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INSTANT VIEW-Market response to Mubarak's departure

Published 02/11/2011, 01:12 PM
Updated 02/11/2011, 01:16 PM

CAIRO, Feb 11 (Reuters) - Egyptian President Hosni Mubarak stepped down on Friday after 18 days of mass protests against his rule.

Below is reaction on impacts on Egypt's economy, stock market and the Egyptian pound .

JOHN SFAKIANAKIS, CHIEF ECONOMIST, BANQUE SAUDI FRANSI

"I think that markets and investors will take the news of Mubarak's departure as being good for the Egyptian economy. It is going to be welcomed definitely. But still the questions they will be asking specifically with regards to what will be the role of the military, what kind of government are they going to form, is the regime going to stay, are the economic policies going to continue as is, and above everything else how will the people react to what is going on?

"If the stock market opens on Sunday, and if we don't have additional surprises tomorrow, I think we will see a reversal of a downward market, so we will see things getting better on Sunday.

"I think that definitely it will be an improvement for the Egyptian pound, but this doesn't mean that we are out of the woods and that everything is fine. Actually now, we are going to go through a phase whereby the people handling the economy will have to begin to deliver. And we will have to wait and see whether again demonstrations and popular unrest will continue to unfold and to take place. If this happens, and the people demand the entire regime step down ... then that will continue to breed uncertainty, and the Egyptian pound will reflect that.

"But I think that the market could very well open on Sunday and on Monday, if we don't have any surprises, we could definitely have the positive news be reflected on the Egyptian pound as well. And capital outflows could very well reverse and not necessarily go out, again if business as usual and nothing changes today and tomorrow.

"If the market opens on Sunday and it's positive, then I think this is going to be good news for the market and for the pound. However, it all hinges on the people: how the people react and what happens from here on and what are the statements that the military is going to make, when are they going to have elections because the investors will want to have clarity as to the medium-term scenario that is going to unfold. The less clarity, the more the likelihood will be to sell-off Egypt. Lack of clarity will lead investors to sell Egypt, more clarity will create investors' security and confidence in the Egyptian market and the economy." (Reporting by Sherine El Madany; Editing by Ron Askew)

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