The Impact of the Floating Egyptian Pound in Foreign Investment in the Stock Exchange and EGX30 Index

Abstract

This research seeks to answer two questions; First: What is the impact of floating the Egyptian pound on foreigners’ transactions in the Egyptian Stock Exchange? Second: What is the impact of floating the Egyptian pound on the performance of the Egyptian Stock Exchange, as measured by the EGX30 index? The limits of this research are the period from 2015 to 2021. The statistical method will be used in this research to test the relationship between changes in the exchange rate of the Egyptian pound in US dollars and each of the foreigners’ transactions in the Egyptian Stock Exchange and the EGX30 index, during the study period. The research found a clear impact of floating the Egyptian pound on foreigners' transactions in the Egyptian Stock Exchange, as their net purchases doubled during the year following the flotation, but the general effect during the study period as a whole was not statistically significant. While the effect on the EGX30 index was positive and statistically significant.