Egypt stocks surge into the green on Sunday's long-awaited announcement (Photo: AP)
Egyptian stocks have seen their sharpest climb since the 25 January uprising, fuelled by Sunday's announcement of the Muslim Brotherhood's Mohamed Morsi as the country's first freely elected civilian president.
The news sparked a night of jubilation among Brotherhood supporters massed on Cairo's landmark Tahrir Square.
The fireworks spread to the stock exchange on Monday with the benchmark EGX30 rocketing 7.59 per cent to finish the session at 4,482.5 points. Trading was briefly suspended after the broader EGX100 rose 5 per cent, its daily limit.
"The market was suffering in the last few days due to the precarious political situation and fears of violence if the Muslim Brotherhood lost," said Mohamed Metwaly, an equity trader at Cairo-based investment house Prime Securities.
"That seems to have passed now."
The main index fell to a five-month low on 14 June, two days before the bitterly divisive presidential runoff began. It had tumbled a total of 10 per cent since the first round of elections began in late May.
Sunday, however, say the beginnings of a revival as investors bet on a favourable outcome and the EGX30 closed a substantial 3.3 per cent up just an hour before Egypt's new president was named.
"Having a president -- whoever it is -- is of major importance after the parliament was dissolved. Egypt was without any elected power and that was not reassuring to the market," said Metwaly, predicting the upwards trend will continue but with less magnitude.
"Institutions are trying to regain the shares they sold recently, this will take some days," he explained.
Weighing against further gains, however, could be events on Tahrir where Brotherhood supporters and others say they will maintain their sit-in until the ruling military scraps recent its amendements to the country's constitution which limit the powers of the head of state.
They are also rejecting the 14 June court judgement which dissolved the Islamist-dominated parliament.
Other traders said the market euphoria could quickly evaporate if the new president is unable to form a government with broad political support.
"I wouldn't judge the market on one day. Let's wait for the rest of the week. One more speech and the market could drop," Osama Mourad, CEO of Arab Finance Brokerage, told Reuters.
Trading volumes were high, especially in comparison with averages over the last year.
Turnover was LE519.41 million ($85.7m) -- relatively high compared to averages over the last few months, but at least half the level of pre-uprising trade.
"This shows there is a lot of cash out of the market. The market won't return its pre-revolution levels without investors knowing the real state of the economy. We'll see that after political stability is restored," Metwaly said.
From the 184 shares traded on Monday, 177 gained in value while only five declined and two held steady.
The telecom sector led the market in terms of turnover, making up 36 per cent of total volume. Oracom Telecom Media and Technology saw the heaviest interest, with its shares leaping 5.93 per cent by close of play.
Other heavyweights saw similar gains. Egypt's largest listed firm, Orascom Construction Industries (OCI) surged 7.42 per cent, and the Commercial International Bank 9.65 per cent.
The Talaat Mostafa Group and Ezz Steel both rocketed by more than 9.6 per cent.
Egyptian investors were again the sole drivers behind the surge, buying LE50.29 million more in stocks than they sold. Foreigner and non-Egyptian Arab investors were net-sellers as they continued to reduce their exposure.
The broader EGX70 and EGX100 indexes gained 6.34 and 6.37 per cent, respectively.
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