Foreign investors return as Egypt’s stocks hit record highs

• Retail trading powers rally
• Consolidation phase expected
• Stable pound boosts confidence

Surging retail trading and increased foreign institutional activity are powering a renewed stock market rally in Egypt.

The blue-chip EGX30 and wider EGX100 measures are up 30 and 56 percent this year respectively to Wednesday’s close, despite a slight pullback after hitting milestone highs on Sunday and Monday.

“I’d expect further profit taking and for the market to be in a consolidation phase over the coming weeks, but it should then rally further because large-cap companies are undervalued – both compared with their fair value and with regional market peers,” said Ahmed Abou El Saad, CEO of asset management company Azimut Investments – Egypt.

Egypt’s bourse, which has a market capitalisation of EGP4.2 trillion ($83 billion), looks cheap on a trailing price-to-earnings basis. Its PE ratio was 10 as of August 17, below those of the likes of Saudi Arabia (16.5), the UAE (13) and Morocco (22), according to financial website Simply Wall St.

Turnover in the first seven months of 2026 totalled EGP1.2 trillion, up 86 percent year-on-year, while the number of shares changing hands rose 31 percent and the number of trades increased 81 percent over the same period, according to AGBI calculations.

Egyptian investors were net buyers of about EGP19 billion of Cairo-listed equities in the first seven months of this year, bourse data show.

“Tech has played a pivotal role in expanding financial inclusion, with the number of Egyptians trading stocks increasing dramatically,” said El Saad.

Retail investors now dominate market turnover and there has been a shift from keeping money in banks to investing in stocks, he said.

“The interest rate on savings accounts isn’t sufficient to protect against inflation, so Egyptians are seeking bigger returns through equities.”

Retail investors’ pre-eminence helps explain why the EGX100, which is up 88 percent during the past 12 months, has outperformed the EGX30. The latter has gained 51 percent over the same period.

“Institutional investors focus on blue-chip companies with strong fundamentals, while retail investors prefer small-cap companies with low free-floats whose share prices are easier to move,” said El Saad.

Egyptian listed companies’ combined earnings have risen by an average 38 percent a year over the past three years, Simply Wall Street estimates, bolstering their appeal to non-Arab foreign institutions.

Such investors were net buyers of EGP1.4 billion of stocks in July, accounting for 5 percent of bourse turnover.

“Foreign inflows into Egyptian stocks are increasing,” said Julian Bruce, managing director of EFG Hermes’ UAE brokerage.

Bruce said that Western investors previously held only Commercial International Bank, a blue chip financial institution, as a proxy for the Egyptian economy. “But now there’s interest in several other companies,” he said.

These include real estate developer TMG Holding, vehicle manufacturer GB Corp, Telecom Egypt and Fawry for Banking Technology and Electronic Payment, said Bruce.

“Foreigners who have been absent from the Egyptian market for quite a number of years are now starting to return,” added Bruce.

The Egyptian pound has fallen 4.6 percent versus the dollar during the past 12 months. This relative stability, despite becoming more of a free-floating currency – the pound fell 82 percent from 2016 to 2024 following a series of managed devaluations – has boosted foreign investor confidence in the country’s stock market, El Saad said.

“The bourse is working hard to introduce short selling and derivatives, which should boost market turnover considerably,” he added.

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