It might be because of increased confidence in the country’s economic management, or it might be because of cheaper shares after two devaluations. Whatever the reason, there has been a buying frenzy on the Egyptian Stock Exchange since the end of October.
This has been seen in the jumps in the market’s main index the EGX30 in recent weeks. This closed at 12,770 points on Monday, its highest level since March 2020 and the outbreak of the Covid-19 pandemic. It is now almost 50 per cent higher than its lowest level this year in July, and it has gained 18 per cent since October’s devaluation.
According to calculations by the US financial service Bloomberg, the EGX30 has been the best-performing benchmark globally since last month’s devaluation, which came one day before Egypt said it had reached a financing deal with the International Monetary Fund (IMF) after almost eight months of negotiations.
It is hoped that the $3 billion deal will shore up the economy, which has been hard hit by the repercussions of the war in Ukraine. The drying up of the country’s foreign-currency resources, with portfolio investors fleeing the emerging markets in pursuit of dollars and the subsequent inflated imports bills, was a cause of concern that weighed on market transactions.