Global selloff hits as Egypt stock market, currency slide
TLDR
- Egypt's stock market and currency slid due to global equity sell-off, political tensions, and financial concerns.
- Foreign investors sold Egyptian pound treasury bills, converting to dollars for safety amid uncertain global conditions.
- Despite global market fluctuations and geopolitical risks, Egypt's frontier market is demonstrating relative resilience, according to Goldman Sachs analyst Farouk Soussa.
Egypt's stock market and currency slid on Monday, impacted by a global equity sell-off, regional political tensions, and concerns about government finances, according to bankers and analysts.
Foreign investors sold Egyptian pound treasury bills and converted the proceeds to dollars, seeking safer havens, the analysts and bankers reported. The benchmark stock exchange EGX30 indicator dropped by 2.33% to 27,841, while the Egyptian pound weakened by one percent to 49.20 to one dollar.
"Global markets are currently repricing sharply on speculation around deeper than expected Fed rate cuts and rising geopolitical risk in the Middle East, but frontier markets like Egypt are showing relative resilience, despite being somewhat affected," said Farouk Soussa of Goldman Sachs.
Key Takeaways
More than $1 billion changed hands in the interbank foreign exchange market as banks sought to provide dollars to investors looking to withdraw funds from Egypt. Foreigners had invested billions of dollars in the treasury market following Egypt's sale of development rights to the prime Ras El Hekma region on the Mediterranean coast for $35 billion in February and the signing of an $8 billion financial support package with the International Monetary Fund in March.
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