BofA recommends buying Egyptian T-bills
In a sign of foreign investors’ improving sentiment towards Egypt after it floated its currency, analysts at Bank of America Merrill Lynch said they recommended buying Egyptian Treasury bills. Investors should buy six-month T-bills without hedging them to benefit from high yields and the likelihood that the Egyptian pound has bottomed against the US dollar, after tumbling in the initial days after its Nov 3 float, Bank of America analysts said in a note dated Nov 11. Bank of America said Egyptian T-bills were a typical carry trade to be held to maturity; it said it would enter the trade at an exchange rate of 16.5 pounds to the dollar, aiming for the pound to rebound eventually to 15. Egyptian T-bills were popular among foreign investors until 2011, when political instability ushered in years of uncertainty about the exchange rate and economy.