CAIRO: Egypt announced on Friday that it plans to tap into the Eurobond market for some $1-1.5 billion within the next few weeks. It was well received by analysts and is the first such issue since 2007. “The markets are favorable. There is a huge demand from investors in London, New York and Asia,” Finance Minister Youssef Boutros Ghali told reporters. “We plan to test the outer limits of maturities. We are testing 20 to 30 years.” “We are contemplating $1bn to $1.5bn,” he said. According to analysts, the issue had not been expected so soon, but they believe the positive response given the low interests rates worldwide and the growing interest in investing in Egypt is part of the government's move. “It does come as a bit of a surprise,” Tarek Elalaily of Beltone Financial said in comments published by Gulf Daily News. “More people are starting to look at frontier and emerging markets … It does make sense for an international investor to diversify sovereign bond portfolio with an allocation to Egypt.” Egypt has emerged from the world financial crisis relatively unscathed, as other nations continue to struggle. Europe is currently in shambles after the Greek economy basically collapsed in late February. But in Egypt, the economy grew 4.7 percent in the fiscal year ending last June and the government last month forecast 5.5 percent growth in current fiscal year. Boutros Ghali said the bond issue was not designed to fund the budget deficit. “I am doing that very comfortably domestically,” he said. He said the deficit for the current fiscal year could be lower than the government's estimate of 98 billion Egyptian pounds ($18 billion), or 8.4 percent of predicted gross domestic product, which was based on economic growth of 4.7 percent. BM
