Stagflation reflections on Egyptian stock market

احمد عباس أبوزيد, نسرين

doi:10.21608/jocu.2024.296896.1343

Stagflation reflections on Egyptian stock market

نوع المستند : مقالات سیاسیة واقتصادیة

المؤلف

نسرين احمد عباس أبوزيد

Faculty of Business, Economics and IS,, Misr University for Science and Technology(MUST) 6 of October City, Giza , Egypt.

10.21608/jocu.2024.296896.1343

المستخلص

This paper conducts a practical investigation into The relationship among inflation, economic growth, and stock valuation by analyzing performance metrics of the EGX100 index and its returns on the Egyptian Stock Exchange from 2006 to 2023. It seeks to ascertain whether stagflationary circumstances necessitate a shift in perspective among Egyptian investors. By examining whether macroeconomic conditions are genuinely compromised, it investigates alterations in return on investment and estimations of stocks
during stagflationary intervals.
It is determined that the entire duration, which includes data from 2006 to 2023, indicates a direct connection between inflation and the market value of the Egyptian Stock Exchange index. Additionally, there is an adverse connection among inflation and yield earnings, which undermines investor confidence in the future path of monetary policy. The path analysis reveals stagflation occurrences in the quarters of 2017, 2018, 2022, and 2024. Consequently, the analysis suggests a negative correlation between stagflation and economic growth.
The paper highlights changes in the correlation between economic growth and inflation during stagflationary periods. It also identifies differing behaviors in earnings yield models and equity returns models between stagflationary and non-stagflationary periods. Consequently, the paper emphasizes the importance of employing a different approach when navigating the Egyptian stock market during stagflation.

الكلمات الرئيسية