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.