Prices of shares on the stock exchange in Egypt have leapt higher after the ousting of Mohammed Morsi as the country’s president.
Stocks on the Cairo bourse rose by 7 percent on Thursday, its largest one-day percentage increase in 12 months.
On Wednesday the Egyptian Military announced the removal of President Morsi from power, due to pressure from millions of anti-Morsi demonstrators.
Stock traders are hoping that Egypt’s economic prospects will improve now that Mr Morsi is no longer in charge. A promised loan from the IMF that had delayed could now be approved.
Egypt’s economy remains in crisis and a recovery may take a while.
Egyptian government debt has grown from $30 billion before former president Hosni Mubarak was ousted to around $40 billion today. Inflation, which two and a half years ago was 3 percent, now stands at between 13 percent and 18 percent. Unemployment has climbed to a record 13.2 percent under Morsi.
Under Mr Morsi, economic watchers said that Egypt’s economy went from bad to much worse and is now close to collapse. Electricity and water supplies are sporadic and in some places even basic foods like bread are hard to come by.
Tourism, one of the big contributors to the country’s economy has taken a free fall since the revolution that ousted former leader Hosni Mubarak more than a year ago.
He was unable to increase taxes for more revenue so as Egypt’s budget deficit shot up, Mr Morsi’s government continually dipped into the country’s cash reserves, which at $16 billion today are less than half what they were before Mr Morsi took office.
However, some analysts believe that things could improve.
Sebastien Henin, portfolio manager at The National Investor, an Abu Dhabi-based investment firm said that “the technocrats will know how to deal with institutions – they will help the country financially because they have a clear agenda”.
“There will be a definitive change to the business environment for international and domestic investors,” he added.
Oil prices topped $100 a barrel Wednesday, as traders feared the fallout from a coup in Egypt could spread to the broader Middle East.
While oil production from Egypt is negligible, the country controls the Suez Canal and pipeline, which move about 4 million barrels of oil per day.
