Egypt seeks new debt investors in Asia

By BLOOMBERG

CAIRO • Egypt is in talks with Belgium-based Euroclear to settle its domestic debt transactions and will embark on a non-deal bond roadshow through Asia this year, part of a drive to attract more overseas investors and reduce borrowing costs.

“We are in continuous talks with Euroclear and we are trying to finalise this issue as soon as possible,” Finance Minister Mohamed Maait said in an interview. “This step is very useful for the country; it is expected to attract more international investors to the Egyptian debt market.”

Euroclear settles transactions in international and domestic securities in dozens of countries. Enlisting its services would make it easier for foreigners, who currently have to go through a local bank, to invest in Egyptian pound-denominated debt.

Though the pound has remained relatively stable, demand for Egyptian domestic debt has fallen this year as volatility sweeps through emerging markets (EMs).

More than US$6 billion (RM24.84 billion) flowed out of local treasury bonds and bills in the three months from the end of April.

Faltering demand has spurred an increase in yields across the board, adding to Egypt’s debt servicing costs just as the country is seeking to curtail its deficit. Egypt has cancelled all four Treasury bond auctions this month after investors demanded higher yields than it was willing to stomach.

As the EMs rout makes investors more cautious, the government is looking to expand its options and will test appetite in Asia.

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