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Wednesday, 26 September 2018

We’ll call off bond sales until yields stabilize –Maait

**#2 We’ll call off bond sales anytime yields get out of hand –Maait: The Finance Ministry will continue to cancel auctions of domestic bonds so long as yields remain high, Finance Minister Mohamed Maait said on Tuesday. Calling off bond auctions is a crucial tool in Egypt’s bid to keep its debt service obligations in check going forward, Maait is quoted by the domestic press as having said. His remarks came after the Finance Ministry called off its fourth treasury bond auction in as many weeks on Monday. Would-be buyers were asking for yields as high as 20% on five- and 10-year treasury bonds, a trader said.

Egypt is looking to make it easier for foreign investors to get into bonds and will do a non-deal roadshow in Asia to drum up interest,Maait told Bloomberg in a separate interview. Maait has opened talks with Belgium’s Euroclear to facilitate the settlement of domestic debt for overseas investors, who can currently only access the debt market through a handful of local banks with licenses to operate as primary dealers. “Euroclear settles transactions in international and domestic securities in dozens of countries. Enlisting its services would make it easier for foreigners,” Bloomberg quotes the minister as saying.

Testing appetite in Asia: Officials will head to Asia as early as the week after next to test appetite for potential JPY- and CNY-denominated bonds (called “samurai” and “panda” bonds in the trade), Reuters’ Arabic service quotes Maait as having said. Stops will include Korea, China, Singapore, Malaysia and possibly Japan. Maait’s tip on the Asian roadshow comes less than two weeks after he suggested the government could look east for liquidity as yields on domestic debt got out of hand. The ministry is now looking for bankers to lead the Asian roadshow.

El Sisi to unveil debt reduction strategy in two weeks’ time: Speaking of debt, President Abdel Fattah El Sisi is set to announce within two weeks a four-year strategy to reduce Egypt’s debt to 70% of GDP, Maait said at a meeting with members of the French Chamber of Commerce yesterday, Al Mal reports. Maait had said earlier this month that his ministry is drafting a comprehensive debt control strategy that is set to be the cornerstone of the government’s fiscal policy agenda. The strategy would set limits on both internal and external borrowing in a bid to bring down overall public debt levels. The country’s foreign debt levels at the end of FY2017-18 stood at USD 92.64 bn.

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