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Historic political shake-up of area encouraging investors

Ceasefire expected to take pressure off Israel's financial resources

Major funds increasing positions in Egypt

Hopes for resolution of Lebanon's crisis driving up its bonds

(Recasts heading, adds emergency Arab top in paragraph 8)

By Marc Jones and Steven Scheer

LONDON/JERUSALEM, Feb 9 (Reuters) - A historical shake-up of the Middle East is beginning to draw international investors, warming to the potential customers of relative peace and economic healing after so much turmoil.

President Donald Trump's proposal that the U.S. take control of Gaza might have tossed a curveball into the mix, however the delicate ceasefire in the Israel-Hamas war, Bashar al-Assad's ouster from Syria, raovatonline.org a weakened Iran and a new government in Lebanon have actually fed hopes of a reset.

Egypt, the region's most populous country and dokuwiki.stream a crucial arbitrator in the recent peace talks, has just managed its very first dollar financial obligation sale in four years. Not too long ago it was dealing with economic meltdown.

Investors have begun purchasing up Israel's bonds again, forum.batman.gainedge.org and those of Lebanon, betting that Beirut can lastly begin repairing its intertwined political, economic and monetary crises.

"The last couple of months have quite reshaped the area and embeded in play a very various dynamic in a best-case scenario," Charlie Robertson, a veteran emerging market expert at FIM Partners, said.

The concern is whether Trump's strategy for Gaza inflames tensions again, he added.

Trump's call to "clear out" Gaza and produce a "Riviera of the Middle East" in the enclave was with worldwide condemnation.

Reacting to the uproar, Egypt said on Sunday it would host an emergency Arab summit on February 27 to discuss what it explained as "major" developments for Palestinians.

Credit rating company S&P Global has signified it will get rid of Israel's downgrade warning if the ceasefire lasts. It acknowledges the complexities, loft.awardspace.info but it is a welcome possibility as Israel readies its first significant financial obligation sale given that the truce was signed.

(UN)PREDICTABILITY

Michael Fertik, a U.S. investor and addsub.wiki CEO of expert system company Modelcode.ai, said the easing of tensions had added to his choice to open an Israeli subsidiary.

He is eager to hire knowledgeable regional software developers, but geopolitics have been an element too.

"With Trump in the White House, nobody questions the United States has Israel ´ s back in a battle," he said, explaining how it supplied predictability even if the war re-ignites.

Having mainly remained away when Israel increase costs on the war, bond investors are also beginning to come back, main bank information programs.

Economy Minister Nir Barkat told Reuters in an interview last month that he will be looking for a more generous spending bundle focusing on "bold economic development."

The snag for stock financiers however, is that Israel was one of the best performing markets in the world in the 18 months after the October 7, 2023 attacks. Since the ceasefire - which has actually accompanied a substantial U.S. tech selloff - it has remained in retreat.

"During 2024, I believe we found out that the market is not truly afraid of the war but rather the internal political dispute and tensions," said Sabina Levy, head of research at Leader Capital Markets in Tel Aviv.

And if the ceasefire buckles? "It is affordable to assume a negative reaction."

Some investors have already reacted terribly to Trump's surprise Gaza move.

Yerlan Syzdykov, head of emerging markets at Europe's greatest asset manager Amundi, said his firm had purchased up Egypt's bonds after the ceasefire deal, but Trump's strategy - which anticipates Cairo and Jordan accepting 2 million Palestinian refugees - has actually changed that.

Both nations have baulked at Trump's concept but the threat is, Syzdykov explained, that the U.S. president uses Egypt's dependence on bilateral and IMF support to try to strong arm the nation offered its current brush with a full-blown recession.

Reducing the attacks by Yemen's Houthi fighters on ships in the Red Sea likewise remains essential. The country lost $7 billion - more than 60% - of its Suez Canal incomes in 2015 as shippers diverted around Africa instead of risk ambush.

"Markets are not likely to like the idea of Egypt losing such (bilateral and multilateral) support, and we are taking a more cautious position to see how these settlements will unfold," Syzdykov said.

REBUILD AND RESTRUCTURE

Others expect the restoring of bombed homes and facilities in Syria and elsewhere to be an opportunity for Turkey's heavyweight building and construction companies.

Trump's Middle East envoy, Steve Witkoff, has said it could take 10 to 15 years to restore Gaza. The World Bank, meanwhile, puts Lebanon's damage at $8.5 billion, roughly 35% of its GDP.

Beirut's default-stricken bonds more than doubled in cost when it ended up being clear in September that Hezbollah's grip in Lebanon was being compromised and have continued to increase on hopes the nation's crisis is dealt with.

Lebanon's brand-new President Michel Aoun's very first state see will be to Saudi Arabia, a country seen as a possible essential fan, and accc.rcec.sinica.edu.tw one that likely sees this as an opportunity to additional remove Lebanon from Iran's sphere of impact.

Bondholders say there have been preliminary contacts with the brand-new authorities too.

"Lebanon could be a big story in 2025 if we make development towards a financial obligation restructuring," Magda Branet, head of emerging markets repaired earnings at AXA Investment Managers, said.

"It is not going to be simple" though she included, given the nation's track record, the $45 billion of debt that needs reworking which Lebanese savers might see some of their cash taken by the government as part of the plan.

(Reporting by Marc Jones and bphomesteading.com Steve Scheer; Editing by Sharon Singleton and William Mallard)