Egypt Seeks $2.6 Billion in Biggest Bill Sale as Yields Forecast to Climb - Bloomberg

Egypt will try to raise as much as 15 billion Egyptian pounds ($2.6 billion) in a record sale of Treasury bills with bankers predicting yields will rise as foreign investors avoid the auction.

Yields on three-month local-currency bills may rise between 40 basis points and 100 basis points at today’s Finance Ministry auction, according to bankers from three of 15 primary dealers in Cairo. Ahmad Alanani, director of Middle East fixed-income sales at Dubai-based Exotix Ltd., said yields may climb as much as 350 basis points, or 3.5 percentage points, on all maturities and that local banks have enough funds to buy the bills.

A lack of international investor participation may further weaken the pound, which fell yesterday to the lowest level since January 2005, according to UBS AG. Foreigners hold about $9 billion of Egypt’s Treasury bills, equivalent to 20 percent of the total, London-based Barclays Capital said in a Jan. 18 note.