LONDON- Egypt dollar bonds were under pressure on Wednesday as investors offloaded holdings in the secondary market to make space in their portfolios for a possible new bond sale.

The 2049 issue sank 0.9 cents to 105.3 cents in the dollar, its biggest daily fall since protests flared in late September, Refinitiv data showed. The 2047 issue was down 0.3 cents to reach 104.0 cents in the dollar, its lowest since mid-August.

"There's been some noise about a new dollar bond issuance coming out of Egypt soon and, given the heavy investor positioning, we might expect some selling as investors make space in their portfolios to purchase the new issue in the primary market," said Farouk Soussa, senior Middle East and North Africa economist with Goldman Sachs. "There are also some concerns about supply, particularly as Egypt normally issues later in the fiscal year."

Egypt intends to issue international bonds worth up to $7 billion in the 2019-2020 financial year, Finance Minister Mohamed Maait said last month. 

Goldman Sachs expected the government will stick to the $7 billion approved issuance programme, which is similar in size to last year's, said Soussa.

Investors might also be anxious about the risk of "fiscal slippage" if the authorities roll-back measures such as cuts in subsidies for fuel and other goods to try to alleviate citizens' worries in the wake of the protests, said Jason Tuvey, senior emerging markets economist at Capital Economics.

"There might be concern that if protests escalate then Egypt's debt ratio could be put on an upward path," said Tuvey.

(Reporting by Tom Arnold, editing by Karin Strohecker) ((Tom.Arnold@thomsonreuters.com; +442075428510; Reuters Messaging: tom.arnold.thomsonreuters.com@reuters.net))