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Sunday, 13 December 2020

What the markets are doing on 13 December 2020

The EGX30 fell 0.3% on Thursday on turnover of EGP 1.4 bn (4% above the 90-day average). Foreign investors were net sellers. The index is down -21.3% YTD.

In the green: Eastern Company (+3.4%), Edita (+2.1%) and Credit Agricole (+1%).

In the red: Dice (-6.6%), Heliopolis Housing (-4.8%) and Juhayna (-3%).

Down

EGX30

10,987

-0.3% (YTD: -21.3%)

Up

USD (CBE)

Buy 15.65

Sell 15.75

Up

USD at CIB

Buy 15.66

Sell 15.76

None

Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

8,644

-0.2% (YTD: 3%)

Up

ADX

5,109

+0.6% (YTD: 0.6%)

Up

DFM

2,547

+0.3% (YTD: -7.9%)

Down

S&P 500

3,663

-0.1% (YTD: 13.4%)

Down

FTSE 100

6,547

-0.8% (YTD: -13.2%)

Down

Brent crude

USD 49.97

-0.6%

Up

Natural gas (Nymex)

USD 2.59

+1.5%

Up

Gold

USD 1,843.60

+0.3%

Up

BTC

USD 18,452

+3.6%

SIGN OF THE TIMES- Are investors finally seeing EMs as more than different shades of beige and giving China its due props? Some of the biggest asset managers appear to be shifting their strategies to give China the respect due to the second-largest economy in the world, according to Bloomberg. Amundi Asset Management (with AUM of USD 2 tn), and Robeco (with USD 190 bn AUM), are both rolling out new strategies focused on China amid a surge in demand from clients who had previously invested in the country through global developing-nation funds. Meanwhile, heavyweights such as BNY Mellon Investment Management and BlackRock are favoring splitting China off from EM, with the latter stating that they see China “as a distinct pole of global growth.”

Why now? China’s rapid recovery from the covid-19 pandemic and “increasingly domestic-driven growth model” have accentuated the differences between it and other emerging markets that came from its size, growth, and market depth. China’s economy is expected to expand 8.2% in 2021 after outpacing other EM, while Chinese equities have seen an increase of USD 10.4 bn this year compared to an outflow of USD 23.9 bn from other EM and FM funds. The widespread economic impact from the pandemic is also driving investors towards specific countries and away from regional funds.

Covid has certainly been good to Jumia: After receiving a boost from lockdown measures and short-sellers Citron eating humble pie, Jumia is now laying down the groundwork for the next phase of its growth, which the company hopes will finally get it to into the green, Jumia Co-CEO Sacha Poignonnec tells Bloomberg in an interview. The plan might see the company spin off key logistics and payments divisions operating in 11 African countries, including Egypt, in a bid to cut down on costs, Poignonnec said. Simultaneously, the company is looking to expand to Ethiopia. The plans come after covid-19 measures helped the Pan-African e-commerce giant reduce 3Q2020 operating losses 49% y-o-y, and boosted its stock price by over 500% YtD.

Hyundai has purchased 80% of US robotics group Boston Dynamics in a USD 1.1 bn transaction, the Financial Times reports. Japanese multinational SoftBank, which had bought Boston Dynamics for USD 100 mn in 2017, will retain 20% of the company through a subsidiary.

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