Sunday trade was out of the ordinary given the noted return of confidence among equity investors in the Arab World's most populous country. Orascom Construction Industries (OCI), the stock with the heaviest weighting, masked a more positive current, led by the likes of private equity giant Citadel Capital, which jumped five percent.
Notwithstanding the pervasive political uncertainty, the EGX30 has in fact gained 13.5 percent over the past month. Volumes are on the rise, and on Sunday, foreign investors were net buyers. The Market Vectors Egypt ETF, one of the most popular ways for US investors to gain exposure to Egypt, will get a chance to react to the latest developments on Monday.
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There are encouraging signs. A new cabinet has assumed its tenure, packed for the most part with prominent civilian technocrats to steer the state's transition to new elections, and vitally for most Egyptians, revive a crippled economy.
Aid pledges from the oil-rich Gulf amount to $12 billion so far, a last-minute lifeline to avert a looming balance-of-payment crisis. The new Finance Minister, Ahmed Galal, said late last week that the money would be used to boost reserves and push stimulus, rather than austerity policies. Depleting foreign currency reserves of the Central Bank also get a lift, reflected early on by a marginal strengthening of the local currency in recent days.
The long-touted IMF loan talks, continually pushed back, appear to have been put on hold indefinitely. From the IMF's perspective, the interim government does not have the requisite legitimacy and recognition, and for Egyptian policymakers there is no longer a sense of urgency with external financing emanating from the Gulf.