The Egypt exchange traded fund surged almost 9% Tuesday amid heavy trading volume on hopes that the country will make a fluid transition to civil rule with an elections timeframe and a potential financial aid package.
The Market Vectors Egypt Index Fund (NYSEArca: EGPT) increased 8.6% Tuesday. EGPT is still down 20.2% year-to-date.
The interim head of state Adli Mansour expects parliamentary elections within six months, with a presidential election to follow, reports Nadia Saleem for Reuters.
“As steps towards forming a new government take place, it reflects positively on investors’ sentiment,” Mohamed Radwan, director of international sales at Pharos Securities, said in the article.
However, the political instability has pushed foreign investors away.
“Foreigners will shy away,” Radwan added. “With all the violence, it’s difficult to convince them to put money in the market.”
Additionally, Egyptian markets were supported by prospects of a financial aid package of $1 billion and a $2 billion loan from the United Arab Emirates and another $2 billion from Saudi Arabia.
Egypt has been rocked after massive protests centered around former president Mohamed Mursi up until a forced military removal. [Egypt ETF Rocked by Protests]
Egyptian stocks experienced similar volatility induced by political instability during the Arab Spring when former President Muhammad Hosni resigned in 2011.
Market Vectors Egypt Index Fund
For more information on Egypt, visit our Egypt category.
Max Chen contributed to this article.