Egypt's stocks rallied on Wednesday taking a positive signal from the central bank move to clear a backlog owed to foreign investors, analysts told Ahram Online.

 

Benchmark index, EGX30, bounced 3.5 percent to register 6,649 points up from 6,321 points a week before.

 

In the first clear step since starting his tenure this week, Tarek Amer, the central bank governnor, cleared the entire backlog owed to foreign investors with $547.2 million.

 

The heavyweight listed lender Commercial International Bank (CIB) rose by 3.9 percent to be sold at LE46.27 per share.

 

"The clearing of the central bank for foreigners queue had a positive influence on the bourse and specifically the CIB stock which has the biggest weight in the main index," Monsef Morsi, sector head financial at Cairo-based CI Capital, told Ahram Online.

 

"The central bank move sends a signal to foreign investors whose backlog has been delayed since 2011," Osama Mourad, chairman at Acumen Securities and Brokerage, told Ahram Online.

 

The Egyptian economy was hit following a popular uprising in 2011 that lead to a political upheaval taking its toll on tourism and foreign investments, the country's main sources of foreign currency.

 

Gulf aid, which supported Egypt with billions of dollars in the aftermath of two mass protests ending the rule of two presidents, has faded away uncovering a foreign exchange crisis in the absence of sources for foreign currency.

 

Foreign currency reserves dipped to $16.4 billion in October, down from $36 billion before the 2011 uprising.

 

"The central bank took this move to attract foreign investments," Mourad said.

 

This is only one of several moves to attract foreign investors, but other moves including further clarification of foreign exchange policy are expected soon, Monsef said.

 

Egyptians were net buyers to the tune of LE102 million while non-Arab foreign investors were sellers at LE132.5 million.

 

Out of 166 traded stocks, 9 declined and 140 were gainers amid daily stock turnover of LE843.7 million.

 

Global Telecom Holding (GTH) and Orascom Telecom for Media and Technology were the biggest gainers in the main index, climbing 9.41 percent to LE1.87 per share and 5.45 percent to LE0.58 per share respectively.

 

GTH said in a statement to the bourse that it 'does not have any material events unannounced' in response to rumours on an offer by Vimpelcom to the company at a price of LE2.3 per share.

 

Edita food industries declined 2.49 percent to LE33 per share.

 

Broader index, EGX70, increased 2.93 percent.