Egypt eyes higher investor base, lower debt service bill

Egypt aims to bolster liquidity and alleviate the burden of debt service while diversifying financing instruments to attract a wider array of investors, including individuals, Egypt’s Finance Minister, Mohamed Maait, said, as per a cabinet report on Tuesday.

Central to the Minister’s strategy is the introduction of incentives for primary and secondary dealers, including the authorisation of non-competitive bids and joint financing operations in the primary market for local government securities.

This groundbreaking measure is anticipated to inject vitality into the secondary market, fostering smoother transactions and heightened market activity.

Furthermore, primary dealers in government debt instruments are set to receive preferential treatment, enabling them to submit bids in the primary issuance market and earn commissions on accepted quantities for their clients.

This initiative is geared towards broadening the investor base and bolstering investment in government debt instruments, particularly among individual investors, thereby enhancing market depth and resilience.

Moreover, to promote transparency and accountability, the Ministry of Finance will publish semi-annual reports on its website, showcasing the performance of primary dealers in both primary and secondary markets for local government securities.

By recognising top performers, this measure aims to bolster market confidence and incentivise excellence in the sector, underscoring Egypt’s commitment to fostering a vibrant and sustainable government securities market.

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