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Rand Merchant Bank: Egypt's return to the JPMorgan bond index could attract $ 4.8 billion

The Rand Merchant Bank (RMB) estimated on Monday that Egypt's anticipated return to the JPMorgan index of emerging market government bonds could attract $ 4.8 billion in new inflows and lift the Egyptian pound by up to 5% against the dollar.


Egypt, which was excluded from the index following the 2011 uprising, has been working for more than two years to be re-listed, and Neville Mandemika, an economist at RMB, said the re-listing of Egypt is expected by the second half of this year.


RMB said that Egypt had performed well in terms of improving its macroeconomic fundamentals after it completed a financing program with the International Monetary Fund in 2019 and achieved steady primary budget surpluses that paved the way for a reduction in the debt-to-GDP ratio.


He added that the total nominal value of Egypt's bonds due in more than two and a half years amounts to $ 28.2 billion, which meets the criteria for joining the index.


This would give Egypt a weight of 2% on the index, and would transfer some of its assets under management by about $ 240 billion.


Mandimika explained that yields tend to decline an average of 130 basis points before listing.

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