How Do Stock Returns Respond to a Currency Devaluation Announcement?
Bibliographic record
Abstract
This study investigates how the Egyptian stock market responded to the 2024 devaluation of the Egyptian Pound (EGP) and evaluates whether price adjustments reflect semi-strong form market efficiency. Using daily data for EGX30 firms, we estimate abnormal returns around the devaluation announcement and document largely insignificant market-wide reactions, indicating weak evidence of semi-strong efficiency. However, notable cross-firm heterogeneity emerges export-oriented and foreign-revenue-generating firms showed greater resilience, while companies dependent on imported inputs experienced sharper declines. These findings highlight how differences in currency exposure shape firms’ sensitivity to exchange rate shocks in emerging markets with recent dual-rate dynamics. From a practical perspective, the results emphasise the importance of transparent policy communication during major currency adjustments and underline the need for investors to account for firms’ FX risk profiles when constructing portfolios in devaluation-prone environments. The findings also offer insights for regulators seeking to strengthen disclosure practices and improve informational efficiency in the Egyptian capital market.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.002 | 0.001 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.002 | 0.002 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.001 | 0.001 |
| Open science | 0.001 | 0.001 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".