EGX rallies nearly 5% on news we reached a preliminary agreement for more IMF funding: The EGX30 rose 4.6% in heavy trading yesterday after the International Monetary Fund (IMF) announced on Friday it had reached a staff-level agreement to provide Egypt with a one-year, USD 5.2 bn loan. The benchmark index is now down 20.4% for the year, largely in response to the pandemic’s economic fallout and a shutdown of the tourism industry, Reuters notes.

Biggest gainers: The EGX30’s top performing companies were Pioneers Holding (+8.6%), EFG Hermes (+8.2%), and TMG Holding (+6.2%). Trading was heavy, with EGP 1.4 bn-worth of shares changing hands, about 89% above the trailing 90-day average.

The announcement of the standby agreement with the IMF also helped slow the USD’s rally against the EGP, which was was changing hands at 16.17 against the greenback yesterday, inching up two piasters from 16.15 / USD 1 on Thursday, according to CBE data (pdf). The EGP had held steady at 15.70 throughout the onset of the covid-19 pandemic, after peaking at 15.49 on 23 February.

What to expect from the IMF loan: The loan, which still needs a final sign-off from the fund’s executive board (expected some time this month), would come in the form of a stand-by arrangement (SBA) to help withstand the economic fallout from the covid-19 pandemic and safeguard Egypt’s recent economic gains and reform program. It comes on top of the USD 2.8 bn rapid financing instrument Egypt received last month to help plug in the budget gap and support temporary spending to fight the pandemic.