Egypt is far from failure to meet its financial obligations, as the pessimism priced into the nation’s dollar bonds is overdone, Bloomberg reported on Wednesday citing Goldman Sachs Group Inc. and Pictet Asset Management.
Egypt’s dollar notes have declined 1.7 per cent in January, as Moody’s Investors Service cut the country’s credit outlook to negative from stable earlier this month. While Fitch and Standard & Poor’s credit rating for Egypt stand at B- with stable outlook.
The lower-rated countries would be able to return for the international debt markets, if the Federal Reserve start cutting interest rates this year, said Goldman’s head of global FX, Rates and EM Strategy Kamakshya Trivedi in an interview.
“That’s already beginning to play out in some of the frontier economies and the hard-currency bonds have shown quite good positive momentum,” Trivedi added. “There is probably quite a lot of upside in the distressed sovereign category,” and Egypt is a prime example.
