Expectations that Egypt would cut interest rates and improved performance across emerging markets pushed up the country's stocks 4.6 percent this week, with some analysts expecting the trend to continue in coming weeks. Gains by the Egyptian pound and a plunge in inflation contributed to expectations the central bank would cut rates at its meeting on Feb. 14. Those expectation spurred optimism among domestic and foreign investors, who increased their holdings.

"There is no financial reason pushing the market higher, but expectations of interest rate cuts and the central bank governor's statements helped stocks and the market rally this week," said Ahmed Hesham, vice president of equity and quantitative strategy at Beltone Financial.

Central bank Governor Tarek Amer told Bloomberg last week the pound would see greater volatility after the bank ended a mechanism that guaranteed foreign investors could repatriate their dollars when they sold Egyptian securities. Instead, investors will deal via the interbank market. The pound gained about 2 percent this week. The Egyptian Exchange's benchmark index closed at 14,127 points on Thursday, up 4.6 percent from last week.

Copyright Reuters, 2019