Back to the complete issue
Thursday, 10 October 2019

Egypt’s USD bonds fall amid anticipation of new issuance

 Investors shy away from Egypt’s USD-denominated bonds in anticipation of new issuance: Egypt’s 30-year USD-denominated bonds dropped USD 0.009 to USD 1.053, its biggest fall in one day since protests last month, and the 2047 bond fell USD 0.003 to USD 1.04, its lowest in almost two months, Reuters reported. “There’s been some noise about a new [USD] bond issuance coming out of Egypt soon and, given the heavy investor positioning, we might expect some selling as investors make space in their portfolios to purchase the new issue in the primary market,” said Farouk Soussa, senior Middle East and North Africa economist with Goldman Sachs. Soussa also pointed to concerns about supply. Egypt plans to issue USD 3-7 bn in international bonds during FY2019-2020, Finance Minister Mohamed Maait said last month.

Other potential causes for the fall: Concerns from investors that Egypt may take steps to reverse austerity measures such as subsidy cuts to calm public discontent could have also been behind today’s fall, Capital Economics’ Jason Tuvey told the newswire. “There might be concern that if protests escalate then Egypt’s debt ratio could be put on an upward path,” said Tuvey. The government last month restored some 1.8 mn people to subsidy rolls who had previously been disqualified for earning too much, and on Tuesday some members of parliament called on the government to take action on wages, pensions, and social programs.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.