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It’s bit been quite disconcerting and disappointing to read, press release after press release, that Egypt’s stock exchange persists on delaying its re-opening.

Expensive Escapism

Unfortunately, though the intention might have been to increase stability and confidence, the reality is: lack of price discovery, especially during volatile periods, is too costly a reality. In Egypt’s new development; the one thing least affordable, at the moment, are added costs.

Markets can, and will, take advantage of pricing volatility when available as the US listed EGPT ETF demonstrated immediately after Mubarak’s fall.

EGX30:IND to EGPT:US

EGX 30 Index relative to the EGPT US based ETF

EGX 30 Index relative to the EGPT US based ETF

This is a core value of liquid and free markets. They will move in while prices are cheap and take advantage while periods are buoyant. However, a closed market provides neither of these values.

You would be mistaken to view this as an overly cold stance given the unfolding reality of current affairs. With the pressing need for reform in the region and the risk of further instability, it is crucial that market liquidity be maintained, both for the sake of the private sector and for those employed therein.

Lead not by Fear but by Example

North Africa’s future requires more than hope. It needs a firm, sound and reasoned mind to go with its newly freed body. When your nearest neighbour, Libya, is besieged by a violent megalomaniac, then it is all the more crucial that you project yourself firmly towards a brighter, better and rational tomorrow.

Markets aim persistently forwards to tomorrow. What greater example can Egypt project than that of a confident, reasoned and liquid tomorrow, an open market?

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