The Ministerial Economic Committee approved a proposal to issue Egyptian bonds on international markets to attract new capital to boost the country’s resources, according to a cabinet statement Monday.
The approval has also given the green light for the ability to receive fund from international financial markets.
The cabinet’s statement added that the decision follows an improvement of the international evaluation of Egypt’s economy, and the continuous decline in the United States’ interest rate. It has also been affected by the availability of international market liquidity, and other markets’ desire to invest in Egyptian stock. The increase in international liquidity and the decline in good investment opportunities globally have been a major factor in this change.
During the economic group’s weekly meeting, Minister of Finance Hany Kadry Dimian pointed to the increased economic growth rates, due to investments and consumption rates growth. He expressed his expectations for further improvement in the coming period, in line with the recovery in the political stability and implementation of major developmental projects.
Arabeya Online Brokerage Company Chairman Hisham Tawfik said the government’s plan to bolster economic conditions is promising and sends positive signs to the stock markets and local and international markets. He said this is especially after a thorough revision of economic legislations and resolving a great number of conflicts with investors.
He added that the government’s efforts to create economic reforms through restructuring subsidies and furthering the roadmap contributed to improving the country’s credit ranking. It is only normal to make use of the positive evaluation of the economy and to get international market liquidity to fund the current expansion plans in the mega developmental projects. Tawfik demanded that the government be cautious in order to avoid debt rate that exceeds income.
He added that Egypt’s improved credit ranking, which Fitch Ratings pushed to B grade, is attributed to the country’s economic and political efforts, including important governmental amendments. These include the lowering of the energy subsidy, amended and expanded tax laws, improved political stability, and completing the roadmap through parliamentary elections in March.
Dimian pointed to some structural procedures the government is undertaking, including lowering late dues for foreign oil companies in the research and discovery fields, revising investment laws, and resolving conflicts with foreign investors.