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Egypt on JP Morgan’s watch list to re-join EM gov’t market index

LONDON, (The Southern African Times) – Egypt has been put on JP Morgan’s watch list for its emerging-market government bond index, says Finance Minister Mohamed Maait. Egypt was delisted from the index in 2011.

The index is a benchmark for measuring the total return performance of international government and corporate bonds issued by EM countries that meet specific liquidity and structural requirements.

JP Morgan putting Egypt under review comes in preparation for Egypt’s joining the index within a maximum period of six months, wrote the ministry in a statement.

It is expected that Egypt will enter with 14 issues with a total value of about $24 billion, with their percentage in the index expected at 1.78 percent, the minister added.

Maait highlighted that Egypt is taking steady steps towards economic reforms, contributing to boosting international financial institutions and the foreign investment community’s confidence in the Egyptian financial market.

The minister also pointed out that the Ministry of Finance began to work towards re-joining the index around 18 months ago. They did this through extending the life of the government debt; adjusting the Yield curve; and raising the percentage of foreign investors’ participation in government financial instruments, with an increase in the size of each issue.

JP Morgan announced it had placed Egypt and Ukraine under review for inclusion in the EM index earlier this month. They stated that they had placed the two countries on Index Watch Positive after steady improvement in liquidity and access to the onshore government bond markets for foreign investors.

In their April 9 statement, AP Morgan added that Egypt would have a weight of about 1.8 percent in GBI-EM Global Diversified, with 14 Egypt government bonds with a total notional value of $24 billion under review for eligibility.

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