Egypt Offers EGP 3.5 Bln T-Bills Ahead Of Presidential Runoff

Central Bank of Egypt (CBE) will offer EGP 3.5 billion ($579 million) of treasury bills after unofficial results of the first round of the presidential election showed an Islamist and a Hosni Mubarak-aide in the lead.

CBE will seek bids for three- and nine-month notes valued at EGP 1 billion and EGP 2.5 billion, respectively. The average yield on nine-month securities has advanced at the last five auctions to 15.863 percent, the highest since February. The three-month yield was at 14.314 percent at the last sale on May 13

The Muslim Brotherhood’s Mohamed Morsi came in first, followed by Ahmed Shafiq, the former civil aviation minister- turned-premiere in Mubarak’s last days in office, unofficial results showed. Hamdeen Sabahi, who emphasized his pro- revolution stance during his campaign, was third and has vowed to contest the result because of alleged irregularities. Since no candidate appeared to have secured more than 50 % of the vote, a runoff round will be held next month between the top two.

The government’s borrowing costs surged by about 50 percent since the start of the uprising that ended Mubarak’s three decades of rule last year. Violence and political unrest forced foreign investors out of the market, and local banks to increase their government-debt holdings. Today’s sale is part of Ministry of Finance’s plan to raise 150 billion pounds this quarter, the last of the country’s fiscal year.

The yield on the Egypt’s 5.75 percent dollar bonds due in 2020 fell 10 basis points, or 0.1 of a percentage point, 6.74 percent on May 25. That’s the lowest level since April 5. The Egyptian pound was little changed at 6.0405 a dollar, Bloomberg reported.