Egypt’s stocks continued their rally on Thursday, as institutional investors continued to show appetite following the sharpest devaluation of the local currency in years.

The benchmark EGX30 index was up 3.56 percent at market close, to 7,486 points, following a week of gains prompted by the Egyptian Central Bank’s move on Monday.

"The steep devaluation freed up cash that had been sitting on the sidelines, as the major overhang on the market was the overvalued pound,” Sherif Shebl, Associate at the Foreign Sales Desk, at Cairo-based Pharos Securities, told Ahram Online in a phone interview. 

Commercial International Bank (CIB), which accounts for about 22 percent of the main index market cap, saw its share price rise a further 1.95 percent to EGP 40.24 after a week of gains.

Leading investment bank EFG Hermes saw its share price soar by 13.83 percent to EGP 10.78 after it announced the sale of a 40 percent stake in majority-owned subsidiary Credit Libanais, at $33 a share, with the intention of selling the remainder of its 63.7 percent stake by end of May 2017.

Egypt’s main index had already climbed 10 percent this week since the Central Bank of Egypt (CBE) allowed an overvalued pound to depreciate by 14 percent on Monday, and announced a more flexible exchange rate policy, a move praised by economists, bankers, and industrialists. 

The slight appreciation of the pound at a CBE special FX auction from EGP 8.85 to EGP 8.78 to the dollar on Wednesday had no effect on the positive sentiment in the market, as it is seen as a sign of the CBE's welcome policy of more flexibility in the exchange rate regime, Shebl explained. 

Foreign investors were the main net-buyers, to the tune of some EGP 105.8 million, followed by Arab investors for EGP 23 million, while local and retail investors were net-sellers, bourse data showed.