The deadliest terrorist attack on Egypt in its modern day history will not driveinvestors out of the market, Renaissance Capital’s MENA CEO Ahmed Badr tells Bloomberg in an interview. While some foreign investors may shy away from new exposure to Egypt for the time being, “I don’t think we’re really going to see money coming out of Egypt significantly on the back of this [attack],” he said. “Egypt is the strongest reform story we have in the region at the moment and it’s actually starting to deliver results,” Badr added, pointing to strong results across the board in the earnings season just ended. The EGX rose 0.8% on Sunday and closed the day flat yesterday, seemingly unaffected by Friday’s terrorist attack on a North Sinai mosque that left more than 300 dead in its wake. Market activity, however, was largely driven by local investors, who “at this point have basically accepted that northern Sinai is going to remain unstable,” Badr said. “Thick skin might be one way of putting it but investors have accepted the fact that this is more of an isolated territory…and it shouldn’t have an effect on the fundamentals of the market.”

Total turnover on the EGX rebounded yesterday to EGP 1.5 bn, or about 50% above the trailing 90-day average, after posting an anemic EGP 833 mn on Sunday.

Badr’s sentiments were shared by several economists who spoke to veteran journalist Patrick Werr for Reuters. They take the view that the attack may only strengthen the notion that the country needs continued IMF support as agreed a year ago and the economy is likely to quickly shake off any negative repercussions. Tourists and investors seem unlikely to be deterred by the attack, said Arqaam Capital’s Reham El Desoki. “It’s so far away from South Sinai. There have already been other terrorist attacks in northern Sinai and they haven’t impacted European tourism or any other sort of tourism,” she added. A spokesman for Thomas Cook said that there had been no noticeable impact from the attack on demand for holidays in Egypt and that sales to Egypt on Monday were trending ahead of last year’s sales.

“The Sinai incident will likely underpin the IMF board view that Egypt needs continued support still further,” Pharos Holdings COO Angus Blair said, adding that the IMF board meeting is certain to approve the next USD 2 bn disbursement of the USD 12 bn IMF Extended Fund Facility in December. One of the key issues the board must consider instead will be whether Egypt implements a planned increase in energy prices early next year or next summer, said El Desoki.