Egypt's Peace Economy Comes of Age

O'Sullivan, Edmund, MEED Middle East Economic Digest

It is noon on the Cairo stock exchange and the market is up once again. Competition for shares is intense this October, and on the floor of the exchange a shouting match breaks out between two brokers. It quickly subsides. After all, this is El-Sherifein Street, not Manhattan. Here, there are no vanities to burn and everyone is a winner in the first Egyptian stock market boom for almost half a century.

Eager investors crowd the lobby of the exchange, or squeeze into its coffee shop where a giant screen shows that every transaction is driving the market higher. There has not been excitement like this since Egypt qualified for the World Cup soccer finals in 1990.

Cairo stock exchange vice-president Nassif Nazmey surveys the scene, eyes sparkling with pleasure. His aviator spectacles, floral trouser suspenders and cigar are pure Wall Street. But the charm and wit are thoroughly Egyptian. A broker since 1958, Nazmey is witnessing something few believed would happen. Investing in Egyptian shares is back in fashion.

The record shows that in the week to 13 October the Egyptian stock market rose by 10 per cent and is now more than twice the level it was at the start of 1993. This is a stunning development in what was once a capital market backwater. It has made the emerging markets industry wake up to the change sweeping the Egyptian economy in general and its securities markets in particular.

Peace dividend

Many factors have contributed to the new mood on the Nile. The debt forgiveness Egypt won for its support for the anti-Iraq coalition in the 1990/91 Kuwait crisis eased a burden that threatened to crush the life out of a faltering economy. Handshakes in Washington between Israeli, Palestinian and Jordanian leaders have convinced a growing number of investors that a comprehensive Arab-Israel settlement and a huge Middle East …

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Publication information: Article title: Egypt's Peace Economy Comes of Age. Contributors: O'Sullivan, Edmund - Author. Magazine title: MEED Middle East Economic Digest. Volume: 38. Issue: 43 Publication date: October 28, 1994. Page number: 2+. © 1999 MEED Middle East Economic Digest. All Rights Reserved. COPYRIGHT 1994 Gale Group.

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