Investors to view Egypt as attractive market

Investors who swiftly withdrew around $20 billion from Egypt two years ago, now view the country as one of the most attractive emerging markets, as per a Bloomberg report on Thursday.

Egypt’s recent currency devaluation and record interest rate hike, supported by an expanded IMF loan and significant commitment from the UAE, have changed the perspective of major investors.

With Egypt offering the third-highest yield on local-currency bonds among developing economies and the local bonds gaining investor attention, there’s a shift towards investing in Egypt’s local assets.

“The next trade probably is Egypt local,” suggested Nick Eisinger, co-head of emerging-market fixed-income active at Vanguard Asset Services. “Now that the foreign exchange rate is cheaper, rates have risen, and the funding outlook is stronger, and not many people own Egypt local, we would buy local.”

Despite challenges such as the ongoing regional unrest and high inflation, authorities are banking on reforms to attract foreign investors and improve the country’s economic situation.

Moreover, the IMF agreement and investment deals with the UAE are seen as crucial steps in accessing global capital markets again.