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Egypt CDS Update by jbchevrel, May 10, 2023
Only a member of CDX EM since series s37, Egypt’s [B3/B/B], Egypt is one of Arab World’s most indebted nations with international debt c$38B, long term [avg 11.5y] in $/€. Egypt has been in prolonged recession, as inflation decimated economic activity. Egypt had managed to build up reserves [c$40B] and 2018 discovery of gas fields was positive [2021, Egypt exported +$3.9b gas] but gas is insufficient, and 2021 deficit was -$33B, as imports [cereals] grew faster than exports. Demographics [population 50m -> 102m in 30yr] coupled with limited arable land have made Egypt #1 wheat importer. And c80% from Rus/Ukr, with bread programme serving 70m people. Before the Ukr/Rus war, Egypt was spending $3B/yr on wheat alone. Last Feb 8, Egypt was reported to sell stakes in 32 state-owned companies, from 18 sectors, over a year [incl. Banque du Caire, United Bank and army-linked Wataniya]. In March, Egypt CDS took off to mid-30s. Investors had flocked to Egypt $ bonds, hoping an IMF rescue package and/or a pledge of financial support from allied countries from the Gulf, and none of this looked imminent, coupled with higher hard-currency rates. Indeed, the IMF probably waits to see Egypt enact actual FX flexibility and privatization deals, before carrying out the first review of a $3B programme. In April, WaPo exposed a covert scheme by Egyptian President [in February] to provide Russia with up to 40k Sakr-45 rockets, useable on Russian launchers. Reports literally said that Egypt wanted to arm Russia ‘in secret’ to ‘avoid problems’ with the West. Note that Egypt had voted in the UN to *condemn* Russian move, contrary to many EM countries. This month, Egypt CDS widened further after Moody’s Investors Service placed them on review for downgrade, which reflects liquidity and debt affordability risks. MIS in February cut them to B3, lowest among major 3. Egypt government is feeling the pressure and reportedly revived plans to sell 10% more in state-run [80% state owned] Telecom Egypt through a share sale this month, indicative price a few % below spot. It is not obvious what IMF reaction time can be, but at 46% upfront in this context, Egypt CDS seems to have stopped widening, in the near term.
...dovranno privatizzare tutto piramidi e,canale Suez...e ,forse non bastano ...finchè a rimane quella testa di c.zo di Al Sisi.Comunque non hanno problemi ,la Cina attraverso la sua mano Turca in Africa è pronta.
Only a member of CDX EM since series s37, Egypt’s [B3/B/B], Egypt is one of Arab World’s most indebted nations with international debt c$38B, long term [avg 11.5y] in $/€. Egypt has been in prolonged recession, as inflation decimated economic activity. Egypt had managed to build up reserves [c$40B] and 2018 discovery of gas fields was positive [2021, Egypt exported +$3.9b gas] but gas is insufficient, and 2021 deficit was -$33B, as imports [cereals] grew faster than exports. Demographics [population 50m -> 102m in 30yr] coupled with limited arable land have made Egypt #1 wheat importer. And c80% from Rus/Ukr, with bread programme serving 70m people. Before the Ukr/Rus war, Egypt was spending $3B/yr on wheat alone. Last Feb 8, Egypt was reported to sell stakes in 32 state-owned companies, from 18 sectors, over a year [incl. Banque du Caire, United Bank and army-linked Wataniya]. In March, Egypt CDS took off to mid-30s. Investors had flocked to Egypt $ bonds, hoping an IMF rescue package and/or a pledge of financial support from allied countries from the Gulf, and none of this looked imminent, coupled with higher hard-currency rates. Indeed, the IMF probably waits to see Egypt enact actual FX flexibility and privatization deals, before carrying out the first review of a $3B programme. In April, WaPo exposed a covert scheme by Egyptian President [in February] to provide Russia with up to 40k Sakr-45 rockets, useable on Russian launchers. Reports literally said that Egypt wanted to arm Russia ‘in secret’ to ‘avoid problems’ with the West. Note that Egypt had voted in the UN to *condemn* Russian move, contrary to many EM countries. This month, Egypt CDS widened further after Moody’s Investors Service placed them on review for downgrade, which reflects liquidity and debt affordability risks. MIS in February cut them to B3, lowest among major 3. Egypt government is feeling the pressure and reportedly revived plans to sell 10% more in state-run [80% state owned] Telecom Egypt through a share sale this month, indicative price a few % below spot. It is not obvious what IMF reaction time can be, but at 46% upfront in this context, Egypt CDS seems to have stopped widening, in the near term.
...dovranno privatizzare tutto piramidi e,canale Suez...e ,forse non bastano ...finchè a rimane quella testa di c.zo di Al Sisi.Comunque non hanno problemi ,la Cina attraverso la sua mano Turca in Africa è pronta.
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