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Monday, 30 November 2020

What the markets are doing on 30 November 2020

The EGX30 rose 0.3% yesterday on turnover of EGP 1.2 bn (7% above the 90-day average) as foreign investors were net sellers. The index is down 21.2% YTD.

In the green: Qalaa Holdings (+3.1%), Orascom Investment Holding (+2.7%) and Ezz Steel (+2.7%).

In the red: Juhayna (-1.9%), Telecom Egypt (-1.4%) and SODIC (-1.1%).

Asian markets are marginally in the green in early trading this morning while futures in the US, UK and Germany suggest the markets could open in the red later today as traders book gains after an awesome November.

Up

EGX30

11,009

+0.3% (YTD: -21.2%)

None

USD (CBE)

Buy 15.60

Sell 15.70

None

USD at CIB

Buy 15.61

Sell 15.71

None

Interest rates CBE

8.25% deposit

9.25% lending

Up

Tadawul

8,708

+0.17% (YTD: 3.81%)

Up

ADX

4,985

+0.28% (YTD: -1.77%)

Down

DFM

2,399

-0.83% (YTD: -13.20%)

Up

S&P 500

3,638

+0.24% (YTD: +12.62%)

Up

FTSE 100

6,367

+0.07% (YTD: -15.58%)

Up

Brent crude

USD 48.18

+0.80%

Down

Natural gas (Nymex)

USD 2.84

-3.99%

Down

Gold

USD 1,788.10

-1.28%

Up

BTC

USD 18,075.80

+2.57%

GLOBAL M&A- Salesforce is in talks to acquire workplace app Slack in what could be one of the industry’s biggest-ever acquisitions, Reuters reports, citing sources close to the matter. This comes as Slack Technologies — currently valued at USD 21 bn — has been struggling to capitalize amid fierce competition from Microsoft Teams. An agreement could be announced as soon as the coming week, says CNBC.

MOVES- Saudi Telecom CEO Nasser Al Nasser has resigned from the region’s largest telecom operator after two years in the role, Bloomberg reports. This comes as STC and Vodafone Group continue negotiations over STC’s potential purchase of a 55% stake in Vodafone Egypt, but it is unclear whether Al Nasser’s resignation will have any effect on the pace of the talks. Reports have suggested that the STC wants to break the deadlock over the valuation of the company and have a final agreement by the end of the year.

Bond investors are piling into corporate junk debt in what the Financial Times attributes to optimism that the companies hardest hit by the pandemic can avoid insolvency. Prices of bonds issued by CCC-rated US companies have accelerated at their quickest pace in more than four years this month while European junk bond yields have fallen from 8% in March to almost 3%.

One caveat: While we can’t deny that recent vaccine news and the Biden victory have definitely stoked bullish sentiment, there does seem to be a giant quantitative easing-shaped hole in the FT’s analysis here, which ignores the tns of USD in liquidity sloshing around the financial system that has incentivized investors to take on absurd levels of risk given the global economic crisis.

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