From Bansari Mayur Kamdar
(Reuters) – Investors flocked to an exchange-traded fund tracking Egyptian stocks to catch a rally in stocks, as local investors concerned about rising inflation and the possibility of a decline in the value of the currency turned to stocks.
The Van Eck Egypt Index EFT Fund tracks the MVIS Egypt Index and jumped about 19 percent last week in its best weekly performance since June 2012.
“The Egyptian (stock market) is rising more because local investors are looking for a way to hedge against high inflation, and not because of the return of foreign investors who are still concerned about the devaluation of the currency,” said Hassanein Malek, head of equity research at Tellimer.
The fund, which has net assets of $22 million, saw net inflows of $1.3 million on Thursday, its best performance in nearly seven months, according to Lipper data.
The inflation rate in Egypt reached its highest record level for the fourth time in a row in September, rising by 38 percent, which exacerbated the cost of living crisis.
The rapid growth of the money supply over the past two years has led to a sharp rise in prices, and the pound has lost nearly half its value since March 2022.
All of this indicates the need for another devaluation of the currency, but analysts are unlikely to devalue its currency before the presidential elections next December for fear of causing unrest.
However, the Van Eck Egypt Fund index fell three percent in early trading on Monday as investors’ focus shifted to the ongoing conflict between and Palestinians in Gaza on the border with Egypt.
Gaza health authorities said on Monday that Israeli strikes killed 8,306 people.
(Prepared by Rehab Alaa for the Arabic Bulletin – Edited by Ali Khafaji)
2023-10-30 17:05:00
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