Reinvesting in Egyptian Markets is a question of timing

Egypt-protestInvestors’ flight from Egyptian investments could create re-entry opportunities, if stability returns. The test will be managing the timing of the investment.

One of the credit analysts at Standard & Poor’s, Kai Stukenbrock, explained that “The events in Egypt seem to be accelerating and, as was the case in Tunisia, when these things start going, the uncertainty increases.”

Many investors are likely to stay away until they see that the political situation stabilizes, said Angus Blair, the head of research at Beltone Financial, a Cairo-based investment bank.

Egypt’s benchmark EGX 30 declined 11 % in Thursday’s trading. If the stock market opens on Sunday, Analysts expected it to continue its rapid decline.

Investor nervousness was obvious in the cost of insuring against sovereign default. This cost rose 50 basis points in one hour on Friday, as news reports poured in that some police were throwing away their uniforms when confronted by protesters.

On Friday, the rating agency, Fitch, revised its rating on Egypt from stable to negative.