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

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

Egyptian banks considered biggest investors in bonds, T-bills

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.

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