Egypt's EGX30 Achieves Reported 52% Annual Gains to Settle at 54,931 Points

The EGX30 index tops the list of the fastest-growing markets in the region according to reports, achieving annual gains of 52% to settle at 54,931 points, recording an exceptional performance that surprises many observers who expected domestic economic pressures to impact market performance.

This strong performance is reportedly mainly attributed to the phenomenon of "inflation-defensive investment," where Egyptian investors turn to stocks as a haven to preserve their wealth in the face of high inflation rates eroding the real value of bank deposits and cash liquidity.

The real estate, banking, and consumer goods sectors contributed to driving the index's rise as reported, as companies in these sectors benefited from the ability to pass price increases on to the end consumer and maintain acceptable profit margins in an inflationary environment.

However, analysts warn, according to reports, that part of these nominal gains may be illusory if evaluated in dollars rather than Egyptian pounds, as the pound lost a significant portion of its value against foreign currencies, meaning that real gains in hard currency are less than nominal figures suggest.

What is the difference between nominal and real gains in stock markets?

Nominal gain is the increase in local currency (here, the pound). Real gain takes into account inflation and currency depreciation. A 52% gain in pounds does not necessarily mean 52% in dollars if the pound depreciated significantly during the same period.