Egypt’s benchmark stock index hit a record high, spurred by investors looking to hedge against surging inflation driven by a series of currency devaluations and the fallout from Russia’s invasion of Ukraine.

The EGX 30 Index rose 1.7% in Sunday trading, continuing its bullish run to surpass a 2018 peak. In local-currency terms it has now risen over 91% from an October low, while in dollar terms it’s up 1.8% year-to-date, outperforming the MSCI Emerging Markets Europe, Middle East and Africa Index.

The stock market has been benefiting from its role as a safe haven of sorts for investors in Egypt, a major food importer hit hard by the war in Ukraine. Supply issues linked to the conflict and three devaluations of the Egyptian pound since early 2022 helped push annual inflation to a record 36.5% in July.

Read More: Egypt’s Inflation Hits New Record as Pound Devaluation Looms

Investors and analysts expect another devaluation, although that appears to be largely contingent on the North African nation’s government being able to secure adequate foreign-currency buffers, including from state-asset sales, to clear an import backlog and make an orderly adjustment.

Egypt is also awaiting an International Monetary Fund review of a $3 billion loan program agreed last year — a step necessary to unlock the next tranche of the package.

Author: Leen Al-Rashdan