- After more than a decade of its exit, Egypt has officially returned to the JPMorgan index, on Jan. 31.It exited from the index in 2011.
- Egypt has been endeavouring to re-join the “JP Morgan” index for the last almost three years by fulfilling the bank’s requirements.
After more than a decade of its exit, Egypt has officially returned to the JPMorgan index, on Jan. 31.It exited from the index in 2011.
Egypt has been endeavouring to re-join the “JP Morgan” index for the last almost three years by fulfilling the bank’s requirements. The conditions included extending the life of government debt, adjusting the yield curve, and raising the participation rate of foreign investors in government financial instruments and so on. Last October JPMorgan Chase & Co. announced its approval of Egypt’s inclusion in its emerging market government bond index as of the end of 2022 with an estimated weight of about 1.85 percent. Egypt was placed on positive monitoring of the index in April, after a steady improvement in liquidity and investor access to local government bond markets.
About 14 categories of government bonds denominated in Egyptian pounds valued at $26 billion, are eligible for the benchmark index. The bonds with duration between 9 months and two years have an average return of 14.9 percent. Experts have estimated that Egypt’s local currency bond market would benefit with returns ranging between $1.4 billion and $2.2 billion by joining the index.
Minister of Finance Mohamed Maait was hopeful that Egypt’s accession to J.P. Morgan government bond index for emerging markets, could help attract more foreign investors and foreign currency inflows. He added that with Egypt’s accession to the “J. P. Morgan,” $1 billion of new additional investments will be pumped into the Egyptian government securities market, including treasury bills and bonds. However, nalysts are of the view that the Federal Reserve taper and a global rise in interest rates could trigger another wave of selloffs of Egyptian T-bills by foreign investors and renewed capital outflows.
