Cairo, Egypt – Egyptian government debt instruments witnessed a record surge in demand today. The Central Bank successfully sold 5-year treasury bonds worth approximately EGP 88.43 billion, exceeding expectations by nearly five times the target of EGP 15 billion. This clearly indicates increased investor appetite for medium-term maturities.
Today’s bids: Record highs and mixed returns
The five-year bonds saw unprecedented demand, with investor bids surging to EGP 94.18 billion. This surge in demand was accompanied by a rise in the average yield for this term to 19.71%, compared to 19.4% in the previous auction.
In a related context, the results of the other tenders were as follows:
Three-year bonds: The Central Bank successfully raised EGP 21.1 billion (slightly above the target). The bond yield also saw a slight decrease to 20.98%.
Two-year bonds: The trend was conservative, with only EGP 7.7 billion worth of bonds sold (20% less than the target). The yield fell to 22.11%.
Sovereign bonds (3-year): These faced weak demand, raising only EGP 900 million out of a targeted EGP 5 billion. This occurred amidst a slight decline in the benchmark yield to 20.97%.
Investment map: Foreigners and the private sector are driving growth
In parallel with the auction results, the Central Bank’s statistical bulletin revealed fundamental shifts in the ownership structure at the end of last September. The growing role of foreign investment and the private sector was clearly evident, contrasted with the declining role of public sector banks.
Foreign investments continued their strong rise, reaching the equivalent of 2.149 trillion pounds by the end of September, compared to 2.104 trillion in August.
The private banking sector raised its holdings of treasury bills to EGP 849.9 billion, a notable increase from August levels of EGP 806.8 billion.
Public sector banks: Their investments recorded a significant decline, settling at 577.8 billion pounds, compared to 656.1 billion in the previous month.
Specialized banks: Their investments witnessed a slight decrease, reaching 126.8 billion pounds.
