Citigroup: Egypt’s geopolitical location could catalyze new financing in coming months

Cairo – October 26, 2023: In a new research note on Thursday, International investment bank Citigroup Bank revealed its optimistic outlook towards Egypt’s bonds and noted that, due to its important geopolitical position, it will be able to receive new financing in the coming months.

Citigroup recommended to investors to purchase Egyptian bonds maturing in 2031 and 2050, in what they described as “a barbell strategy”.

“While geopolitical risks are likely to weigh on the region in the coming months, in our view Egypt’s geostrategic position may reinforce its bargaining power with its multilateral and Gulf Cooperation Council creditors and catalyze increased new financing,” Citigroup strategists said in a research note released on Thursday.

The country’s geopolitical location could be leveraged to access further financing, the note explained, adding that the “Egypt sovereign risk sentiment might be at an inflection point”.

“We are seeing some positive momentum in the privatization process while official sector support might be ramped up given the geopolitical context,” Citigroup wrote.

The note highlighted the consistent development of the government’s sales of assets and that it seems to be on track to achieve the targets set by the International Monetary Fund. The note was referencing Egypt’s $3 billion loan from the IMF.

According to Bloomberg, Egyptian dollar debt recorded the best performance in the Middle East since the start of Israel’s campaign against Gaza on October 7th, noting that Jordanian bonds were among the biggest losers.

Egypt is currently in discussions to receive fresh funding from Gulf countries, according to several news outlets citing sources, which have stated that the Central Bank of Egypt is close to acquiring new deposits amounting to approximately $5 billion from Saudi Arabia and the UAE.