What’s worse than a recession? Entrenched inflation, influential banking body warns: The Bank for International Settlements — which performs banking services for central banks worldwide — has called for a “decisive” wave of global rate hikes from central banks to curb inflation in its flagship annual economic report (pdf) published yesterday. “The key for central banks is to act quickly and decisively before inflation becomes entrenched,” said Agustín Carstens, BIS general manager. The fear is that major economies could reach “a tipping point, beyond which an inflationary psychology spreads,” BIS warns, counseling that short-term pain in the form of a recession triggered by rate hikes would be preferable to that scenario.

Value stocks are holding up better than their growth siblings as global policy tightens: Value equities are currently outperforming growth equities with a 13% margin so far this year, which if maintained would mark their largest margin since 2001, the Wall Street Journal writes. “I’ve never been more excited about value,” one investor told the outlet.

But remember — all equities are down, value stocks just less so. The Russell 1000 Value index has dropped 12% so far this year, while the Russell 1000 Growth index saw a 25% drop.

Value vs. growth: Value stocks — companies with cheaper valuations and higher dividend payouts — tend to do well in higher interest rate environments as investors rotate out of the more expensive, dividend-less growth stocks. Why? Higher earnings and larger dividends are a better hedge against rising borrowing costs than growth companies, whose valuations are more reliant on future earnings and vulnerable to rising rates.

The Saudi bourse will launch Single Stock Futures (SSFs) contracts next week, marking the Tadawul’s second derivatives product following the launch of index futures, the bourse said in a disclosure. The move comes “as part of wider efforts to develop an advanced capital market in Saudi Arabia,” the disclosure read.

THE CLOSING BELL-

The EGX30 rose less than 0.1% at yesterday’s close on turnover of EGP 483 mn (41.4% below the 90-day average). Local investors were net buyers. The index is down 21.0% YTD.

In the green: Madinet Nasr Housing (+8.9%), Abu Dhabi Islamic Bank Egypt (+6.5%) and Heliopolis Housing (+2.7%).

In the red: GB Auto (-6.5%), MM Group (-5.2%) and e-Finance (-3.0%).

Asian markets are up in early trading this morning, with the exception of the Shanghai index, which was in the red as of dispatch time. Futures suggest most European indices will open in the green later on today, though Wall Street is faring less well, with the Dow Jones, Nasdaq, and the S&P 500 all threatening to open down.