Citigroup: Egypt’s Geopolitical Position Could Catalyze New Financing in Coming Months

Citigroup, the international investment bank, has released a new research note expressing optimism about Egypt's bonds. The note indicates that Egypt's significant geopolitical situation may enable it to receive new financing in the near future. Citigroup recommends its investors to consider the purchase of Egyptian bonds maturing in 2031 and 2050, a strategy they refer to as a 'barbell strategy'. These findings align with the bank's perception that geopolitical risks are likely to have a considerable influence on the region in the coming months, nevertheless, Egypt's strategic location may reinforce its bargaining power with its multilateral and Gulf Cooperation Council creditors, thereby catalyzing increased financing. The note explains that Egypt's geopolitical location could be leveraged to gain further financing, marking a potential inflection point for Egypt's sovereign risk sentiment. The investment bank highlights that the consistent development of the government's asset sales appears to be on track for achieving the targets set by the International Monetary Fund, reminding that Egypt has recently sourced a $3 billion loan from the institution. Last but not least, the note draws attention to the fact that Egypt is in active dialogue to receive new funding from Gulf nations. Reports indicating this have stated that Egypt's Central Bank is on the verge of securing new deposits approximating $5 billion from Saudi Arabia and the UAE.