Egypt Financial Services

Investor interest in Egyptian bonds and shares is on the rise as greater political stability and signs of economic recovery help stimulate confidence in the country.

Banks may have to adopt a policy of caution over the coming months, waiting to see how the dust settles from Egypt’s long-running political turmoil and how the installation of Mohammed Morsi as head of state will affect the economy and their business.

Renewed confidence in the medium- and long-term outlook for Egypt’s economy is buoying its capital markets, with stocks up strongly in 2012 and bond issues attracting plenty of interest. In spite of lingering political uncertainty, good growth prospects, a large and growing domestic market, and likely backing from the IMF are all helping to restore much-needed investor confidence.

Although a number of Egypt’s largest banks posted notable growth during the turbulent first half of 2011, the second half may prove more challenging as tourism, investments and fund flows continue to decline.