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Wednesday, 28 November 2018

Gov’t treasuries to trade on the EGX in 1Q2019

EXCLUSIVE- Gov’t treasuries to trade on the EGX in 1Q2019: The Madbouly government plans to begin selling treasuries on the EGX “on a trial basis” in 1Q2019, a government source told Enterprise. The source stressed that only long-term government bonds will be traded. The central bank is taking the lead on drafting the regulatory framework for the move, the source noted. The policy, which Finance Minister Mohamed Maait revealed to us exclusively back in July, is hoped to reduce yields on government bonds while also drawing in investors to treasury auctions. The Finance Ministry is amending the Public Finances Act to accommodate for the move, the source said. The source did not reveal when this regulatory framework would be introduced in the House of Representatives.

Part of a wider policy to expand reach of government bonds: The move is part of a series of actions taken by the government and CBE to draw new investors to government auctions. The CBE and Finance Ministry are looking to shake up the current bond auction system by establishing a central securities depository that will include a primary and secondary market auction systems, an electronic platform, a date-collection operation and a yield pricing monitor. Furthermore, the government is hoping to have all of its government-issues securities available on Belgium-based clearing house Euroclear at the beginning of FY 2019-2020 to further open up the market.

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