Egypt shares, yields to depend on IMF talks

The mood of Egypt's financial markets is likely to depend heavily next week on the government's progress in securing a $4.8 billion loan from the International Monetary Fund.

An IMF team is expected to come to Cairo for talks after the Eid al-Adha holidays, which run from this Thursday through Sunday, according to Egyptian and IMF officials.

IMF Managing Director Christine Lagarde was quoted by Egypt's MENA news agency in Washington as saying she was "optimistic that the loan negotiations would be completed by mid-November".

A loan deal would for the time being lay to rest lingering concern in the markets that Egypt might run out of foreign reserves to support the value of its currency. Reserves have dropped by more than half since the start of last year.

But well before any loan agreement is reached, markets will be sensitive to any indications from the talks of whether the IMF is satisfied with Egypt's plans for economic reform.