Almost half of a sample of Middle East-based fund managers expect to raise equity allocations to Egypt in the next three months, according to the latest monthly Reuters survey of leading fund managers in the region. None expect to reduce their exposure. The results of the survey of leading fund managers in the region, conducted in the past 10 days, show growing optimism about a recovery of Egypt's economy despite continued political uncertainty there. Forty-seven percent of 15 managers said they were likely to put more money into Egyptian equities, up from 33 percent in November's survey. All the other managers expect to keep their Egyptian allocations steady; for the first time since the survey was launched in September, none expect to cut exposure to Egypt. Of the six major Middle Eastern stock markets covered by the survey, funds are in general most bullish about Egypt, the survey results indicated. As the Egyptian government's decision to list the Muslim Brotherhood as a terrorist organisation last week showed, the country is still struggling through a difficult transition back to civilian rule. But most fund managers are assuming a drastic deterioration of public security will be avoided and are focusing instead on signs that billions of dollars worth of aid from Gulf states are starting to revive the Egyptian economy, by allowing the government to assemble large economic stimulus packages. The main Egyptian stock index is up 24 percent in 2013, having regained levels last seen in January 2011, just before the overthrow of President Hosni Mubarak ushered in more than two years of political and economic instability. The survey was conducted by Trading Middle East, a Reuters forum for market professionals.
