Been there, bought the T-shirt: If nothing else, the actions of Egyptian policymakers yesterday made one thing clear: We’ve finally learned how to handle a crisis. A few short years ago, an event like the war in the Gulf would have seen quiet verbal instructions relayed by telephone to bankers to slow exit queues and shed reserves in a panicked bid to prop up the EGP.

Yesterday, the CBE and the Finance Ministry had a simple (if unwritten) message for the market: We’ve been here before, we know what works and what doesn’t, and we’re going to do the right thing. It’s the second time in less than a year that the central bank, the Finance Ministry, and the banking system have managed a global risk-off with aplomb, and folks — we’re here for it.

The EGP slid 1.7% against the greenback yesterday as banks opened to execute exit orders that saw the EGP slip to nearly 49 against the USD. Outflows kept up the pace as none of the US, Israel, or Iran showed signs they would be putting down their weapons anytime soon.

Foreign investors exited positions in domestic debt worth some USD 1.3 bn yesterday, which led to interbank FX volumes clocking in at USD 600 mn by the end of trading, up from USD 320 mn last Thursday and USD 180 mn a week earlier, a bank insider told us. While outflows are expected to continue in the near term, trading activity could begin to stabilize toward the end of the week, our source suggests.

The queue to exit has been orderly and bankers are treating it as a “business as usual” scenario — very much a replay of the way the market handled outflows in the run-up to (and wake of) Trump’s “Liberation Day” selloff last year.

We spoke yesterday with a who’s who of bankers and senior government officials, and their message was clear: This storm will pass. “The current state of exits is expected given the political tensions,” a senior banker told EnterpriseAM, adding that “hot money is sensitive to political unrest, but returns quickly with signs of stability.” Officials we spoke to also stressed that net international reserves remain strong — and emphasized that the exchange rate is being allowed to move to absorb the shock. And it doesn’t hurt that some USD 2.3 bn from the IMF is expected to land in state coffers this week.

MEANWHILE- The Finance Ministry has a message for the market: It’s business as usual for its local-currency borrowing calendar as it gauges market appetite. “We will not accept exaggerated yields. A risk premium is expected, but we may reduce the volume of accepted bids until conditions calm down,” a government official involved in the issuance of public debt told us, signaling that the government is not in a position to have to accept any price.

Plans for international offerings remain on track for April, with the source noting it is “too early to make a decision” on any delays given the stable underlying economic indicators.

We’re keeping a close eye on oil prices

Pundits are still suggesting there’s a risk that oil rockets past USD 100 / bbl as Iran looks to choke the flow of crude out of the Gulf. Iran’s Tasnim News Agency claimed that the Strait of Hormuz is “effectively” closed and some ships reported receiving a radio broadcast on Saturday — reportedly from the Iranian navy — instructing them to leave the waterway as passage is banned.

Brent crude is at USD 75 this morning even after three ships were struck in the region yesterday — the first reported maritime attacks of the conflict so far. Attacks have so far been limited to the Arabian Gulf, with the Houthis yet to restart attacks on passing vessels in the Bab El Mandeb strait leading to the Suez Canal.

Oil tankers seem to have stopped moving through Hormuz, with roughly 240 vessels stopping near the chokepoint — most around Iran’s Bandar Abbas port, according to S&P Global. Around 130 of those ships were carrying cargo, but none were loaded with crude.

You can pump it out of the ground, but can you get it to market? While some think a pledge by Opec+ to boost output by as much as 206k bbl / d starting next month could offer relief, there’s a big catch: the majority of the group’s output comes from nations that are almost entirely reliant on the Hormuz Strait to deliver to the global market. “In such a scenario, the constraint is not upstream supply capacity but export routes and maritime transit,” Rystad Energy’s Jorge Leon tells EnterpriseAM.

Keep the gas flowing: To ensure supply keeps up with demand at home, the Oil Ministry is moving to increase LNG bookings by an additional 20 shipments for some USD 1-1.5 bn, starting with 15 shipments this month, after Israel shut off 1.1 bcf/d of Egypt-bound gas, a government official tells EnterpriseAM.

The Madbouly government is actively studying all potential scenarios regarding the Strait of Hormuz, President Abdel Fattah El Sisi said during the annual iftar hosted by the Armed Forces. He also touched on the closure’s impact on the Suez Canal: “We have been affected since [the start of Israel’s war on Gaza] and maritime traffic through the Canal has not returned to its normal course, resulting in financial losses.”

“The cost of [covering] ships, containers, and crews, in addition to the refusal of some international ins. companies to [cover] war risks, will put pressure on global trade in the coming period,” former Suez Canal Authority chairman and Suez Chamber of Shipping head Abdel Qader Gaballah told EnterpriseAM. “Furthermore, exchange rate fluctuations and rising oil prices will all contribute to a significant wave of inflation,” he added.

Ins. premiums are lurching upward: A ship with USD 100 mn worth of goods, which used to pay roughly USD 250k per voyage, will now need to cough up USD 375k, the Financial Times reports.

Most major shipping lines are already steering clear of the Suez Canal — in the weeks leading up to the conflict, most had been simply testing the waters, Port Said Chamber of Shipping head Adel Lamai tells EnterpriseAM.

Iran’s goal right now is to cause “enough ambiguity to create a de facto chokepoint shock,” Wolfgang Lehmacher, a supply chain and logistics strategist, told EnterpriseAM. Whether you’re talking geopolitical risk or investor confidence, that blurs the line between “normal” tension and crisis, forcing a persistent risk premium into energy contracts, shipping equities, and port projects linked to Gulf exports, Lehmacher added.

The EGX and the futures market opened to a turbulent morning on the first day of trading

The EGX30 closed down 2.5% yesterday at just under 48.0k points, according to the EGXdaily bulletin (pdf), stripping some EGP 73 bn worth of market cap. Traders sent the benchmark down 5.6% at the opening bell before buying back in.

Foreign investors were net sellers in just about every sector except defensive plays including healthcare, education, F&B, utilities, and industrials. Banking shares and tech, media, and telecommunications stocks were hardest hit in the selloff.

The quick rally after the initial selloff is a signal that the market expects a short conflict, CI Capital head of research Monsef Morsy tells EnterpriseAM. He notes that while the initial drop was sharp, the fact that stocks were picked up toward the end of the session suggests investors believe the sell-off will be “very short-lived.”

The timing of the derivatives launch proved critical in preventing a total rout, with 52 contracts opened across June and September index futures. “I believe today’s opening drop of 5.6% was an acute panic response to an extraordinary event,” Randa Hamed, managing director of Okaz Asset Management, tells EnterpriseAM. She noted that the introduction of index futures helped the market recover from that opening shock to close the day significantly higher. “For the first time, investors had a tool to hedge their equity exposure rather than simply sell it. That distinction matters enormously,” Hamed said, adding that the market’s behavior at the 47.7k level suggests some investors actively used these new tools to weather the storm.

The market had found its footing before the geopolitical shock hit. “The index had pulled back from its all-time high of 52.8k to 48.6k by Thursday — a move driven largely by profit-taking after a strong rally,” Hamed explained. The earlier selling meant the market was not falling from a peak, allowing the 47.9k level to act as a firm support floor.

For asset managers, the volatility is creating a clear entry point for folks who had been waiting for a dip — any dip — to buy. “I see these panic sessions as good chances to identify and build positions in fundamentally sound companies,” Hamed told us, noting that new clients — armed with liquidity from maturing bank CDs — have been waiting for such a window to enter.

What’s next? The outlook is more cautious for sectors with direct exposure to the conflict. “Egypt’s Red Sea resorts and airlines face direct demand destruction as regional airspace closures and travel risk aversion take hold,” Hamed warned. Import-dependent industries face an acute supply chain shock as freight costs surge, while “real estate construction projects with Gulf financing exposure could face some funding uncertainty” as the regional situation remains fluid.

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