{"id":679103,"date":"2025-12-29T00:00:00","date_gmt":"2025-12-29T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/?p=679103"},"modified":"2025-12-29T06:44:14","modified_gmt":"2025-12-29T06:44:14","slug":"demand-up-yields-down-for-our-first-local-debt-issuance-after-thursdays-rate-cut","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2025\/12\/29\/demand-up-yields-down-for-our-first-local-debt-issuance-after-thursdays-rate-cut\/","title":{"rendered":"Demand up, yields down for our first local debt issuance after Thursday\u2019s rate cut"},"content":{"rendered":"

Good morning, wonderful people. <\/strong>We hope at least a handful of you out there are enjoying a quiet week as we race toward New Year\u2019s Eve. We have for you this morning a packed issue \u2014 and some good news on investor sentiment with which to lead off: <\/p>\n

<\/a> Our first local debt issuance after Thursday\u2019s rate cut met with strong appetite<\/strong>, with the three- and nine-month EGP-denominated treasury bill issuance almost 4x oversubscribed, receiving EGP 220 bn worth of bids for the CBE\u2019s planned EGP 60 bn, according to central bank data<\/a>. Average yield fell to 24.99-25.46%, down from the 25.51-25.70% seen during last week\u2019s auction. <\/p>\n

Yields are down to multi-year lows: <\/strong>The average yield on the bills fell to lows not seen since mid-2023. <\/p>\n

The takeaway is clear:<\/strong> The post-cut repricing is already feeding through to primary auctions, with investors moving quickly to re-anchor expectations along the short end of the curve. The auction was a clear signal of market confidence after the Central Bank of Egypt cut interest rates for the fifth time this year. Investors are moving quickly to lock in yield in anticipation of the CBE continuing its rate-cutting cycle next year as inflation remains on a downward trajectory.<\/p>\n

It also gives us an idea of how today\u2019s EGP 5 bn three-year local sovereign sukuk <\/strong>issuance could play out<\/strong>, the fifth tranche under a wider EGP 200 bn program. <\/p>\n

ALSO <\/strong>HAPPENING TODAY-<\/strong> The central bank will auction off USD 800 mn worth of one-year USD-denominated treasury bills today, marking the sixth such issuance of the year, according to CBE data<\/a>. The treasuries will likely refinance USD 840 mn of t-bills due to mature tomorrow. <\/p>\n

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<\/a> AND- For those following the 2025 AFCON: <\/strong>The Pharaohs face Angola at 6pm at the Grand Stade d\u2019Agadir. While Egypt already secured its spot in the round of 16, Angola needs the victory to keep its Africa Cup of Nations hopes alive. The Pharaohs arrive unbeaten and with history on their side \u2014 having won both prior AFCON meetings.<\/p>\n

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Smart Policy <\/p>\n

<\/a> Are we about to get a single, accurate picture of Egypt\u2019s trade data? <\/strong>Policymakers are laying the groundwork to give investors and the world at large a single, unified set of import and export figures, according to a cabinet statement<\/a>.<\/p>\n

The move could put an end to the days when it was near-impossible to reconcile the <\/strong>differences in data<\/strong> published by a range of state entities. For years, anyone trying to model the economy has been forced to navigate a data schism: State statistics agency Capmas typically reports data based on physical flows (when goods physically cross a border), while the Central Bank of Egypt reports based on cashflow (when payments enter the banking system).<\/p>\n

The resulting discrepancies, which can reach bns of USD, have created serious <\/strong>confusion<\/strong> for asset managers, lenders, and international institutions like the IMF. This fragmentation often made it difficult to accurately assess Egypt\u2019s foreign currency requirements or its real-time trade balance. By moving to a unified database, cabinet will provide pundits and operators alike with a much clearer picture on where we stand at any given moment. <\/p>\n

Market watch<\/p>\n

<\/a> Egypt\u2019s first SPAC jumps on debut: <\/strong>Catalyst Partners Middle East (CPME) \u2014 Egypt\u2019s first blank check company or SPAC \u2014 closed up 20% to EGP 12 per share on its first day of trading on the EGX. Some 5 mn shares changed hands during the course of the day. This is three months after the company completed its acquisition of Qardy and Catalyst Partners<\/a> through share swaps. <\/p>\n

Dive deeper: <\/strong>Check out our conversation<\/a> with the Catalyst Partners Chairman Maged Shawky.<\/p>\n

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Watch this space <\/p>\n

Gafi, the state\u2019s investment promotion agency and regulator, is looking for <\/strong>private-sector investors <\/strong>interested in 12 operational or semi-operational industrial projects, according to data seen by EnterpriseAM. The opportunity book includes food processing, textiles, chemicals, and heavy industries and offers various investment structures, including management leases, strategic partnerships, or full acquisitions.<\/p>\n

The list: <\/strong>The portfolio includes three food units (including Fine Farm in Obour and a vegetable oil plant in Beni Suef), four textile factories (across Alexandria, Menofia, and Sharqia), two chemical plants (including one of Cairo Oils and Soap\u2019s entities), and heavy industry giants like El Nasr Steel Pipes\u2019 plant.<\/p>\n

Why would investors be interested? <\/strong>For some potential operators, brownfield investments offer faster time-to-market \u2014 the time and cost to rehabilitate existing infrastructure may be lower than for a greenfield. Infrastructure is also more likely to be in place and already connected to utilities, sidestepping long wait times. <\/p>\n

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Data point<\/p>\n

USD 7.2 bn \u2014 that\u2019s the a<\/strong>mount Egyptian household debt had risen by the end of <\/strong>September <\/strong>since the float of the EGP<\/strong>, up nearly 35%, according to data from the Institute of International Finance cited by Asharq Business<\/a>. Household debt stood at USD 28.2 bn at the end of the month, according to the count.<\/p>\n

Standard economic theory says high interest rates cool demand.<\/strong> But in Egypt, the opposite is happening, with high inflation forcing consumers to borrow just to stand still.<\/p>\n

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PSA-<\/p>\n

Looking to sort out some things at the bank this week? Make sure to get there before <\/strong>Thursday.<\/strong> Banks in Egypt will be taking Thursday off for New Year\u2019s Day, the central bank said in a circular.<\/p>\n

** We\u2019re off on Thursday, too<\/strong>, and will be back in your inboxes on Sunday, 3 January. <\/p>\n

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WEATHER- <\/strong>It\u2019s another cool day in the capital, with a high of 19\u00b0C and a low of 12\u00b0C, according to our favorite weather app. <\/p>\n

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The big story abroad<\/p>\n

With a holiday-shortened business week yet to begin in the west, the global business <\/strong>press <\/strong>is once again going long on geopolitics<\/strong>, offering deep dives into inconclusive talks yesterday between US President Donald Trump and Ukraine\u2019s Volodymyr Zelenskyy. Trump called the talks to end the war in Ukraine \u201cexcellent\u201d<\/strong> and said they had made \u201ca lot of progress.\u201d Zelensky was less enthusiastic.<\/p>\n

We\u2019ll see as the day wears on whether the Santa rally in equities continues\u2026 <\/strong>Asian markets opened mixed this morning. <\/p>\n

\u2026but commodities are doing well: <\/strong>Silver rallied to a record high north of USD 80 per ounce, gold edged higher, and Brent crude poked above USD 61. You can thank geopolitical tensions, a weaker USD, and Beijing making all the right noises about supporting domestic growth in 2026.<\/p>\n

With news sparse, there\u2019s lots of stocktaking about 2025 \u2014 and looking ahead to 2026<\/strong> and beyond \u2014 if you\u2019re in the mood:<\/p>\n