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Thursday, 29 August 2019

Egypt sees the light of the day alongside UAE, Saudi Arabia is not as lucky

MENA fund managers are still bullish on Egypt, UAE: Six out of 10 MENA fund managers polled by Reuters said they plan on increasing their exposure to Egypt, and five said the same about the UAE. Both countries’ markets have performed well this year: The EGX rose 9.56% in 2019, outperforming most regional peers, while Dubai and Abu Dhabi’s benchmark indices have risen 8.76% and 4.39% this year, respectively. On the flipside, nearly two-thirds of the fund managers said they plan on decreasing their allocations in Saudi Arabia.

Egypt’s rate cuts, cooling inflation drive investor sentiment: The fund managers surveyed pointed to Egypt’s inflation figures dropping to a four-year low and the CBE’s decision to cut benchmark interest rates last week as positive indicators. “We believe [falling interest rates] could channel liquidity out of the fixed income market into the equity market as the carry trade of Egyptian treasuries becomes less attractive,” said Rasmala Investment Bank portfolio manager Vishal Gupta.

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