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Ousting Morsi to restore investors' trust: experts

By Shaimaa Behery (Xinhua)

08:24, July 05, 2013

CAIRO, July 4 (Xinhua) -- As the profits of the Egyptian stock exchange reached 22.7 billions Egyptian pounds (about 3.23 billion U.S. dollars) on Thursday, only one day after the ouster of President Mohamed Morsi, analysts expect investors to "regain" their trust in Egypt as a "promised land" in the upcoming new era.

The hike in the stock market was described by observers as " noteworthy," as its losses in the first six month of 2013 was estimated at 54.4 billions Egyptian pounds (about 7.7 billion dollars), when the country was engulfed in heated unrest and political division between pro-Morsi Islamists and anti-Morsi liberals.

Head of the Economic Center of Sadat Academy, Ehab al-Desouky, considered the exchange's profit a "practical reaction" to the new trend in Egypt after Morsi's ouster.

"The stock exchange's hike depends on the investing decision, and the investing decision depends on the investor's trust in the future more than his trust in the present, which means that the bourse's rise today reflects the investors' mounting hope about Egypt's future after ousting the one year-lasted regime," Desouky said.

Egypt's armed forces removed Morsi from his post on Wednesday after days of massive protests against him due to his "poor performance" since he was elected last June, and assigned chairman of the Supreme Constitutional Court, Adli Mansour, to run the country for a transitional period.

The army put a roadmap for the transitional period, including forming a national government with broadened powers, suspending the current constitution, and forming a commission to prepare for constitutional amendments.

For Desouky, the roadmap "assured" the investors about the " near future" of Egypt, as the first thing the investors care is " stability."

However, he believes that ending the political conflict and putting a roadmap "aren't enough" for assuring the investors.

"Ending the political unrest, appointing an interim president, and putting a roadmap can only ensure the investors in the 'short term' ... What Egypt urgently needs now to encourage investments is a 'powerful cabinet' for the sake of the long-term planning," said the expert.

Echoing Desouky's view, banking expert Bassant Fahmy said the stock exchange's rise was a "promising" sign about the investors' belief in a stabilized future.

"This elevation is a good indication for the investors' trust in Egypt's situation, but forming a cabinet of 'proficient' ministers is much more important for the investors than assigning a new interim president," Fahmy said, noting that the cabinet is " directly" responsible for putting forward policies to facilitate the investors' work and for meeting peoples' aspirations to end their "indignation."

Fahmy also said that the security situation would be "much better" after ousting Morsi, and would therefore be another key reason for investors to come in.

"Fragile security affected the investors' turnout during Morsi' s time, and it was out of the weak management of his loyal cabinet of (Prime Minister Hesham) Qandil ... I believe that all faults of the former regime will be avoided in the future," said Fahmy.

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