Risk assessment of the Egyptian stock market in the wake of the Arab Spring

Abstract

Purpose – The purpose of this paper is to shed some light on the Egyptian stock market and its macroeconomic environment in the wake of the Arab Spring. Design/methodology/approach – The paper examines whether the averages of the EGX30 index price changes in addition to key macroeconomic variables are statistically significant pre and post Arab Spring. Findings – High inflation in the period up to the Arab Spring was a major contributing factor for the uprising. The solutions for the EGX30 index troubles are political and macroeconomic. Originality/value – The variables examined pre and post Arab Spring are EGX30 returns, EGX30 total market value, US$ reserves kept at the Egyptian Central Bank, US$ to Egyptian pounds exchange, and inflation.