BofA rec­om­mends buy­ing Egyp­tian T-bills

Kuwait Times - - BUSINESS -

DUBAI:

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.

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