World Bank hopes to keep Egypt aid
(MENAFN- Khaleej Times) The World bank hopes to continue its programmes in Egypt following the military ousting of the country's first democratically-elected leader, bank president Jim Yong Kim told reporters during a visit to Chile.
The bank, which Kim said has a $4.7 billion loan programme for Egypt, is still trying to understand the situation in the country, he added.
"Our hope is that we'll be able to continue with our programmes to provide essential services and essential support," said Kim, flanked by Chile's president and finance minister.
"We really urge everyone to stay calm and to have a dialogue, and to move as quickly as possible to having real elections," he added.The head of Egypt's Constitutional Court, Adli Mansour, was sworn in as interim president on Thursday, a day after the army ousted President Mohamed Mursi.
Speaking at the Constitutional Court in Cairo, Mansour said he planned to hold new elections, but did not specify when.
"We're in the middle right now of trying to understand just what did happen and what the legal status is of the government that's in place," Kim said.
Stock euphoria spurs selling
Meanwhile, Egypt's biggest stock market rally in more than a year had foreign investors selling holdings on concern the military-backed political transition will delay the nation's economic recovery.
While local buying sent the benchmark EGX 30 Index soaring 7.3 per cent on Thursday, non-Arab foreign investors were net sellers of about E£103 million ($15 million) of shares, the most since March 28, according to data compiled by Bloomberg.
Mansour inherits the worst economic slump in two decades and the biggest budget deficit relative to economic output in the Middle East. Egypt's bid for a $4.8 billion International Monetary Fund loan has yet to be accepted, leaving the country reliant on foreign aid.
"Egypt's economic fundamentals remain unchanged, so the market gave foreign investors the chance to sell into the rally," Ahmad Alanani, Dubai-based director for the Middle East at Exotix, said by phone. "The political picture today is more polarised than ever before."
A rally in Egypt's $1 billion of Eurobonds due 2020 sent yields plunging 149 basis points, or 1.49 percentage points, on Thursday to 9.28 per cent.
That was the biggest drop since the notes started trading in April 2010.
Five-year credit-default swaps protecting investors against non-payment of Egyptian government debt tumbled 113 basis points to 787, according to CMA prices. The contracts are still among the 10 most expensive globally.
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