For anyone who’s been watching Egypt’s privatization plans, 2025 was a year on pause, with painfully little movement in the IPO pipeline. Monsef Morsy, CI Capital’s head of research, argues that next year could be different thanks to lower interest rates, clearer reform signals, and a more serious approach to privatization. The EGX, he thinks, could finally come off life support.

For the EGX to work, two things need to happen

#1- Falling policy rates — globally and locally: When rates are high, investors park their money in fixed income, Morsy says. Investors look at equities when falling rates send them looking for growth. “Global monetary easing will mean capital flows from developed markets to emerging markets,” he notes.

But won’t they be looking at Saudi Arabia and the UAE before Egypt? The two big Gulf markets still attract the lion’s share of investor attention — no question, he said. But that doesn’t automatically crowd Egypt out. Why? Morsy says that the funds that allocate to Egypt are often not the same as those focused exclusively on Saudi. The EGX is small, and even modest foreign inflows can have a big impact as some investors actively look beyond the Saudi-UAE trade. “I think Egypt will be among the top destinations in terms of deploying funds in 2026.”

CI Capital expects Egypt to cut interest rates by around 600 basis points in 2026. Yes, bond yields will fall, but we’ll look much safer from a credit-risk perspective, he says. “Even with a 6 percentage point drop next year, we’ll still be operating at a positive real yield going forward. I think the CBE will be aiming to keep real yields at a 3% positive. So this will definitely remain attractive to foreign investors.” Foreign money, he says, will be interested not just in bonds, but in equities too.

Data points: The CBE left interest rates unchanged last month. The overnight deposit rate stands at 21.00%, the lending rate at 22.00%, and the main operation and discount rates at 21.50%. Annual urban inflation eased 0.2 percentage points in November to end the month at 12.3%.

#2- Follow through with promises made to investors: Investors don’t just care what the government says — they care that it follows through, said Morsy. He added that while lower rates will help, IPOs are really a byproduct of stability and confidence, both of which are starting to fall into place.

Big government land sales can bring in cash, but it’s transient, said Morsy, noting that what really moves the needle for investors is opening real businesses to the private sector. What’s a serious signal the government wants that? One thing could be allowing private operators to manage the airports, he said, adding that we could start with Hurghada Airport. “It’s a strategic asset and impacts strategic sectors such as tourism… This is something to watch out for and it shows we mean business.”

Then there’s FX stability + exports-driven industries

FX stability has helped bring remittances back strongly, and they “will keep coming in as long as we keep a stable FX rate. I think the current FX rate, I’d say, is at a good level, especially as long as the FX rate is moving with the inflation differential we have with our biggest trade partners — which is exactly what the CBE says it wants.” Egypt has been trading in roughly the same FX range for months, he said, adding that the balance of payments is holding up, reserves are growing gradually, and FCY inflows are financing the economy.

“Exports have been picking up over the past couple of quarters, and if you look at GDP growth per quarter, export-driven industries have been one of the main drivers,” said Morsy, highlighting that companies like TMG, Edita, and Cleopatra have successfully expanded their international reach. Still, there’s plenty policymakers can do to support the sector.

REMEMBER- Amr Helal, CI Capital’s CEO of the sell-side investment bank, told us earlier thismonth that foreign investors are closely watching export-oriented companies, seeing them as a hedge against FX volatility, thanks to their natural FX earnings and competitive cost structures.

What’s quietly improving on the EGX

Some of the notable achievements in 2025 mentioned by Morsy include a rise in market capitalization, improved trading liquidity, and a growing number of stocks now meeting the minimum size requirements for foreign investors. “This is something very important for foreign investors to start looking at because many of the foreign investors have thresholds. They have minimum levels in terms of deployment into stocks, with a minimum level of liquidity, and a minimum of market capitalization. So these improvements would start attracting foreign investors.”

With just two trading weeks left in the year, the benchmark EGX30 is up 42.3% YTD.

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