Mubarak resignation revived investors' hope

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CAIRO - President Hosni Mubarak's resignation offered new hopes for a rebound in bruised investor confidence in Egypt with the costs for the insurance of the debts of the country sharply withdraws sovereign. Map, shows analysts and economists that other issues, such as the pace of reform and what remained role that would play the military.

Friday's announcement was Vice President Omar Suleiman, who said, control of the country to the military was Mubarak passed. Mubarak's output indicates an apparent end the crisis almost three weeks that many had feared would in violence and cripple the country politically and economically.

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"It is a step in the right direction, definitely," said John Sfakianakis, Chief Economist with the Riyadh, Saudi Arabia-based Banque Saudi Fransi. "What we still do not know is exactly the direction we take, you or the steps to get."

Ascertain the easing of investor fear fell of the country's five-year credit-default swaps 24 basis points to 313 basis points, according to CMA data. Meanwhile market vectors Egypt Index ETF - enables investors Egyptian stocks - was about 4.3 percent to $18.52. It had reached the resignation announcement 6.7 per cent within minutes.

But many questions about the next steps were and whether resignation of the President would be enough to placate millions whose claims contain the dismantling of his entire regime.

Wael Ziada, head of Egypt research at Cairo-based Mideast Investment Bank EFG-Hermes, said that news should help "restore trust because it means the country reaches a more stable state."

But he said "We need to know how the military will be ruling the next period."

The announcement was a rarely some good news for millions in a nation that had seen to grind to a halt the economy in the first week of demonstrations.

As banks closed, businesses were closed and lawlessness erupted, built in the last 18 days in an outpouring of protesters vitriol directed tension against a man, had almost 30 years ruled the Egypt. Banks reopened, saves you much feared panic investors withdraw their money.

But growth 7 percent appeared for three years before the global financial crisis struck enjoyed Egypt to be a wistful memories. Tourists fled dumped holdings in droves and foreign investors. Others had pumped hundreds of millions of dollars in ventures like Megastores Carrefour saw their stores, turned to ashes of incendiary bombs, after the company was plundered.

Egypt's image as a pillar of stability in a troubled region had around it garbled to say the least and it was anyone's treasures, how deep the impact would be.

Even before Suleiman's announcement it was unclear whether the Egyptian Exchange as planned after a two-week closure would reopen. EGX30 market benchmark index dropped almost 17 percent in two consecutive trading days before it closed on Jan. 28. This view was published now.

Was also questioned whether a further pummeling the Egyptian pound could bear or whether outflows of foreign capital would continue and at what pace. The Central Bank had appeared to support the pound as foreign money and other contaminants from the pound to the U.S. currency shifted. It said it was ready to intervene if needed, again citing official of 36 billion $ foreign currency reserves.

Positive evaluation
A positive assessment provided first indications.

The Dow Jones industrial average reversed a previous slide and was up 12 points higher than European markets also powered. Oil prices dropped, the U.S. benchmark crude oil futures contract for March delivery $1.21 to $85.52 in midday trading on the New York Mercantile Exchange to delete. London Brent crude fell 31 cents to $101.13 on the ICE Futures Exchange.

The wide spread between the two benchmarks had at least in part by concerns cemented were riots in Egypt Suez Canal could affect movement and was spreading to other countries in the oil-rich Middle East where autocracy widely used standard and popular discontent.

Skeptical while analysts are the same unrest could seriously threaten the Arab Gulf States, where oil wealth be channeled can reassure the population, they were less sure about the Outlook - short term at least - in Egypt.

The pace and structure of reform that would arise in the near future was at stake. In addition any Government that emerges from the shadows of Mubarak's regime still raising baggage be, he is left behind.

"It remains to be seen whether the euphoria in the streets of Cairo, which welcomed Mr Mubarak's resignation is maintained by what could be a very difficult transition period", Nomura said in a report Friday issued.

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About 40 percent of the Egyptian population of 80 million people live on or below the World Bank $2 per day poverty benchmark. Corruption is widespread and Egyptians have accused, friends and colleagues power brokers the country blind Rob Mubarak's business years the privatisation process, sweetheart business deals, cut-rate prices for State lands and other bribes, with the insignia of power came.

Was also to be expected, a swollen deficit, a large income gap, a bloated public service sector increased weeks old promises of 15 percent of the payee and pension for his workers and pensioners, unemployment, which unofficially coupled, as high as 25% and even higher, at the age of under 30, which accounts for at least 40% of the population.

Compounding the litany of woes was which hit, could take the tourism industry in the wake of the protests. Foreigners had the country flock fled when the protests developed and it remained unclear whether you would be willing to risk return soon in a country where the military was reportedly in the control.

Then remained the perennial political issue: the Muslim Brotherhood - the largest and best organized opposition movement in the country. While the Group renounces violence long ago, it still viewed with concern by many in the West, who fear it aims, Egypt a draconian Islamic State to turn into.

"The biggest question that remains unanswered what happens with the opposition and the role of the Muslim Brotherhood," said Sfakianakis.

He said "If we get to free elections, which will play family for certain, an important role in determining whether the investor community as an offer or a sale proposition, Egypt sees".

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