Egypt’s Second Revolution may not have happened, but what did materialize was a large demonstration against the way the Supreme Council of the Armed Forces (SCAF) is handling the transition to a civilian-led government.
There was a considerable degree of trepidation on Friday, as thousands of Egyptians streamed into Tahrir Square. It served as a reminder of how watchful the public is of the SCAF, who have reaffirmed their commitment to holding elections later this year.
But by the middle of the next day, protestors had gone home, traffic jams reappeared, along with wildly gesticulating police officers and citizens going about their business in a no less uncertain post-revolutionary world.
The Egyptian Stock Exchange (EGX30) jumped 2.5 percent when it opened for the trading week on Sunday. Add the plethora of foreign aid pledges to the equation, and the excitement becomes understandable.
The market managed to extend the eight-week-high on Monday, but this time foreign investors tended towards selling. On the other side of the world, the Market Vectors Egypt ETF closed a 0.2 percent lower on Friday.
The pledge that emerged from the G8 summit in Deauville sees international development banks supplying $20 billion in aid to Tunisia and Egypt for 2011-2013. That is in addition to bilateral support.
The United States had earlier said it would relieve Egypt of up to $1 billion in debt and guarantee another $1 billion in borrowing. Saudi Arabia has promised $4 billion, now Qatar confirmed its interest in investing $10 billion in the Arab world’s most populous country.
“We’re seeing a direct reflection in the market, especially on the back of the Qatari pledge”, Osama Mourad, CEO of ArabFinance Brokerage, told CNBC. He explained that many market players anticipated that a lot of these investments would go into real estate, hence their performance this week.
“The rally is probably going to continue for the rest of the week, but then we’ll have to take a breather, since the market is getting closer to pre-revolution levels,” Mourad said.
Apart from helping meet the country’s financing needs, the pledges also serve to underscore the regional significance of a stable Egypt.
Angus Blair, head of research at Beltone Financial, agrees that it has provided some “good news” for the stock market and helped firm the Egyptian pound.
“These pledges should bolster confidence for some time, although there is still much to do to boost Egypt's economic growth, private sector investment and foreign direct investment (FDI), and to also bring down the unsustainably high levels of food price inflation specifically,” Blair told CNBC.
The IMF sees economic growth in Egypt, an emerging market, falling to 1 percent this year. In its latest attempt on Sunday, Egypt's central bank sold 4.975 billion Egyptian pounds ($836 million) domestic treasury bills, with yields declining marginally. It was less than the 5.5 billion pounds it was seeking.
Meanwhile, author Thomas Friedman, in a column in the New York Times on Saturday, said he hoped the current US administration understood that “right now — right this second — Egypt needs something more from Washington than money: quiet, behind-the-scenes engagement with Egypt’s ruling generals over how to complete the transition to democracy here”.