On January 21, 2025, Egyptian sovereign dollar bonds rallied significantly, marking some of the largest gains in emerging markets.

This surge in Egypt's sovereign dollar bonds was fueled by positive sentiment surrounding Donald Trump's potential return as US president and a ceasefire between Israel and Hamas.

The ceasefire in Gaza, which began on January 19, 2025, has allowed for the return of hostages and the entry of humanitarian aid, signaling a possible end to over 15 months of conflict.

Contributing to this positive atmosphere, the Houthis in Yemen have paused their attacks on commercial ships in the Red Sea, which had previously disrupted shipping and significantly impacted Suez Canal revenues.

Fady Gendy from Arqaam Capital Ltd. highlighted that Egypt stands to gain from the favorable geopolitical climate, particularly with Trump's administration and reduced tensions in Red Sea trade.

President Abdel Fattah El-Sisi's mediation in the Gaza conflict has positioned Egypt as a key geopolitical player in the Middle East, enhancing its significance on the global stage.

Since March 2024, Egypt's bonds have attracted global investors, bolstered by substantial financial inflows from bilateral partners and the International Monetary Fund, alongside rising interest rates and a depreciated currency.

Investors have been particularly drawn to Egypt's local bonds, which offer some of the highest yields globally, supported by a policy interest rate of 27.25% and a significant decline in the value of the Egyptian pound.

On this day, Egypt's security bonds due in February 2048 rose for the sixth consecutive day, reaching their highest level since December 12, 2024, reflecting growing investor confidence.

As of January 19, 2025, Egypt's dollar-denominated bonds yielded a total return of 2.2%, with a notable reduction in its risk premium.

Notably, nine Egyptian bonds ranked among the top 20 performers in the Bloomberg EM Sovereign Total Return Index on January 21, 2025.