In a large bowl, combine the coconut, sugar, margarine, raisins, cherries, salt, and flour. Mix to combine.
In a measuring cup, mix the yeast with the warm water. Add to the flour mixture, along with the egg. The dough should be sticky.
Leave the dough in the mixing bowel and let it rest, loosely covered with plastic wrap or a kitchen towel for 1 hour, or until doubled in size.
Preheat oven to 350 degrees F.
Divide dough into 2 pieces. Gently knead each piece on a generously floured board and place in 2 buttered loaf pans. Let the dough rest until it doubles in size, once more. Bake until golden in color, about 50 minutes.
Remove from the oven and place on a cooling rack. Mix sugar and water and brush over hot sweetbread. Leave to cool.