Luxembourg-based Egypt Fund witnessed a huge run-up in stock prices over the past six months in the Egyptian market as the war in Iraq proved short-lived and tourism receipts recovered quickly.
The rapidity with which the sector responded demonstrated its flexibility and its ability to cope with significant shocks. Since then, Egypt's balance of payments situation has improved considerably and tourism revenues have rebounded, stated press release.
During 2003, the government implemented a number of reform initiatives designed to spur economic growth. The Egyptian pound floatation as well as the approval of the new banking law laid the groundwork for an improved monetary environment. Furthermore, the latest
economic data shows improvement on the balance of payments on the back of rising export revenues, fast recovery in tourism, as well as record Suez Canal receipts.
The market continued the strong rally, which began in the spring, with the IFC Investable Egypt Index gaining 61 percent in US dollar terms, over the past six months, while Egypt Trust under performed the IFC Investable index by 42.4 percent, rising 18.6 percent. The Manager attributes the underperformance to the Trust's investment restrictions which limit maximum active exposure to 10 percent of net assets and the top five stocks in the IFC Investable Egypt Index represent 84 percent of the index, whereas the most they could represent in the portfolio is 50 percent.
The Egypt Trust Fund was incorporated in Luxembourg in 1996 for an indefinite period. The fund's investment objective is to achieve medium to long term capital growth through investment principally in the equities of companies listed on the Egyptian Stock Exchange, aiming to capitalize on low valuations and benefiting, in the short-term, from the high dividend yields currently available in the Egyptian market. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
