Middle East dilemma over subsidies unnerves investors

November 8, 2012 18:35

LONDON - Egypt's tetchy negotiations with the IMF on slashing subsidies as a part of a loan deal reflect a far broader fiscal and social conundrum in the region, raising the stakes for investors.

Egyptian stocks have rallied 50 percent this year on greater political stability and hopes for a deal with the International Monetary Fund, after shedding half their value in 2011 after the ousting of Hosni Mubarak.

For many investors, securing a $4.8 billion IMF deal will be the catalyst for a much-needed rebound in private-sector investment.

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