On the surface, 2025 was a record-breaking year for the EGX — the benchmark EGX30 index rose nearly 40%, climbing from approximately 32k points in March to close at 41.8k, flirting with an all-time high. The broader market followed the upward trend, swelling 33% to hit the EGP 3 tn mark by year-end, up from EGP 2.25 tn in 1Q. While the annual report isn’t out yet, we compiled our data using the bourse’s periodical reports.

While the headline numbers suggest a bull market, a deeper look reveals this wasn’t a broad-based boom driven by fundamental optimism. Instead, the rally appears to be a massive asset transfer engineered largely by local institutions seeking a hedge against currency volatility and inflation.

The defining theme of the year was the institutional floor

While benchmark indices climbed, the rally was fueled almost entirely by a single group: domestic institutions. Foreign and regional institutions were net sellers every quarter — excluding 1Q when regional big money was a net buyer — offloading roughly EGP 20 bn in listed equities over the year, excluding block trades. Local retail investors — often assumed to be chasing inflation hedges — also sold into the strength, dumping a net EGP 8.2 bn, excluding block trades. Domestic funds and state-linked entities were the market’s sole pillar of support, ramping up their net buying from EGP 2.3 bn in 1Q to a massive EGP 11.2 bn in 4Q, excluding block trades. The market has effectively decoupled from foreign sentiment, becoming a closed loop of local liquidity.

This flood of institutional money didn’t lift all boats equally

For the first three quarters, liquidity heavily favored inflation trades — especially real estate and non-bank financial services (NBFS), which consistently led trading values as investors sought asset-backed hedges and yields. However, the fourth quarter saw a sharp rotation into laggards. Building materials erupted as the top-performing sector in 4Q with a 59.3% gain, followed by education services (+35.0%). This late-year rotation triggered explosive moves in specific main market stocks: Egyptians Housing Development & Reconstruction was the year’s breakout star, rallying 603% in 4Q alone, while Misr Cement jumped 135%.

Capitalizing on the rally

Corporates wasted no time utilizing these elevated valuations to repair balance sheets and raise liquidity. The year saw a flurry of heavyweight corporate actions. Qalaa Holdings executed a massive EGP 8.99 bn capital increase in 4Q, following earlier raises by Beltone Holding(EGP 10.5 bn) in 2Q.

The market also welcomed new blood, with Bonyan for Development listing in 1Q, followed by U Consumer Finance in 2Q, and National Printing in 3Q. Conversely, the market lost a giant when Ezz Steel delisted in 1Q, taking over 500 mn shares off the board.

The policy pivot

The most critical moment for the market didn’t happen on the trading floor — it happened in the Finance Ministry. The incoming capital gains tax (CGT) hung like a dark cloud over the exchange for most of the year… then came the U-turn. Finance Minister Ahmed Kouchouk’s confirmation that the government would swap the complex CGT for a unified 0.125% stamp duty was the reprieve the market had been waiting for.

But it gets better: The ministry is currently studying a three-year tax exemption for newly listed companies (tied to KPIs like trading volume) alongside tax exemptions for holding companies selling stakes in subsidiaries and on income generated from the sale of unlisted shares.

Why this matters: Taxing “dry transactions” previously killed IPO readiness, CI Capital sell-side CEO Amr Helal told us last month. The new policy signals that the state finally prioritizes market depth over short-term revenue.

The IPO pipeline: why did we lag?

While Saudi Arabia averaged c. 20 main market listings a year in a flood of IPOs, Egypt struggled to close transactions. The trickle of IPOs is due to a structural gap, EFG Hermes’ Global Head of Investment Banking Mostafa Gad previously told us, notably the lack of deep domestic institutional capital.

Large IPOs require foreign participation to clear, yet for much of the year, foreign investors were on the sidelines amid concerns over FX repatriation. That dynamic has now shifted: with FX backlogs cleared and repatriation flows normalizing, the underlying mechanism is functioning again.

The National Printing IPO should act as a template for what comes next, Gad said, highlighting a model that brings in a cornerstone investor early to anchor the book, add credibility, and de-risk the offering for the broader market.

The government has reportedly set a target to raise USD 3-4 bn by October 2026 through privatization, with expected transactions including Banque du Caire, Safi, Wataniya, and the remaining stake in Bank of Alexandria. EGX head Islam Azzam said the EGX expects at least eight new offerings in 2026, including players in the healthcare and tourism sectors.

Qalaa Holdings is moving ahead with the growth and deleveraging strategy it outlined in its 1Q results, with plans to list six of its subsidiaries on the EGX within two years and extend the figure to 12 companies over six years, Chairman Ahmed Heikal told Al Arabiya yesterday. Qalaa’s board had previously approved listing Dina Farms, National River Ports Management, Asec Automation, and two undisclosed companies.

Of brokerages

EFG Hermes remained the top brokerage of the year with a 20.1% market share, beating Thndr (8.3%) and Mubasher (7.2%), according to the bourse’s ranking (pdf) which tracked firms’ performance during 2025.

We also beat Saudi’s TASI and the UAE’s DFM and ADX

If you had told an asset manager in January 2025 the EGX would end the year outperforming Riyadh, Dubai, and Abu Dhabi, they likely would have laughed. Yet, 12 months later, the numbers are undeniable: The EGX30 was up over 40% in 2025 — closing near an all-time high of 41.8k points — while the Saudi TASI shed 14%, Abu Dhabi managed only single-digit gains, and Dubai was up 17% — impressive only in isolation.

The story of 2025 is a story of two commodities: Oil and interest rates. Saudi Arabia spent 2025 grappling with oil. Weak global demand and Opec+ production cuts weighed heavily on the region’s petro-economies. Saudi Aramco’s 15% slide dragged the TASI down, creating a liquidity crunch that dampened sentiment across the Kingdom.

Egypt, conversely, spent 2025 focused on interest rates. After the Central Bank of Egypt (CBE) kick-started its easing cycle, the gravity shifted. In the Gulf, high US rates and low oil prices were a headwind. In Egypt, the expectation of a cheaper cost of capital acted as rocket fuel.

What happens next

The EGX enters 2026 with momentum, but the “easy money” has been made, given that the 40% gains of 2025 came from a low base — and amount to a partial re-rating after devaluation. To advance in 2026, domestic equities need to offer a high-growth story that outpaces the cost of money. In an environment where the riskfree rate is still hovering above 20%, dividend yields aren’t enough to attract foreign capital, according to Gad. Why buy a stock for a 5% yield when you can get 20% in a T-bill?

The forecast: CI Capital expects the CBE to cut rates by c. 600 bps in 2026. Crucially, even with these cuts, Egypt will offer a positive real yield of c. 3%, keeping the carry trade alive while igniting equity valuations.

  • The bull case: The government delivers on the privatization roadmap using the cornerstone model, inflation cools and enables deep rate cuts, and foreign inflows accelerate as Egypt looks like the only high-growth story in a sluggish MENA.
  • The bear case: The “trading hours” change kills liquidity, IPOs are priced too aggressively (refusing to leave money on the table), and geopolitical tensions spike, spooking the very tourists and investors the country needs.

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