Mubarak relinquished power to the military 18 days after an uprising led by a technologically savvy young population demanding jobs, freedoms and transparency.

Despite the political uncertainty of what lies ahead in the short-term, investors see the Egyptian "White Revolution," as many citizens are calling it, an opportunity to grab market-share in the region's most populous country.

"There will be democracy and transparency and these changes will lead to more economic growth," said Larry Seruma, managing principal at Nile Capital Management. "It's a great opportunity to invest in Egypt."

Prior to the revolution, Nile Capital's exposure to Egypt was 5 to 10 percent of its $4.79 million portfolio.

Under the 30-year rule of Mubarak, Egypt had been a critical ally of the United States and the main stability force in the Middle East. But now that his rule is over, many worry that a power vacuum could lead to a new regime that will oppose Western capitalism and be antagonistic toward Israel, the main U.S. ally in the region.

The outcome is yet to be seen. But government officials and investors in general, as well as the majority of Egyptians, are hopeful for a more open government and market.

"I think investment in Egypt itself could increase, say, a year from now as a new government comes in. If that government ends up being democratic in nature, then you could certainly see some improvement," said Bryant Evans, investment advisor and portfolio manager at Cozad Asset Management, in Champaign, Illinois.

Even the most powerful and wealthy businessmen in Egypt have been beating the drums of democracy and free markets as the best form of insurance for their investments.

"When you have less than, say, 10 percent of the population with checking accounts, there is potential for growth," said Karim Baghdady, managing director of Egyptian-based investment bank Beltone in New York.

"When you have a gray economy that is almost as large as the official GDP, if you are able to institutionalize that economy, then people will start securitizing their debts, able to borrow more, buy more. So there is a big domino effect."

'NOTHING HAS CHANGED MY VIEW'

Egyptian assets make up just a fraction of global emerging market funds, and the economy accounts for just about 0.3 percent of the MSCI emerging market index.

The Van Eck Market Vectors Egypt index exchange-traded fund rallied after Mubarak's resignation and set a daily volume record. It was last up 4.8 percent at $18.66.

Overall, emerging market equities have come under selling pressure due not only to Egypt's political ructions, but also on profit-taking from 2-1/2 year high benchmark indices.

Investors have pulled a net $6.27 billion from emerging market equity funds in the last three weeks, according to data from Lipper, a Thomson Reuters service.

However, when factoring the market price movements on the stocks, the assets under management in U.S.-domiciled funds are down $10.92 billion, or 5.6 percent since the week ended Jan. 26. Yet this is seen by some dedicated investors as an opportunity.

"I have kept my 'hold' on Egypt. I didn't have a 'sell' through this crisis. Nothing that happened today has changed my fundamental view that the outcome will be a good one," said Gabriel Sterne, senior economist at London-based Exotix, a brokerage catering to frontier market investors.

In the fixed income space, one fund manager said Egypt's U.S. dollar-denominated sovereign bonds have recovered a good portion of lost ground, but is still not convinced the debt issues are a bargain.

"I think people realize there was a panic in the bonds and short positions had to be covered, while a potentially more peaceful resolution to the protests, with limited escalation of violence, added to some relief buying," said Jeff Grills, co-head of emerging market debt portfolios at hedge fund Gramercy in Greenwich, Connecticut.

EXPECTANT MARKETS

The Egyptian pound had been falling steadily since political protests broke out on Jan 25. By Thursday, it traded at 5.887 to the U.S. dollar, marginally lower than Wednesday's close of 5.8775 but stronger than the six-year low of 5.960 reached before the central bank intervention on Tuesday.

The stock exchange has been shut after countrywide political protests caused the benchmark index to plunge 16 percent in two days, and analysts have warned of a renewed sell-off when trading resumes, most likely on Sunday.

The regulator said on Tuesday the exchange would suspend trade for a half hour if its broad 100-share index declined by 5 percent, and for longer if it fell by 10 percent.

The cost of insuring Egyptian sovereign debt against default or restructuring for five years fell 25 basis to 315 bps after Mubarak's Friday announcement, compared with 380 bps earlier in the day and 340 bps at Thursday's close, data monitor Markit said. They traded around 240 basis points before the start of the year.

Meanwhile, the euphoria on the streets of Cairo is fresh, the uncertainty high and the excitement for a better future palpable.

"The new government, whatever shape it takes, will be incentivized to provide work for a greater portion of the population to get them above the poverty line. There has been a lot of foreign investment to give it up. If anything, the economy will grow," said David Grayson, managing director of emerging markets brokerage firm Auerbach Grayson in New York.