Egypt's stock market rallied for the first time this week on renewed hopes on Wednesday that a lucrative Mobinil deal would materialise.
The benchmark EGX30 index rose 2.05 per cent for the day to reach 4,652 points, bouncing back from an almost two-month low the day before.
Total market turnover on Tuesday, meanwhile, edged up to LE425 million (roughly $71 million).
Mobinil and Orascom Telecom and Media Technology (OTMT) led the surge, accounting for a total of LE158 million in turnover or 37 per cent of the day's total trading. The two companies registered daily gains of 9.55 and 7.2 per cent, respectively.
Investors panicked in Tuesday trading on news that Egypt's new telecommunication law would require a 20 per cent Egyptian ownership minimum for all telecommunications ventures – meaning that the long-awaited sale of a 30 per cent stake in mobile carrier Mobinil to France Telecom (at LE202.5 per share) might not materialise.
Accordingly, shares in Mobinil – the only mobile operator listed on the exchange – plummeted 7 per cent on Tuesday. On Tuesday evening, however, news emerged that that the law would only be applied to new mobile ventures, causing the telecoms sector to rally on Wednesday.
Shares in Mobinil closed out the day at LE177. Shares in OTMT, meanwhile, a main shareholder in Mobinil, finished the day at LE1.34.
"Inaccurate news is circulated one day and is refuted the next," said Mohamed Metwally, an equity trader at Cairo-based Prime Holdings. "Who's making money here?"
Non-Arab foreign investors were the main net sellers on Wednesday, registering some LE75.5 million in total sales. Egyptian investors, meanwhile, represented net buyers at LE74.5 million.
Other blue chips to capitalise on the telecoms-led market surge also registered significant gains.
Despite less-than-impressive 2011 results released Tuesday, Ezz Steel – the Middle East's largest steelmaker – gained 5 per cent to close the day out at LE6.44 per share.
Similarly, shares in multinational Egyptian investment house EFG-Hermes rose 2.61 per cent – also despite disappointing financial results.
"It's normal for shares to rebound after a week of declines, since prices have become much more attractive," Metwally explained.
Of 176 shares listed on the exchange, 146 traded into the green on Wednesday while 17 registered losses.