Bonds
The conference focused on Egypt’s plans to create a robust retail bond market, a step that aligns with the Ministry’s broader mission to develop the financial sector, broaden the investor base, and stimulate economic growth
The minister highlighted that this is part of a broader strategy to diversify financing sources and attract both investors and savers to the local debt market.
At the start of this year, Egypt was delisted from the index due to the foreign exchange shortage, which stalled overseas investors from converting their investments
While Kouchouk's meetings were not open to the press, sources told Bloomberg that he informed foreign investors about the plan to sell approximately $3 billion in external debt across various tranches
These bonds mature between March 1, 2024, and February 16, 2061, with interest rates ranging from 3.875 percent to 10.875 percent, averaging at 7.386 percent.
The bonds – which would be issued in Emirati dirhams, Indian rupees, and Hong Kong dollars – are within the government’s efforts to diversify its financial strategy by entering new markets and developing various financial tools
Maait acknowledged that conducting a study on issuing bonds in Gulf currencies would require coordination with advisors and lawyers, emphasizing that the process will be challenging
Maait explained that the bond issuances reflect the country’s ability to diversify financing sources and tools, despite global economic challenges resulting from geopolitical tensions, and its eagerness to expand its base of international investors
The recent issuance is Egypt’s second, having offered its inaugural Samurai bonds back in March 2022, also issuing bonds worth $500 million which was, at the time, approximately ¥60 million
Citigroup recommended to investors to purchase Egyptian bonds maturing in 2031 and 2050, in what they described as “a barbell strategy”
This will be the second time that Egypt will issue Samurai bonds, having previously issued Samurai bonds worth $500 million back in 2022, considered the first of their kind in Egypt and the Middle East
This comes within the plans to issue various medium and long-term government bonds, which target new instruments such as sukuk, sustainable development bonds, and green bonds; this contributes to expanding the investor base and attracting additional liquidity to the government stock market, in a way that helps reduce the cost of debt.
The ministry is currently implementing some legal provisions related to capital gains tax, although this tax is not the main reason behind the decline in the number of companies listed on the stock exchange, she noted.
Maait stressed during his meeting with the South Korean ambassador in Cairo, Hong Jin-wook that this prompts the government to overcome all obstacles and solve any problems that Korean companies operating in Egypt may face in the tax and customs fields.
The government aims to continue expanding modern financing tools in the field of sustainable development.
The minister emphasized that the budget for the current year 2020/2021 has a growth in public expenditures by about 9 percent, and a growth in tax revenues by about 13 percent.
Maait confirmed, in a TV interview on, Saturday, that Egypt did not address a number of international banks regarding the offering, denying a previous Bloomberg report indicating this.
The offers had been sent to banks, and that the offers included dollar-and-euro- denominated bonds.
This came during the weekly meeting of the Egyptian Cabinet headed by Mostafa Madbouly, where he discussed many important files and issues.
According to Bloomberg, Societe Generale SA forecasts that the currency will gain another 4.5 percent to 15.35 per dollar in 2020.
