Egypt Stocks Have Best Month Since 2016 With No Election Noise

(Bloomberg) -- Stocks in Cairo posted their best month since the decision to lift currency controls in 2016, buoyed by investor expectations that the government would press ahead undaunted with sweeping economic reforms following Abdel-Fattah El-Sisi’s expected re-election as president.

The EGX 30 rose for four straight sessions as of Thursday, extending its gain this month to 13 percent. That’s the best monthly increase since the Egyptian pound was floated freely in November 2016, spurring a rally in shares. The benchmark has now climbed for seven weeks in a row, the longest streak of weekly gains since August 2014.

The Egyptian gauge has risen 41 percent since the beginning of 2017 amid bullish sentiment fueled by sweeping economic shifts spearheaded by the government under El-Sisi, including securing a $12 billion International Monetary Fund loan. Preliminary results of the presidential election held this week gives El-Sisi 92 percent of the vote for a re-election, versus 3 percent for his only opponent.

“While the market consensus is already very positive on Egypt, we see a range of factors continuing to drive the stocks higher, including macroeconomic repair and fiscal cuts under the IMF’s supervision, and GDP growth from gas production and tourism recovery. This will help to reduce the current account deficit too,” said Hasnain Malik, head of equities research at Exotix Capital in Dubai.

To contact the reporters on this story: Filipe Pacheco in Dubai at fpacheco4@bloomberg.net, Tamim Elyan in Cairo at telyan@bloomberg.net.

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Blaise Robinson

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