Egypt shares climb after Sisi presidential bid

Egypt-listed shares rose on Thursday after the country’s former army chief said he will run for president.

The announcement that Abdel Fattah al-Sisi will run for office was widely expected, but is still seen adding stability to a market hit by upheavals since the 2011 ouster of former president Hosni Mubarak.

The country’s benchmark index, the EGX30, was up by 0.52 percent by 11.05am, according to bourse figures.

John Sfakianakis, chief investment strategist at MASIC, a Riyadh-based investment company, said traders in Egypt are likely to react positively to the news.

“There is no more speculation now; it’s a fact,” he said. “The market sees moves of that sort as stabilizing factors… The worst is behind us in the case of Egypt.”

Egypt’s benchmark stock index has risen by more than 25 percent this year, the region’s second best-performing market after Dubai.

“The market has been doing quite well over the last several months. It has been outperforming. So I think that it will continue to do so.”

Despite that, Sfakianakis said that the market had to a certain extent already priced in the likelihood that Sisi will run for president.

Assuming Sisi wins his bid, as is widely expected, his immediate economic challenges include currency stability and addressing the balance of payments, Sfakianakis said.

“They need to bring confidence in terms of foreign investors. And down the road, there is the issue of inflation and job creation”.

It emerged earlier this month that the UAE-based construction firm Arabtec had signed an agreement to build developments worth $40bn across Egypt, in a deal endorsed by Sisi.

Sfakianakis said the Arabtec deal was “not a one-off”, adding that he foresees other deals of a similar magnitude to follow.

“You will see, when there is an opportunity, other Gulf companies getting involved,” he said. “The Gulf countries – with some exceptions – want to see the current government succeed.”