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JPMorgan to Review Egypt for Inclusion in GBI-EM

JPMorgan to Review Egypt for Inclusion in GBI-EM

Saturday, 10 April, 2021 - 07:30
The Egyptian government confirmed that the coming period will witness the launch of the second phase of the economic reform program. (Reuters)

JPMorgan said it had placed Egypt and Ukraine under review for inclusion in its widely tracked Government Bond Index Emerging Markets (GBI-EM) suite.


In the event of index inclusion, Egypt would have a weight of about 1.8% in GBI-EM Global Diversified, with 14 Egypt government bonds with a total notional value of $24 billion under review for eligibility, the bank said in a statement published on Thursday.


Ukraine’s weight could reach 0.12% in the GBI-EM Global Diversified if included, with one bond with a notional value of $1.5 billion under review for eligibility.


JPMorgan said it had placed the two countries on Index Watch Positive after steady improvement in liquidity and access to the onshore government bond markets for foreign investors.


The bank said it will provide an update on their possible inclusion in the next six months.


The GBI-EM series track local currency emerging market government bonds, with more than $250 billion in assets tracking the benchmark.


Indonesia, Mexico, Thailand and Brazil were all expected to see the largest declines in their weightings if Egypt and Ukraine were included in the GBI-EM Global Diversified, the bank said.


Minister of Planning and Economic Development Hala el-Saeed stressed on Friday that the coronavirus pandemic is a major challenge on the local and international levels.


The minister highlighted that the upcoming period would witness the launch of the second phase of the socio-economic national reforms program, which goes in line with Egypt Vision 2030.


The program aims to carry out radical reforms, she added.


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