Egypt’s turmoil is having limited impact on global financial markets, where investors see few parallels with Iran’s 1979 revolution or the contagion that followed Thailand’s meltdown 13 years ago.
World equity-market capitalization climbed to $53.6 trillion this week, the highest level since June 2008, even as protests against Egyptian President Hosni Mubarak’s 30-year rule intensified and forced the nation’s bourse and banks to close for a fourth day. Dubai’s equity index rose the most in nine months yesterday and emerging-market bonds rallied, according to data compiled by Bloomberg.
While the uprising in Iran three decades ago sparked a 140 percent surge in oil and Thailand’s devaluation led to a global equity selloff, Egypt has about 0.3 percent of the world’s crude reserves and its foreign-currency holdings exceed overseas debt by $29 billion. Traxis Partners LP’s Barton Biggs says it’s a mistake to sell shares because of Egypt’s crisis, while Pacific Investment Management Co.’s Mohamed El-Erian sees signs of a “reconciliation” in the most-populous Arab country.
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