What the Muslim Brotherhood election means for the Egyptian economy

While certain policies of the Muslim Brotherhood candidate are certainly jarring to American observers , the stability he looks likely to bring to the country could bode well for the Egyptian economy.

The first trading day after the electoral results were announced, Egyptian bond yields plummeted to their lowest levels since the crisis began. EGPT ( quote ), the Egyptian ETF, soared 12% on both the results and the fact that no instability materialized in the wake of the announcement.

The election of Morsi brings some desperately needed positive sentiment to the Egyptian economy and markets. Firstly, because the Egyptian economy essentially ground to a halt during the Arab Spring uprising, the year-over-year comparables will make the economy's growth appear impressive, even if it somewhat artificial.

Secondly, increased stability means foreign firms will be far more likely to invest in the fledgling Egyptian democracy. Given the country's currency troubles, increased FDI is integral to the health of the Egyptian economy going forward.