Zhou Enlai famously advised Henry Kissinger it was too early to conclude on the outcome of the French Revolution. Little wonder, then, that the economic contours of the new Egypt are still fuzzy two months after Hosni Mubarak was topppled.
Citigroup’s Egypt economics team argue in a report out Monday that while democracy should be a boon for the country in the long run, political recriminations and economic populism put it at risk of stagflation in the short run. Investors should be wary of the newly reopened EGX and be underweight Egypt in GEM portfolios.
The FT’s Gideon Rachman notes in his column on Tuesday, Egypt’s increasingly fragments politics and robust foreign policies are worrying the west (bless). FT Tilt’s Tom Gara has been keeping an eye on the investigations into Mubarak-era corruption and privatizations. Retributive justice is ensuring a risk premium across Egyptian equities.
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