gypt officially returned to the JPMorgan index, Monday, Jan. 31, nearly 10 years after its exit from it in June 2011.
Mohamed Maait, Minister of Finance, said that Egypt is one of two countries in the Middle East and Africa within the J.P. Morgan Emerging Market Bond Index (EMBI).
After 2.5 years of Egypt’s pursuit of rejoining the “JP Morgan” index by fulfilling the bank’s requirements; which included extending the life of government debt, adjusting the yield curve, and raising the participation rate of foreign investors in government financial instruments with Increase the size of each version, JPMorgan Chase & Co. announced during October 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.
JPMorgan confirmed that about 14 categories of government bonds denominated in Egyptian pounds, with a total value of $26 billion, are eligible for the benchmark index, with an average return of 14.9 percent for those bonds with duration between 9 months and two years.
The bank’s analysts indicated in April that Egypt’s local currency bond market would benefit with returns ranging between $1.4 billion and $2.2 billion if Egyptian bonds joined the index.
The index team at JPMorgan put Egypt on positive monitoring of the index in April, after a steady improvement in liquidity and investor access to local government bond markets.
Minister of Finance Mohamed Maait commented that Egypt’s accession to J.P. Morgan government bond index for emerging markets, as of the end of next January, is a new certificate of confidence from foreign investors in the solidity of the Egyptian economy.
Maait indicated that this certificate confirms that 90 percent of the foreign investors who were surveyed supported Egypt’s entry into the “J.P Morgan”; to become one of only two countries in the Middle East and Africa in this index.
The minister pointed out that Egypt is expected to access the index with 14 bond issuances with a total value of about $24 billion, with a share of 1.85 percent in the index.
