Egypt’s stock market all-time high as locals hedge against inflation

Egypt’s stock market is approaching an all-time high as local investors flood to protect their savings from surging inflation.

Benchmark EGX 30 Index has soared by more than 70 percent in local currency terms since October, and it is now roughly 2 percent away from exceeding the 2018 peak.

“Egypt’s equities are acting as a hedge against very high inflation, similar to recent times in the likes of Argentina and Nigeria,” said Hasnain Malik, an equity strategist at Tellimer in Dubai, told Bloomberg on Thursday.

This phenomenon is not unusual as countries like Turkey and Nigeria, citizens are using equities as a store of value to fight double-digit inflation.

Turkey’s Borsa Istanbul 100 Index is up over 300 percent since the beginning of 2022, while Nigeria’s NGX All Share Index grew 26 percent this year.

The Egyptian index, EGX 30 is the 13th-best performer in 2023 among 92 benchmarks tracked by Bloomberg.

For local investors, the stock market represents a safe haven of sorts. These investors account for around 85 percent of the value that changed hands on the stock exchange this year, according to data from the bourse that excludes deals. Retail traders traded 40 billion Egyptian pounds ($1.3 billion) worth of stocks in July alone, higher than any other investor group during this August.

Egypt, a top wheat importer, has struggled because of more expensive food prices in the aftermath of the Russian war in Ukraine. The country’s central bank devalued the Egyptian pound three times since March 2022 and investors have said they want to see the currency weaken further before offering more financial support.