The global economy was rocked last Friday morning in the wake of the UK’s referendum result, which will lead to Britain’s eventual exit from the European Union. The ripples from the outcome of Brexit reached as far as Egypt, where in the opening two minutes of the business week the national stock market plunged to a staggering $1.5 billion loss.
Egypt operates on the Islamic work week from Sunday to Thursday, and therefore the results of Friday morning’s Brexit referendum had a delayed impact on the national stock market. After the initial 120 second freefall Sunday morning, the loss slowed in pace yet continued – the end of day totals indicate that over $42 billion was lost on the first day of trading. Though the economic shock was felt around the world, other countries were able to weather the storm better than Egypt. In the Arab Gulf, countries like Saudi Arabia and the UAE suffered losses in the investment market, but were able to rebound slightly.
Some analysts are reporting that the Gulf countries may even be in a position to capitalize on a weakened British Pound provided they are willing to gamble on the uncertainty of the coming months.
For Egypt, it is a continuation of the uncertainty the country has experienced since the 2011 Arab Spring. The financial and political situation in Egypt has been dire in recent years, with both the economy and the government in a state of disarray. The former has stalled and subsists largely on foreign aid, while the latter has made headlines for systemic corruption.