Foreign investors stunned Cairo’s financial markets Wednesday by pumping billions into Egypt’s short-term debt, shrugging off the regional tremors stirred by tensions between Israel and Iran.
The sudden influx of foreign capital—12 billion Egyptian pounds to be exact—landed like a thunderclap after two days of heavy selloffs. The move, far from cautious or timid, hinted at something more audacious: a vote of confidence in Egypt’s financial resilience even as fires smolder across the Middle East.
A Whiplash Week in the Market
Monday and Tuesday had painted a different picture. Foreigners offloaded treasury bills like hot potatoes—first 6 billion pounds, then a whopping 23 billion the next day. Risk seemed to be off the table. So what changed by Wednesday?
Turns out, a lot.
Wednesday saw a reversal so sharp it left analysts double-checking their screens. Foreign buyers scooped up over 16.2 billion pounds in treasury bills. At the same time, they sold just 4.6 billion pounds. That’s a net buy of 11.6 billion pounds in a single trading session.
It was, by all accounts, unexpected.
Chasing Yield in a Fragile Calm
Mahmoud Nagla, who leads money markets and fixed income at Al Ahly Financial Investment Management, didn’t mince words. He called the surge in foreign trading “opportunistic,” noting that these weren’t panicked entries or exits—they were calculated moves aimed at pocketing short-term gains.
“This isn’t a case of foreigners dumping and running,” Nagla told Al Arabiya Business. “They’re rotating positions to lock in returns based on interest rates and currency movements.”
He’s not wrong. Egypt’s treasury bills offer yields that are hard to ignore. Especially for investors hunting for stability amid the chaos unfolding to the east.
Not Everyone’s Panicking
Geopolitics might be on fire, but markets are betting that Egypt won’t get burned.
There’s been no new actor pulled into the Iran-Israel standoff, and that’s a relief. A sigh of one, at least. The fact that the conflict hasn’t spilled across borders in a way that affects Egypt directly has soothed nerves—for now.
Nagla pointed out that this “relative de-escalation” helped calm anxiety about Egypt becoming collateral damage. Investors, he said, are betting that Egypt can maintain a firewall between its economy and the region’s troubles.
Still, it’s a risky play. No one’s under any illusion that the neighborhood is safe.
One sentence here—because even markets need to catch their breath.
The Numbers Behind the Moves
Let’s take a closer look at the data from the week’s wild swings:
| Date | Foreign Purchases (EGP) | Foreign Sales (EGP) | Net Flow (EGP) |
|---|---|---|---|
| Monday | – | 6 Billion | -6 Billion |
| Tuesday | – | 23 Billion | -23 Billion |
| Wednesday | 16.2 Billion | 4.6 Billion | +11.6 Billion |
What’s Driving This Contrarian Bet?
The reasons aren’t all that mysterious. High yields are magnetic. Egypt’s treasury bills currently offer interest rates that outpace inflation-adjusted returns in many developed markets. That makes them tasty morsels for foreign investors, especially those with strong risk appetites.
But there’s another layer to this.
Egypt’s central bank has been managing a delicate dance with the pound. Interest rate adjustments and managed devaluations have made timing crucial for currency-savvy investors. Get in and out at the right time, and returns are sweeter. Miss it, and you bleed.
Investors are trying to front-run these fluctuations. Buy low, sell high—classic, but risky in a region where headlines can swing currencies in minutes.
Fog Ahead, but Some See the Road
Despite the big inflow, not everyone’s celebrating.
Some economists warn that this kind of hot money is just that—hot. It can leave as quickly as it arrives. Relying too heavily on short-term foreign capital to plug fiscal gaps or boost reserves is, frankly, a gamble.
And it’s not like Egypt’s challenges have vanished. Inflation remains high, growth is under pressure, and public debt continues to weigh down policymaking.
Still, the foreign investors who stepped in on Wednesday weren’t doing it blind. They’re aware of the risks, but they’re also spotting chances.
“They’re not looking at the noise,” said one Cairo-based fixed-income strategist, speaking on condition of anonymity. “They’re looking at the numbers. And the numbers are working—for now.”
A Calculated Risk, Not a Leap of Faith
What this week shows is that Egypt still holds sway over a certain kind of investor—those willing to dance close to the fire for a taste of yield.
That said, this game only works if the music keeps playing.
Any sudden shock—political, military, or economic—could scatter these capital inflows in an instant. But for now, the bet’s on calm. And Cairo, against all odds, is holding the line.
