Egypt’s stock market rose to a record high as investors sought refuge from escalating inflation, which has been exacerbated by multiple currency devaluations and the global repercussions of Russia’s invasion of Ukraine.
On Sunday, the EGX 30 Index recorded a remarkable 1.7% increase in trading, extending its bullish streak to surpass the peak it achieved in 2018.
When measured in local currency, the index has soared by an astonishing 91% since hitting a low point in October.
Even when measured in dollars, it has managed to achieve a 1.8% year-to-date increase, outperforming the MSCI Emerging Markets Europe, Middle East, and Africa Index.
The Egyptian stock market has emerged as a haven for investors in Egypt, a nation heavily reliant on food imports and adversely affected by the Ukrainian conflict.
Supply disruptions due to the war and three devaluations of the Egyptian pound since early 2022 have collectively contributed to a record-breaking annual inflation rate of 36.5% in July.
It is widely anticipated by investors and analysts that another devaluation is on the horizon.
However, this prospect largely depends on Egypt’s government’s ability to secure sufficient foreign currency reserves, which could be obtained through state-asset sales, to clear the backlog of imports and facilitate a well-structured adjustment.
Also, Egypt is anxiously awaiting an International Monetary Fund review of a $3 billion loan program that was agreed upon last year.
As Egypt navigates these economic challenges, its stock market remains a beacon of hope for both domestic and international investors, showcasing its resilience in the face of adversity.