World-Beating Stock Rally May Be Just the Start for Egypt

If history is any guide, Egyptian stocks’ world-beating gains following the nation’s currency devaluation may be just beginning.

The EGX 30 Index has jumped 14 percent since Monday’s 13 percent weakening of the pound. The gains are an echo of what happened in January 2003, when a foreign-currency shortage that gave rise to a black market for dollars and deterred investment led policy makers to devalue the currency by 14 percent. On that occasion, the measure went on to more than double in value by year-end as foreign reserves recovered.