Lo­cal cur­rency T-bonds bal­ances fell EGP 5.1bn at end-Fe­bru­ary 2018

EGYP­TIAN BANKS CON­SID­ERED BIG­GEST IN­VESTORS IN BONDS, T-BILLS

The Daily News Egypt - - News - By Hos­sam Mounir

The vol­ume of the out­stand­ing bal­ances of trea­sury bonds (T-bonds) owed by the gov­ern­ment at the end of Fe­bru­ary 2018 fell by EGP 5.1bn to set­tle at EGP 693.23bn ver­sus EGP 698.34bn in Jan­uary 2018, ac­cord­ing to the Min­istry of Fi­nance

Banks work­ing in the Egyp­tian mar­ket are con­sid­ered the big­gest in­vestors in bonds and trea­sury bills (T-bills), which the gov­ern­ment is­sues on a reg­u­lar ba­sis to cover the state’s bud­get deficit.

Trea­sury bonds and bills are pro­posed through 15 banks, which are the pri­mary deal­ers in the pri­mary mar­ket.These banks re­sell a por­tion of these bills and bonds in the sec­ondary mar­ket to re­tail in­vestors, as well as lo­cal and for­eign in­sti­tu­tions.

In a re­cent re­port, the min­istry ex­plained that the bonds’ yields reached EGP 692.53bn, with a re­turn rang­ing be­tween 11% and 18.75%, an aver­age of 14.2%.

The bonds were floated be­tween 18 Jan­uary 2005 and 20 Fe­bru­ary 2018, and they will be re­paid be­tween 10 March 2018 and 7 Novem­ber 2027.

Ac­cord­ing to the min­istry, the bal­ances of the sec­ond type of bonds, zero-coupon ones, reached EGP 703.64m at the end of Jan­uary 2018.

These bonds carry an in­ter­est of 16.497% and 16.514%.

The bonds were of­fered be­tween 6 Septem­ber and 4 Oc­to­ber 2016, and they will be re­paid be­tween 6 March and 3 April 2018.

Daily News Egypt had ear­lier revealed the gov­ern­ment’s in­ten­tion to of­fer trea­sury bills and bonds worth EGP 415bn be­tween Jan­uary and March 2018, which would be the largest gov­ern­men­tal bor­row­ing through debt in­stru­ments since their in­tro­duc­tion.

The state suf­fers from a deficit in its gen­eral bud­get, es­ti­mated at about EGP 370bn in fis­cal year 2017/2018, ac­cord­ing to a pre­vi­ous state­ment by Fi­nance Min­is­ter Amr El-Garhy.

A plan by the Min­istry of Fi­nance, ob­tained by Daily News Egypt, re­veals that the gov­ern­ment is tar­get­ing is­su­ing trea­sury bills worth EGP 384bn and trea­sury bonds worth EGP 31bn.

It is note­wor­thy that the gov­ern­ment had bor­rowed about EGP 1.336tn through trea­sury bills and bonds in 2017.

The bonds’ yields reached EGP 692.53bn, with a re­turn rang­ing be­tween 11% and 18.75%, an aver­age of 14.2%.

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