade in high-cap firms and a spot of speculative investment in riskier sectors were the main investment strategies Wednesday as Egypt's stock benchmark edged sideways, closing up 0.28 per cent at 5,437 points. "There's no good news and no bad news in the political arena and that's what drives the larger movements," says Ashraf Abdel Aziz, head of institutions sales at Arabia Online Securities, who describes the current market as "stagnant". Recent days have seen conflicting reports about the government's introduction of a tax on capital gains and stock dividends, news which initially spooked foreign investors and forced down the EGX30. "The market has absorbed the bad news about taxation. The [EGX30] main index is only a few percent down from its highest level and investors have accepted the current uncertainty," says Abdel Aziz. Sources in the finance ministry tell Ahram Online the tax proposals are still under discussion. Of 186 listed stocks, 81 gained value and 84 declined in LE531.4 million (US$89.4m) of total equities trades, with the trading board flecked equal parts red and green. Several of the day's biggest risers were smaller firms like Misr Hotels, up 7.1 per cent, and El Kahera El Watania Invesment, up 7.05 per cent. It was a sign of individual, speculative investment, seemingly confirmed by the 0.14 per cent edging of the wider EGX70 index. Elsewhere, traders seemed to stick to what they knew, lured by the relative cheapness of shares in high-caps Citadel, Orascom Construction and Ezz Steel. Commercial International Bank (CIB) again saw top turnover, albeit far lower than Tuesday when it represented a quarter of total transactions and a large sell-off of its stock shifted the market's overall performance. It was down 0.66 per cent by Wednesday's closing bell. Basic resources led the gains, up 4.09 per cent -- a rise no other sector came close to matching -- fuelled by heavy trade in Ezz Steel, the MENA region's largest steel producer and the day's fifth most active share. Ezz itself closed up 4.6 per cent, pulling its sector up with it. Asset manager Citadel Capital saw a turnaround in its fortunes too, finishing 5.12 per cent up as rumours continued to circulate about its possible acquisition by a Dubai-based firm. Trade was almost exactly split between individuals and institutions, while foreigners pressed on with an above average share of the market. Egyptians, as ever, were the majority; reponsible for 55.6 per cent of trade and net-buyers of LE1.65 million ($277,700).