Egypt scraps plans to impose capital gains tax on dividend payments

Market Wrap: Egyptian shares decline after billionaire Naguib Sawiris said the country's proposed capital gains tax is a disaster that will hurt the stock market - with video.

How the ADX closed on June 6, 2011.

Egypt's Finance Ministry agreed to scrap a proposed capital gains tax on dividend payments, after the criticism from the billionaire Nagiub Swaris, the stock exchange and the wider financial community.

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"We are totally against it," Swiris, the founder of Cairo-based mobile phone operator Orascom Telecom Holding told Bloomberg.

Egypt's benchmark declined this afternoon after billionaire Naguib Sawiris said the country's proposed capital gains tax is a disaster that will scare people away from the stock market.

The EGX 30 Index was down 0.7 per cent to 5408.84 points.

Finance Minister Samir Radwan on June 1 announced a 10 per cent tax on dividend payments, mergers and acquisitions and asset revaluations as part of a draft budget that aims to support a widening budget deficit. Investors will not be taxed on gains from trading.

In the UAE, Abu Dhabi shares gained, led by Abu Dhabi Commercial Bank. The lender will proceed to sell its 25 per cent stake in Malaysia's RHB even after CIMB and Maybank have made bids to merge with the Malaysian lender.

The Abu Dhabi Securities Exchange General Index closed 0.4 per cent higher to 2678.04. Abu Dhabi Commercial Bank was up 2.7 per cent to Dh3.03 a share.

The Dubai Financial Market General Index was down 0.2 per cent to 1563.41.

Elsewhere in the region, Kuwait's index was up 0.3 per cent to 6312.90. Bahrain's measure lost 0.3 per cent to 1332.48. Oman's index was little changed at 6043.44. Qatar's benchmark lost 0.4 per cent to 8117.36. The Saudi Tadawul All-Share Index was up 0.3 per cent to 6647.14.