While the markets have been gripped by volatility and are slipping back toward correction territory, the Egypt country-specific ETF has outperformed.
The VanEck Vectors Egypt Index ETF (NYSEArca: EGPT) was the single best performing ETF of the past month, rising 14.4%. In contrast, the S&P 500 declined 3.9%.
EGPT has surged 19.3% year-to-date and increased 38.6% over the past year.
Egyptian markets have strengthened and experienced one of their best months in March since 2016 due to a relief trade on the back of heightened political risk. Market observers anticipate broad reaching economic reforms as Abdel-Fattah El-Sisi was expected to clench the presidential election.
The Egyptian EGX 30 has risen over 40% since the beginning of 2017 amid bullish sentiment fueled by sweeping economic shifts spearheaded by the government under El-Sisi, including a $12 billion International Monetary Fund loan, Bloomberg reported.
El-Sisi narrowly missed a 100% vote in Egypt after securing a 97% win rate after final results were revealed.
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Minister of Finance Amr el Garhy said Tuesday that the second term in office of President El-Sisi will see a strong economic performance, Egypt Today reports.
Garhy stated his ministry is working to reduce the budget deficit to 4% by 2022 and the government is going ahead with its economic reform program.
Beyond the potential reforms, economists also predict Egypt’s economy will continue to strengthen.
“While the market consensus is already very positive on Egypt, we see a range of factors continuing to drive the stocks higher, including macroeconomic repair and fiscal cuts under the IMF’s supervision, and GDP growth from gas production and tourism recovery. This will help to reduce the current account deficit too,” Hasnain Malik, head of equities research at Exotix Capital, told Bloomberg.
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