Credit Suisse raised its rating on Egyptian equities to "neutral" from "underweight," but cautioned that a myriad of political and economic uncertainties continue to persist.
The brokerage said a successful referendum on constitutional change, and the re-opening of the stock market has improved its outlook on Egyptian equities.
However, the brokerage does not believe current valuations are attractive relative to emerging market peers.
This year, Egypt's stock market was closed for more than seven weeks during the protests that ousted President Hosni Mubarak, reopening only on March 23. The benchmark index has lost 12.6 per cent so far this year.
Given that earnings growth forecasts are still very high, earnings expectations for Egyptian companies are likely to come down following the most recent snap recession, the brokerage said.