An exchange-traded fund tracking Egyptian shares scaled a more than 21-month high in the run up to the country's presidential election, with former army chief Abdel Fattah al-Sisi set to secure another term amid economic troubles and war in the neighboring Gaza Strip.

The U.S.-listed VanEck Egypt Index ETF, tracking the MVIS Egypt Index, touched its highest level since February 2022 on Monday.

The fund, with nearly $21 million in net assets, has jumped nearly 5% so far this week and is up 29% in 2023.

It is among the top performing single country ETFs this year as local shares rally on worries about an economic crisis that has seen foreign currency drying up, inflation soaring and the Egyptian pound losing half its value against the dollar.

Egypt's blue-chip index has jumped 69% so far this year, hitting a record high last week.

Emerging market stocks often rally when the country's economy struggles because domestic investors see equities as a safer bet as companies either raise prices to offset inflation or benefit from a weakened currency if they export.

Investors are gearing up for Egypt's presidential election from Dec. 10-12, in which Sisi is expected to secure six more years.

"There is very little uncertainty over the outcome of the Egyptian election," said Hasnain Malik, head of equity research at Tellimer.

"The hope is that unpopular reforms and currency devaluation delayed by the election will then proceed."

Also in focus is the war in Gaza that borders Egypt, where Israeli strikes have killed at least 17,177 Palestinians since Oct. 7 when Hamas gunmen stormed into Israel and killed 1,400 Israelis.

While both Western and Gulf states have expressed solidarity with Egypt since the outbreak, no new aid has been announced.

The International Monetary Fund said on Thursday it is in discussions with Egypt on additional financing amid economic difficulties posed by the conflict.

(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Krishna Chandra Eluri)