Egypt trims treasury bond auction as investors fret
Egypt trimmed the size of a treasury bond auction on Monday but its borrowing costs held broadly steady despite anxiety over the country's finances and a mass protest set for June 30.
Opposition parties and activists have called for a demonstration to mark the one-year anniversary of the election of President Mohamed Mursi, a Muslim Brotherhood leader whose rule has led to deepening political divisions.
The central bank said it sold 600 million Egyptian pounds ($86 million) of 5-year bonds at an average yield of 15.71 percent, down from 15.727 percent at the last auction on May 27. It had originally asked for 1 billion pounds.
It also sold 500 million pounds - the amount planned - of 10-year bonds at an average yield of 16.92 percent, up from 16.906 percent at the last auction on May 7.
One fixed-income trader said there appeared to have been substantial buying by state banks at the auction.
"These yields don't reflect the critical economic situation we are in or the potential for large scale unrest in a couple of weeks," the trader said.
Egypt's benchmark share index fell to its lowest close since July 29, its seventh day of declines as investors flee the market on concern over the country's political and economic plight.
Egypt's budget deficit, running at about 12 percent of gross domestic product, widened substantially in the first four months of the year, economists say.
- Big data: the world's next big natural resource?
- Will Hezbollah sanctions have an effect Lebanon’s banking sector?
- Why Saudi's latest announcement to open up the stock market to foreign investors is a good move
- Saudi expected to emerge as seventh largest capital market and it's a very big deal!
- Time for some serious contemplation: Middle East firms face $91bn refinancing needs