Egyptian 10-year bonds to remain “extremely attractive” as interest rates come down -Goldman Sachs: Egyptian 10-year bonds are an “extremely attractive” option for investors looking for higher yields and duration return as the country begins to cut its short-term interest rates, Goldman Sachs Vice President for MENA economics research Farouk Soussa tells Bloomberg TV (watch, runtime: 4:58). Soussa tells the news information service that Egypt’s cooling inflation also means that real interest rates stand out among regional and emerging market peers. Investing in long-term bonds “tends to be a bit more sticky, but the liquidity in the Egyptian market has improved to the extent that our clients are now able to trade in and out of those trades and it makes it much more attractive,” he says.

10-year yields fall 87 bps: Average yields on 10-year treasuries fell to 14.682% in an auction yesterday, down from 15.551% in an auction earlier this month, CBE data shows. Yields on 10-years in the secondary market fell slightly to 15.36% yesterday, retaining Egypt’s position as offering the second highest return on 10-year bonds in the world, after Turkey.

Don’t expect a mass exodus of portfolio investments from Egypt: Soussa expects short-term interest rates to continue coming down, but says portfolio money is unlikely to “rush out of the Egyptian market.” Instead, portfolio investments will stick around and “may even build up going forward,” which will bode well for the EGP and could lead to further appreciation of the currency.