Citigroup turns bullish on Egypt’s dollar bonds for its strategic geopolitical position
Updated 10/29/2023 7:33:00 AM
Arab Finance: Citigroup Inc. has turned bullish on Egypt’s dollar bonds, saying that the country will access further financing, given its major geopolitical location, Bloomberg reported, citing a note by the bank.
The investment bank’s strategists recommend investors to purchase Egyptian bonds maturing in 2031 and 2050, in what they described as “a barbell strategy.”
“While geopolitical risks are likely to weigh on the region in the coming months, in our view Egypt’s geostrategic position may reinforce its bargaining power with its multilateral and Gulf Cooperation Council (GCC) creditors and catalyze increased new financing,” Citigroup’s strategists said.
“Egypt sovereign risk sentiment might be at an inflection point,” Nikola Apostolov and Luis Costa at Citigroup noted.
“We are seeing some positive momentum in the privatization process while official sector support might be ramped up given the geopolitical context,” they added.
The strategists pointed out that the government’s sales of assets are in the crease and that it appears to be on track to achieve the targets set by the International Monetary Fund (IMF).
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