Revealed serious report issued by the “Bank of America – Merrill Lynch” Egypt is among the five most dangerous countries in the world with respect to the prospects of stumbling in repay its sovereign debt, which means it is poised for further reduction in its credit rating, and the more investors and their money a candidate to escape from Egypt over the next short period of time.
According to the report” It calculates the default costs in the payment of sovereign debt, the cost will be on Egypt prohibitive if they occur, as the report points out that it adopted in Ranked on three factors, the first being the debtor himself, which is here the Egyptian government, the second situation and financial circumstances of the debtor, and the third element in the classification is Over the ability to replace another sovereign debt, including government keeps (Debtor) Able to defer payment for longer periods in accordance with the “Arab 21” It is intended indebted sovereign bonds or instruments issued by the government in any country, and the creditors understand the holders of these bonds, and bond refers to the value of the debt, which is the duty of Merit at a certain date, and it must exporting government bonds that the benefits paid to creditors.
Under the negative expectations of the Egyptian sovereign debt, the insurance value on these bonds rises, the amounts paid by the creditors in order to protect them from tripping, and insurance rates vary according to the degree of risk bonds as the US bond -aly example- Which is considered the least dangerous in the world and the corresponding low insurance rates.
And high insurance rates on the Egyptian bond investment becomes less vain, even though the Egyptian government did not stumble already in debt, which would mean in the end that investors will continue to escape from Egypt and that the capital will continue to escape from Egypt, including exacerbate the economic problems during the period next.
Analysts and traders said that the Egyptian Stock Exchange inter sharp losses suffered by the stock market prompted a large number of institutions and funds to escape from the stock market and look for other alternative markets. They pointed out that the political crisis in the country is the main reason for these losses, and that the failure of the Egyptian government intervention to discuss the problems and crises investors caused the aggravation of the crisis and the payment of funds and enterprise managers to try out the Egyptian stock exchange and invest in a more transparent and balanced and stable other markets
the source : Agencies