Cairo has been one of the world's best-performing markets so far this year, even though a weak currency and even weaker central government have raised questions about Egypt's stability.
The Egypt fund (EGPT) rebounded around the New Year, soared 48% in the first week of March and then gave back about half its gains as traders started worrying about weak growth and the prospect that political infighting would prevent the country from securing a key IMF loan package.
While the political situation will probably remain a challenge for the foreseeable future, at least the $3.2 billion IMF loan was finally secured on April 5.
A few days after that, EGPT bottomed out at $11.51 and is now a comfortable 12.8% off that low point. Capital flight is still a long-term threat for the country -- Egypt has been bleeding up to $2 billion a month since the uprisings began early last year -- but liquidity from the IMF pushes the crisis back to the end of the year and gives traders hope that a longer-term solution could emerge well before that point.
Moreover, a global decline in inflation has taken the edge off the commodity-dependent domestic economy. Egypt is one of the world's leading importers of grain to feed its people and is distinctive among members of the Arab League for its lack of hydrocarbon reserves, forcing it to import oil and gas.
Even when unrest in the country rattles energy markets, it is largely because a disruption to the Suez Canal or the gas pipeline leading to Israel would interfere with the global transit of fuel, not with production or supply.
After inflation reached a dangerous 9.2% in February, the Egyptian pound has gotten a bit of strength back, reviving 2% in the last two weeks alone.
This is still an economy that's vulnerable to speculators, but for now the weight of global sentiment seems to be on Cairo's side.
And for U.S. retail traders, EGPT remains the only real way to play. While there are two Egyptian stocks that occasionally move over the counter in the United States, turnover is spotty at best.
The country's leading lender, Commercial International Bank of Egypt (OTCQX:CIBEY), is arguably the more liquid of the two, accounting for a full 8.4% of EGPT as well.
Orascom Construction (OTC:ORSDF) is probably best known to Emerging Money readers as a sister company to Orascom Telecom, the regional cell phone network bought out by Russia's Vimpelcom (VIP) in 2010.
While the VIP bid significantly reduced Orascom magnate Nassef Sawaris' corporate empire in Egypt, ORSDF is still a name to conjure with in Cairo, with EGPT having another 8% of its holdings in the stock.
Since the global take on EGPT hit bottom on April 9, ORSDF -- the less liquid of the two stocks -- has continued to decline. CIBEY is up, but it's definitely lagged the rest of the Egyptian market.
Given the slim odds that a retail trader can even put together a reasonably sized position in either CIBEY or ORSDF, handicapping them against EGPT's prospects seems a little moot. If you want to speculate on Egypt -- one of the most robust economies in the Arab world and Africa -- then EGPT really is the way to go.