Today Egypt has officially joined the JP Morgan Index for the government bonds of emerging markets (GBI-EM) after consistent efforts and debt issuance and market reforms for almost 3 years

 

-This inclusion confirms the confidence of the foreign investment community of Egypt’s improved fundaments and that Egypt is being put on the international radar as an investment destination.

 

-Today Egypt’s weight in the index is around 1.85% representing 14 Egyptian Bonds with a total value of around USD 26 billion.

 

-Egypt today has joined the JP Morgan Index for ESG’s with a weight of 1.18%, based on our green bonds.

 

-90% of the investors in the consultation voted for the inclusion of the Egyptian market

 

 

Dr. Mohamed Maait, the Minister of Finance, announced that Egypt has joined the JP Morgan GBI-EM Global Diversified Index with a weight of 1.85% as of the 31st of January 2022 representing 14 Egyptian Bonds with a total value of around USD 26 billion with an average yield of 14.9% and duration of 2.9 years.

 

His Excellency explained that Egypt has joined the watch list of the JP Morgan Index in April 2021 as a preliminary step before the index inclusion, whereby most investors surveyed by JP Morgan team during 2021 confirmed that they were able to access the market and transact bonds and FX without any hurdles. As a result, 90% of the investors in the consultation voted for the inclusion of the Egyptian market, which came as another reassuring factor that Egypt is conforming to international standards.

 

Dr. Maait added that the Index inclusion is considered a milestone regarding debt management reforms and the Ministry of Finance team has been working on this project for almost 3 years to fulfil the requirements of the Index Inclusion; such as and not limited to reshaping the yield curve, elongating the average time to maturity as well as increasing our issuance size per auction to in addition to streamlining the process of the taxation applying the double taxation treaties rates.

 

Ahmed Kouchouk, the Vice Minister of Finance, explained that we have been working diligently on our home-grown economic reform program that led to strong economic resilience and notable improvement in key macro fiscal indicators that also enabled us to meet the index inclusion requirements on the economic front. He added that in line with our Medium-Term Debt Strategy, the ministry of finance took many initiatives to develop the debt capital market to increase foreign investors’ participation and hence the demand which should support in lowering the cost of borrowing.

 

Nevine Mansour, the Adviser to the Vice Minister and the Project Manager, said that over 3 years our team at the Ministry of Finance was in continuous communication with the JP Morgan team to update and align them about all data and information related to the government debt market.

 

She explained that today Egypt is joining 4 indices in the JP Morgan list, namely:

1.The GBI-EM Global Diversified Index with a weight of 1.85%

2.The GBI-EM Broad Diversified Index with a weight of 1.47%

3.GBI-AGG Diversified Index with a weight of 0.24%

 

All based on 14 Egyptian bonds with a total value of USD 26 billion

And the 4th index is the JESG Index with a weight of 1.18% based on our green bond issuance in 2020, which is confirming Egypt’s strategy of sustainability.