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Analysts, economists comment on Egypt market

Analysts, economists comment on Egypt market

How will Egypt’s economy and markets cope with the country’s ongoing social and political unrest? Reuters has the latest views from the regional experts.

February 7, 2011 2:29 by



Egypt’s pound was traded for the first time in a week on Sunday but the stock exchange is still closed. Following are comments from analysts and economists on Egypt’s economy, currency and bourse in light of the political turmoil:

MONA MANSOUR, ECONOMIST, CI CAPITAL

“For private investment, I don’t think investors will pull out of Egypt. It’s too early to judge that, it’s normally long-term. Maybe we’ll … see more outflow from the stock market and fixed income. We may see also higher T-bill yields. These are the short-term impacts of this crisis.”

MOHAMED SEDDIEK, HEAD OF RESEARCH, PRIME SECURITIES

“If we see over the next couple of weeks real political reform –change in constitution, freedom of establishment of political parties, things like that –that should be extremely positive because the economy was already strong.

“We have liquidity in the banking sector, we have loan-to-deposit ratios of around 54 percent, which is making people today feel comfortable withdrawing money or changing to pounds and the central bank is easing it and nobody’s really worried of runs on banks or anything.”

ANGUS BLAIR, HEAD OF RESEARCH, BELTONE FINANCIAL “The way things are looking we do not expect a run on the pound at the moment. We think that the prevailing atmosphere is a lot calmer than we might have assumed last week. We assumed some dollarization of the pound but that the system can cope.

“If you look at the GDRs trading in London last week … CIB opened at 6.10 and closed at 5.90. All the others rose during the week, all the other GDRS, so if they give an indication of demand it’s likely that the stock market will see some selling but not as much as we might have assumed last week.

“I think that each day is seeing an incremental improvement in stability. If the improvements continue like this, then it would be a near new normal by the end of the week.”

MARK RORISON, HEAD OF RESEARCH, CI CAPITAL (IN RESEARCH NOTE)

“Some stocks that have had very close ties with the regime may be affected, for example Ezz Steel and Ezz AlDekha … risks could extend to the real estate sector where land deals may be looked at again.

“Stocks which could appear interesting include Maridive with U.S. dollar revenue and Egyptian pound costs, Orascom Telecom with 60 percent of revenues outside Egypt, and Lecico which has a strong UK business benefitting from a weaker Egyptian pound.”

(Compiling by Shaimaa Fayed; Editing by David Holmes)



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