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Wednesday, 22 January 2020

Investors are finding bright spot in Egyptian stocks despite 'Trump slump': Bloomberg

The nation’s benchmark stocks gauge is the world’s best performer since Trump's win, returning more than 20 percent in dollar terms

Thursday 17 Nov 2016
Egyptian Pound
Egyptian Pound (photo: Reuters)
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Egyptian stocks are the best performers in 94 exchanges worldwide in dollar terms since 8 November, according to a Bloomberg report on Wednesday titled "World-Beating Egypt Stocks Defy Trump Slump as Foreigners Return".
 
The US based market analysis agency said that Investors are finding a rare bright spot in Egypt, amid the emerging-market rout which has followed the election of Donald Trump as president of the United States.
 
According to data compiled by Bloomberg, Egypt's benchmark stocks gauge is the world’s best performer since the US presidential election vote, returning more than 20 percent in dollar terms.
 
On 3 November, Egypt's central bank floated the pound and raised key interest rates by up to 20 percent, as part of a set of reforms aimed at alleviating a dollar shortage and stabilizing the country's flagging economy.
 
The Central Bank issued its decision to liberalise the exchange rate as part of a government reform programme that aims at "trimming the budget deficit and cutting public debt."
 
The bank said there will be no limits on foreign currency deposits or withdrawal for both individuals and firms. However, it said, a previous cap of $50,000 in cash deposits per month and $30,000 in withdrawals per day for importers of non-essential goods will remain in place.
 
Following the flotation decision, Egypt issued on  $4 billion in bonds on the Irish Stock exchange, in an attempt to create new financing sources to plug the country's widening budget deficit, according to statement by the ministry of finance.
 
The International Monetary Fund (IMF) and other international financial bodies welcomed the decision by Egypt's central bank to float the country's pound.
 
On Friday, Egypt received an initial $2.75 billion tranche from the IMF, following the board’s approval for Egypt’s $12 billion loan. 
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