NEW YORK (TheStreet) - The political protests taking place in Egypt have captured the attention of the world and spurred investor demand for exposure to this nation.
In the aftermath of President Mubarak's decision to not run for reelection, there has been some evidence that has indicated tensions in the nation are cooling. For instance, on Wednesday Reuters reported that Egyptian credit default swaps have seen a noticeable retreat from the week's highs. Additionally, Internet service has reported been returned to parts of the nation. Ultimately, however, the situation remains tense as protestors clash on the nation's streets.
In the coming days Egypt is sure to remain in the headlines as analysts and market commentators around the globe debate what is in store for this nation.
Throughout the tumultuous past few days, an attractive destination for investors seeking Egyptian exposure has been the Market Vectors Egypt ETF (EGPT).Since Friday, droves of investors have been pouring into the fund, hoping to take advantage of the political unrest. This has led to a spurt of trading sessions during which EGPT's volume has neared or exceeded 1 million shares. This type of interest in the fund, however, is unusual given its history. Prior to the recent round of politically-fueled protests, the EGPT suffered from low investor interest represented by a dismal average trading volume.
The sudden interest in the EGPT has been exciting to watch and may bode well for the previously ignored fund's future within the Darwinian ETF universe. However, this product is one I would not advise investors to take advantage of at this time. At the start of this week, EGPT's parent company, Van Eck announced that EGPT's share creation had been suspended. As we have seen in the past, when an ETF's normal share creation process is interfered with, investors can get caught in a messy situation. With no new shares coming to market at this time, EGPT is no longer behaving as a traditional ETF should. Instead, the product is exhibiting features more typical of a closed-end fund. Halted supply combined with heavy demand has led EGPT to separate from its net asset value, resulting in the creation of a substantial premium which, as of Feb. 1, was over 12%.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV