Egypt enters JPMorgan's emerging market government bond index

CAIRO - 14 OCtober 2021: JPMorgan announced its approval of Egypt's inclusion in its emerging market government bond index, to be effective on January 31.

The estimated weight of Egypt in the index will be about 1.85 percent.

JPMorgan confirmed on Wednesday that about 14 categories of government bonds denominated in Egyptian pounds, with a total value of $26 billion, are eligible for the benchmark index, with an average return of 14.9 percent for those bonds with duration between 9 months and two years.

The bank's analysts indicated in April that Egypt's local currency bond market would benefit with returns ranging between $1.4 billion and $2.2 billion if Egyptian bonds joined the index.

Egypt is also seeking to include its domestic debt in Euroclear, the largest European clearing house for the settlement of securities transactions

"Egypt is still discussing some technical issues and hopes to join Euroclear in a few months, but not by an earlier target date of November,” Egypt's Finance Minister Mohamed Maait said earlier.

The index team at JPMorgan put Egypt on positive monitoring of the index in April, after a steady improvement in liquidity and investor access to local government bond markets.

On September 23, Egypt closed the process of offering bonds worth $3 billion in three tranches, and collected $3.75 billion from another issuance in three tranches in February, after issuing green bonds for the first time worth $750 million a year ago. It is the first sale of bonds dedicated to environmentally friendly uses from a Middle Eastern country.

Egypt is preparing to issue the first sovereign sukuk offering during the first half of 2022, with the aim of providing financing for investment projects targeted by the Egyptian government.