Reason #321 to be optimistic about the outlook for the economy: Foreign investors bought 97.5-98.5% of the T-bills Egypt sold on Thursday, Samy Khallaf, head of the public debt department at the Finance Ministry, told Bloomberg. The demand pulled the average yield on the six-month T-bills by almost 200 bps, the most on record, according to data compiled by Bloomberg. The average yield on one-year securities dropped by 187 bps as well. This adds to the evidence that “confidence in the economy is growing” after the EGP float, Bloomberg’s Ahmed Feteha writes.

The drop continued on Sunday as the treasury auction saw rates on 266-day bills drop by nearly 292 bps as well, according to Al Borsa, with foreign investors buying EGP 2.4 bn worth of 91-day and 266-day bills. “This decline in yields follows a previous decline so it’s a big drop and this is mainly from foreign investor interest… For foreigners these rates don’t exist anywhere else," one banker told Reuters. Another banker expects the rate decrease to continue, saying “the decline in yields is rapid and aggressive and I believe it can continue. Historically foreign investors used to buy Egyptian local debt since the previous managed float and yields used to drop below the corridor rate.”

…Egypt’s economy is being “overhauled” and investors are betting on an earnings recovery and taking advantage of cheaper USD-based valuations, John Sfakianakis, director of economic research at the Gulf Research Centre in Riyadh, writes for The National. “Egypt is taking the necessary steps to improve its economy, and slowly signs are emerging that this effort is paying off,” he writes. Sfakianakis expects the government to “tighten Egypt’s fiscal position, improve the business environment and liberalise the economy” within the next few months.