Foreign holdings of Egyptian T-bills fell for the first time since the EGP was floated in November 2016 as maturing notes exceeded new purchases, Ahmed Feteha writes for Bloomberg. He says the drop in holding could suggest that demand for Egyptian debt is peaking. “The flow of new money and the appetite to renew maturing notes may be waning due to seasonal factors,” Samy Khallaf, head of the Finance Ministry’s public debt division, said noting that overseas investors held EGP 330.0 bn worth of T-bills, down from EGP 333.6 bn a week earlier. “We’re still seeing purchases from foreign investors, but maturities this quarter are larger than the previous one … We’re also entering the holiday season so it is normal to see lower activity from foreign funds,” Khallaf explained. This comes as the CBE sold EUR 692.9 mn in one-year T-bills yesterday, Reuters reported. The EUR-denominated T-bills carried an average yield of 1.499%. The average yield on Egypt’s three- and seven-year treasury bonds rose in yesterday’s auctions.

Some foreign money managers who have been bullish on Egypt’s debt see the play waning given the potential that the CBE may cut interest rates this coming Thursday. High rates today have made Egypt’s bonds one of the most attractive emerging market debts, and political concerns loom in their minds, writes Ira Iosebashvili for the Wall Street Journal. “The [carry] trade is a little bit exhausted,” said Jan Dehn, head of research at Ashmore Group, which owned Egypt’s local currency bonds earlier this year. “I think it’s on its last legs,” he added. Jim Barrineau, co-head of emerging-market debt at Schroders, said concerns over high inflation pushed him recently to sell Egyptian local currency bonds his firm had invested in earlier this year. “It was a very good trade,” Barrineau said. “Better to sell now than … when everyone is trying to get out at once.” Y’all go enjoy your negative rates in Europe, okay?

One factor which may keep the bonds at play for investors are guarantees of repatriation, argues Iosebashvili. “One of the things we wanted to know was whether we can get our [greenbacks] back,” said Colm McDonagh, head of emerging-markets fixed income at U.K.-based Insight Investment. He said his firm holds Egyptian bonds, which it purchased in February.