Egyptian CDS surge to 3-year high ahead of election

Egyptian debt insurance costs surged 28 basis points on Friday to their highest in more than three years ahead of an election that looks certain to plunge the country’s political transition into fresh turmoil.

Data from Markit showed Egyptian five-year credit default swaps rising to 650 basis points, the highest since March 2009.

Egypt’s supreme court dissolved parliament on Thursday in a shock ruling that kept Ahmed Shafiq, former leader Hosni Mubarak’s last premier, in the weekend presidential race, effectively dashing hopes for a peaceful democratic transition.

The opposition Muslim Brotherhood which dominated Egypt’s first freely elected parliament, has dubbed the ruling a “coup” and is urging protests on Friday.

The military has ruled Egypt for 16 months since Mubarak was toppled.
Egypt’s currency, the pound, fell to three-week lows against the dollar on Thursday. Cairo markets are shut on Friday.