The CASE has remained buoyant ever since, although there continues to be uncertainty about how long it can last. Blue-chip stocks sagged briefly in July as investors pulled back to see where the market would take them, while disappointing bank results have trapped the financial sector in flat trading.

'There are two reasons the rally has continued. First, stock prices were pretty beaten up at the end of last year and, second, since devaluation the movement in interest rates and interbank rates has meant that people have been looking to put their money into either real estate - which is only beginning to recover - or into stocks,' says a local financial analyst. 'But in dollar terms it's not as good as it looks. All bull markets overshoot, and there is going to be a realisation at some stage that these stocks are overvalued.'

The twin horns of the bull market have been the telecoms and construction sectors, led by sister companies Orascom Telecom (OT) and Orascom Construction Industries (OCI). OCI stock put in a remarkable performance at the beginning of the year, gaining 104 per cent in the three months ending 20 April and outperforming the local Hermes index by 57 per cent. Long before the market rally, another burgeoning family business, Oriental Weavers, made steady headway and had gained 157 per cent in the 12 months up to April.

The rally continued in the summer months - barring an anticipated correction in July - with the cement industry in particular generating strong interest from foreign and local investors. A brief contest over a stake in Suez Cement mirrored the year-long cycle of bids and counter-bids that has characterised the battle for a controlling stake in Misr Beni Suef Cement (MSBC). The share prices of both companies rallied dramatically with each new drip of news over new bids, although the Capital Markets Authority (CMA) reprimanded Ciments Francais for 'making unclear and non-committal statements' about a possible increase in its stake in Suez - an option it is unable to exercise until October. The CMA announced in early July that it was also launching an investigation into an earlier $60 million bid for MSBC by an apparently non-existent Saudi company, which had bolstered the company's share price.

Active foreign investor interest helped to boost telecoms stocks once again towards the end of September, and the broad-based Hermes index reached its highest close on 1 October. At £E 57.12, OT shares were riding high at the close of business on the back of expected strong first-half results, due to be announced shortly after the close of trading. Some 8.5 million in OT shares changed hands, while local GSM operator Egyptian Company for Mobile Services (MobiNil) came in a close second with £E 7.4 million of daily turnover. Trading in most other sectors has been sluggish in recent weeks, although cement stocks continue to buck the trend. MSBC was busily adding to its stock as rumours spread once again of foreign investor interest in the company.

Exchange rate: $1=£E 6. 15