Tuesday 25, September 2018 by Bloomberg

Egypt plans foray into Asia bond market with non-deal roadshow

 

Egypt has raised the possibility of issuing Samurai or Panda bonds in the past, but the planned “non-deal roadshows” will be its first tangible foray into Asia.

 Egyptian officials will tour Asia later this year to test interest in the country’s debt, part of government efforts to expand borrowing options as volatility roils emerging markets, Finance Minister Mohamed Maait said.

Egypt has raised the possibility of issuing Samurai or Panda bonds in the past, but the planned “non-deal roadshows” will be its first tangible foray into Asia.

“We have been told that there are big opportunities in Asian markets and many funds in it are willing to invest, so we will go and tell them the Egypt story and about our reform program,” Maait said in an interview. “We are monitoring international markets and want to look into several potential markets.”

Government plans to issue more international bonds this fiscal year are being tested by the crisis sweeping emerging markets from Turkey to Argentina, with officials now facing the prospect of pricier borrowing. The rout has already pushed up yields on Egyptian pound-denominated treasury bills and bonds in recent weeks, adding to the cost of servicing the country’s debt pile just as the government is seeking to curb its budget deficit.

Egypt will not seek to sell any debt during its roadshows, but will test appetite among potential investors in Hong Kong, Malaysia, Korea, China, Singapore and possibly Japan. Finance ministry officials also plan to meet investors in Europe before the year’s out.

The finance ministry is in talks with banks about managing the roadshows, Maait said.

Egypt has sold more than $13 billion in foreign-currency denominated bonds since it lifted most currency controls, raised interest rates and cut subsidies in November 2016, to help secure a $12 billion loan from the International Monetary Fund. Its first euro-denominated bond, issued in April, was oversubscribed.

Features & Analyses

Economics Adapting to a new era

  Abdullah Al-Fozan, Chairman of KPMG MESA and KPMG Saudi Arabia, provides an exclusive commentary on the Kingdom’s business… read more