According to recent trading data and currency market movements, the Egyptian Stock Exchange maintained a strong upward trend throughout December 2025, with the EGX30 index rising to 42,270 points on December 11, recording daily gains of 0.52% and a total increase of approximately 4.56% since the beginning of the month. This performance comes as the exchange rate of the US dollar stabilized around 47.56 pounds, representing a significant recovery for the pound compared to the beginning of the year.

Annual Gains Exceeding 36%... Among the Strongest in the Region

Market data confirms that the EGX30 index achieved one of its best performances in recent years, with an annual increase of 36.80% compared to December 2024, supported by a gradual return of foreign capital inflows. Foreign investors recorded strong net purchases during November, reflecting improved confidence levels in the market.

Egyptian Pound Strengthens Against the Dollar

The Egyptian pound has shown clear improvement throughout 2025, as the dollar's price decreased from its peak of 51.63 pounds in April to 47.56 pounds in December, a recovery of nearly 8% from its lowest level this year. This trend reflects a mix of more flexible monetary policies and additional capital flows resulting from economic reform programs and regional investments.

Tax Reform Reshapes Trading Structure

The tax amendments approved in mid-2025 have redefined the trading landscape in the stock exchange, following the cancellation of the capital gains tax on stocks and its replacement with a lower stamp tax on each transaction. This change has alleviated administrative burdens and encouraged broader participation from various investor segments, particularly individuals who found the new system to be clearer and less complex.

Shift in Investor Behavior... Reduced Reliance on Speculation

The new fees have imposed a different reality on short-term trades, as all transactions - profitable or not - are now subject to the stamp tax, reducing the appeal of quick speculation and increasing interest in long-term strategies. Market data indicates a large influx of new investors in 2025, with a growing trend towards more stable investment portfolios.

Additional Support from US Monetary Policy

Amid slowing US inflation and a decline in the dollar's global strength, the Federal Reserve cut interest rates three consecutive times in September, October, and December 2025, bringing them down to a range of 3.50% – 3.75%. This shift has enhanced investor appetite for emerging markets, including Egypt, which typically benefits from global easing cycles and increased flows of international liquidity seeking higher returns.

Exceptional Rise of Gold in the Local Market

Gold prices in Egypt continued to move within a high range, trading between 199,000 and 200,000 pounds per ounce (approximately 6,400 pounds per gram) after reaching a historic peak of around 207,675 pounds in October. This rise comes amid a global dollar weakness and increased demand for safe-haven assets.

EcoPulse24 Analysis

The performance of the Egyptian Stock Exchange in 2025 exemplifies the interaction of structural reforms with global changes, as the pound's improvement coincided with the onset of a global monetary easing cycle at a critical time. Nevertheless, reliance on foreign capital inflows remains one of the prominent challenges, especially in a global environment that could change suddenly if the Fed reassesses its interest rate path in 2026.

On a local level, the cancellation of the capital gains tax and the simplification of the fee structure are significant steps towards expanding the investor base and reducing the sharp volatility that characterized the market in previous years. However, the market needs to deepen itself through new listings and attract larger institutional investments to ensure the sustainability of the current momentum.

Investor Summary:
Egypt offers an exceptional mix of high returns (36% in equities and strong increases in gold) and an improving macroeconomic environment. However, risk management remains a key element, especially with the market's sensitivity to dollar movements and the Fed's actions in the coming period.