After losing half their value last year, Egyptian equities have soared in 2012. They ranked top among EMs in January, buoyed by the peaceful outcome of demonstrations on the first anniversary of the anti-Mubarak uprising.
But after Wednesday’s shocking soccer riots, which left 74 dead, the benchmark EGX 30 dropped as much as 4.6 per cent on Thursday. Could the violence halt Egypt nascent recovery? Citigroup is optimistic that it won’t.
Middle East equity strategist Hasnain Malik said Egyptian equities had reacted to Wednesday’s soccer riots – but argued the country’s political risks have already peaked. Indeed, a strong response by authorities to secure law and order could reassure investors.
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