Egyptian blue chips jumped for a second straight day on Sunday after the central bank floated its currency last week, raising hopes for new inflows of funds, while Saudi Arabia gained as last month's successful international bond issue continued to spur buying.
The Egyptian blue chip index added 6.1 percent in heavy trade to reach its highest level since April 2015. It was the index's biggest rise since March this year. The broader EGX100 index gained 3.8 percent.
Commercial International Bank (CIB) soared its 10 percent daily limit. As the country's largest listed bank, CIB is expected to benefit from an increase in trade and financial flows if the currency devaluation succeeds and foreign exchange business returns to banks from the black market.
The index gained 3.4 percent on Thursday, when the central bank abandoned the Egyptian pound's peg of 8.8 to the US dollar and let it drop to around 15.50. On Sunday, the pound fell further to around 16, but the decline was much less than many bankers had expected, which reassured some investors.
"Today the market performance surpassed Thursday's because traders have a better knowledge of how the market is pricing the currency after years of it being artificially constrained," said Ibrahim Nimr, technical analyst at Cairo's Naeem Brokerage.
Nimr noted that the liberalisation of the currency meant Egypt was closer to securing a $12 billion International Monetary Fund loan, which he thought would keep the market optimistic for a few months.
He predicted the index, which closed on Sunday at 9,350 points, would probably break 10,000 points in its current rally. Credit Agricole rocketed 17 percent after reporting that nine-month consolidated net profit climbed to 956.7 million Egyptian pounds ($59.8 million) from 748.3 million pounds a year earlier.
Global Telecom Holding surged 7.5 percent to 5.48 Egyptian pounds. EFG Hermes said in a note that the stock should benefit from the devaluation as it reprices to reflect the U.S dollar value of its London-listed global depository receipts.
Saudi Arabia's main index rose 0.8 percent taking its gains since the bond issue to 11.8 percent. Banks continued to firm, with Saudi Hollandi Bank adding 1.6 percent.
Petrochemical shares traded lower early in the day but then rebounded and Saudi Kayan jumped 4.5 percent. Domestic-demand oriented shares were also strong, with apparel retailer Fawaz Alhokair gaining 5.2 percent.
Dubai's index was the worst performer in the region, falling 0.6 percent. DXB Entertainments pulled back 2.6 percent. Qatar's index slipped 0.1 percent to 9,949 points, a four-month low, but closed 72 points off its intra-day low. Commodities producer Industries Qatar dropped 1.3 percent but mobile telephone operator Vodafone Qatar closed up 1.1 percent.