LONDON, July 9 (Reuters) - Ethiopia’s dollar-denominated bonds rose to their highest in 10-weeks on Monday after the country’s new reformist Prime Minister Abiy Ahmed met with Eritrea’s Isaias Afwerki on Sunday, agreeing to re-establish ties between the two bitter regional enemies.

The 2024 issue added 0.583 cents to trade at $100.25 - its highest level since early May, according to Thomson Reuters data. The bond has gained nearly $3 since last Wednesday’s close.

The talks were the product of an unexpected peace initiative by Ethiopia’s Ahmed and could transform the Horn of Africa region, ending decades of animosity during which both countries remained isolated and dominated by their security forces.

“Because of the economic and political reforms, investors are looking to be a little bit overweight on the Ethiopia bonds,” said Jibran Qureishi, East Africa economist at Stanbic Bank in Nairobi. (Reporting by Karin Strohecker, additional reporting by Duncan Miriri in Nairobi, editing by Claire Milhench)