Egypt’s World-Beating Bonds Poised for an Influx of Passive Cash

Egypt’s red-hot bond market has made it a favorite of emerging-market investors, and they’re counting on another year of big gains, Bloomberg News reported. JPMorgan Chase & Co. will add Egypt -- which has $26 billion of eligible government bonds -- to a group of indexes this month, setting the market up to receive an influx of cash from passive money managers. Investors have already been enticed by Egypt’s hefty interest rates, which rank as the highest in the world after adjusting for inflation. With global bond markets reeling from losses as the Federal Reserve turns hawkish, Egypt is looking like a bright spot for investors. Local bonds have returned 1.7% since December, making it one of only a handful of emerging markets that’s delivered a positive performance. PineBridge Investments and Renaissance Capital say they expect the strong performance to continue and predict double-digit gains in 2022 -- adding to last year’s 13% return, which was the second-best in the world and compared with an average loss of 1.2% for local emerging market debt. Read more.