Egyptian stocks were also affected with the reduction of the country’s credit rating by international agencies, and the reports focused on the problem of ambiguity in the course of exchange rates and the presence of more than one price for the local currency, in addition to the scarcity of dollar liquidity and the decline in foreign exchange inflows, which increases the risk premium and its impact on the decline in stock valuations.
A risk premium is the investment return an asset is expected to yield in excess of the risk-free rate of return. An asset’s risk premium is a form of compensation for investors. It represents payment to investors for tolerating the extra risk in a given investment over that of a risk-free asset.
HSBC Bank said in a report that investors are still concerned about investing in Egypt, as the past four years witnessed a decline in investor interest