Egypt issues $4 bln in foreign currency bonds

The ministry said they issued five, ten and thirty year bonds. (AFP)
Updated 20 February 2019
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Egypt issues $4 bln in foreign currency bonds

  • Ministry says the profits will be added to state budget

CAIRO: Egypt has issued $4 billion in dollar denominated bonds with maturities of five, 10 and 30 years in a sale that was five times oversubscribed, the Finance Ministry said on Wednesday.

The issue included $750 million in five-year bonds with a return of 6.2 percent, $1.75 billion in 10-year bonds with a return of 7.6 percent and 1.5 billion in 30-year bonds, with a return of 8.7 percent, the ministry said.

The issue attracted $21.5 billion in bids, the ministry said. The money raised will be used to finance the state budget, said Deputy Finance Minister Ahmed Kouchouk.

Most bids were for longer maturity 10- and 30-year bonds, Kouchouk told Reuters, adding that he considered the yield on the bonds “very good” for Egypt, in line or lower than prevailing yields.

Finance Minister Mohamed Maait said Egypt will return to the international bond market before the end of the fiscal year in June to issue bonds in a currency other than the dollar.

Egypt struggled through years of political and economic turmoil after its 2011 uprising. It has borrowed heavily from abroad since it began an economic reform program backed by the International Monetary Fund (IMF) in late 2016.

Allen Sandeep, head of research at Naeem Brokerage, estimated that as much as $13 billion in Egypt’s principal commitments for the 2019 calendar year are likely to be rolled over. The newly sold $4 billion in dollar-denominated bonds along with another $2-3 billion in non-dollar foreign currencies planned over the coming few months should be enough to cover the rest, he said.

“This year, total external debt dues amount to about $17 billion, is what we hear,” Sandeep said. “For the rest, the issuance would provide a good cushion, making sure the reserve base remains stable, at the least.”


Bahrain to use Huawei in 5G rollout despite US warnings

Updated 26 March 2019
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Bahrain to use Huawei in 5G rollout despite US warnings

  • Washington has warned countries against using Chinese technology
  • ‘We have no concern at this stage as long as this technology is meeting our standards’

DUBAI: Bahrain plans to roll out a commercial 5G mobile network by June, partly using Huawei technology despite the United States’ concerns the Chinese telecom giant’s equipment could be used for spying.
Washington has warned countries against using Chinese technology, saying Huawei could be used by Beijing to spy on the West. China and Huawei have strongly rejected the allegations.
VIVA Bahrain, a subsidiary of Saudi Arabian state-controlled telecoms firm STC, last month signed an agreement to use Huawei products in its 5G network, one of several Gulf telecoms companies working with the Chinese company.
“We have no concern at this stage as long as this technology is meeting our standards,” Bahrain’s Telecommunications Minister Kamal bin Ahmed Mohammed told Reuters on Tuesday when asked about US concerns over Huawei technology.
A senior State Department official said the US routinely urges allies and partners to consider the risks posed by vendors subject to extrajudicial or unchecked compulsion by foreign states.
The US Fifth Fleet uses its base in Bahrain, a Western-allied island state off the Saudi coast, to patrol several important shipping lanes, including near Iran.
Bahrain expects to be one of the first countries to make 5G available nationwide, Mohammed said, although he cautioned it would depend on handset and equipment availability.
Early movers like the United States, China, Japan and South Korea are just starting to roll out their 5G networks, but other regions, such as Europe, are still years away and the first 5G phones are only likely to be released in the second half of this year.
Bahrain’s state-controlled operator Batelco is working with Sweden’s Ericsson on its 5G network, while the country’s third telecoms group Zain Bahrain is yet to announce a technology provider.
No foreign company is restricted by the government from providing equipment for Bahrain’s 5G network, Mohammed said, adding mobile operators choose who they work with.
Australia and New Zealand have stopped operators using Huawei equipment in their networks but the European Union is expected to ignore US calls to ban the Chinese company, instead urging countries to share more data to tackle cybersecurity risks related to 5G networks.
Mohammed said the rollout of the 5G network was an “important milestone” for Bahrain, which is hoping investments in technology will help spur its economy, which was hit hard by a recent drop in oil prices.
“It is something we are proud to have,” he said.