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Investing.com -- Morgan Stanley says the potential reopening of the Suez Canal could be a major catalyst for Egyptian equities in 2026.
Analyst Matthew Nguyen reiterated an Overweight rating on the market, arguing that “tentative signs of the Suez Canal re-opening” are already helping investor sentiment and could pave the way for further re-rating of equities.
Nguyen points to Maersk’s Jan. 15 announcement that it will make its “first structural return to the trans-Suez route,” noting that the move from the world’s second-largest shipping company could prompt “a full-scale return by all major containership players.”
He adds that CMA CGM, the third-largest operator globally, conducted trial sailings in December 2025, which “bodes well for the full resumption.” Morgan Stanley’s transportation team expects full traffic to resume by the second half of 2026.
A revival would mean “higher Suez Canal receipts for Egypt,” helping to strengthen external balances at a moment when Morgan Stanley sees “scope for a stronger macro backdrop to support a re-rating of Egyptian equities.”
The bank highlighted Egypt as an Overweight in its 2026 EEMEA outlook, citing “undemanding valuations amid an ongoing macro-turnaround.”
Foreign investor flows into Egyptian stocks have already picked up, reaching their highest in two years month-to-date. Meanwhile, Morgan Stanley’s macro strategists have re-entered long EGP T-Bills, with “lower local yields and stronger FX backdrop” expected to support further gains.
Morgan Stanley notes that Egypt ranks No. 1 on its equity country scorecard.