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Thursday, 24 December 2020

What the markets are doing on 24 December 2020

Bloomberg’s take on risk in MENA for investors: Investors in regional markets have their work cut out for them in 2021 as bond issuances, budget deficits and geopolitical complexities heighten risks over the coming 12 months, Bloomberg reports. With the pandemic still raging and oil prices slumping again, public finances in the region are expected to come under further pressure and the trajectory of the economic recovery uncertain. Add a new White House incumbent with a new foreign policy to the mix, and 2021 may turn out to be just as turbulent as 2020.

Egyptian stocks are looking increasingly appealing: Although Gulf equities are still considered a little pricey compared to other emerging markets, Egypt and Dubai are singled out as having more attractive valuations than their GCC counterparts based on their solid fiscal positions, Dubai-based head of equity strategy at Tellimer, Hasnain Malik tells Bloomberg.

Also from the EM-verse:

  • Good news/bad news on the debt front: The number of emerging- and frontier-countries with distressed debt has more than halved to only six from as many as 19 in March, but many are still struggling with growing debt piles and their fiscal positions remain uncertain, according to Bloomberg.
  • Ditto on remittances: Higher than expected remittances have helped cushion the blow of the pandemic in many EMs, but inflows remain under the threat of job losses in host countries, even as vaccines begin to be rolled out, writes’ Reuters Tom Arnold. Remittances into Egypt from migrant workers rebounded in the third quarter of 2020 after a 10% dip in 2Q2020.
  • But they still might be in better shape than the developed world: Surging infection rates in advanced economies and rising inflows into EM make the outlook for the asset class better than the developed world, JPMorgan’s managing director and head of Asia equity research James Sullivan tells Bloomberg (watch, runtime: 4:49).

Italy is 2021’s bond market darling: Bond traders plan to go all-in on long-dated Italian debt next year as investors search for investment-grade debt that actually pays a return, Bloomberg reported. In a world of negative interest rates, Italian bonds are one of the few investment-grade assets that investors don’t have to pay to hold, making them attractive despite the country’s uncertain economic, financial and political future.

Up

EGX30

10,678

+0.2% (YTD: -23.5%)

None

USD (CBE)

Buy 15.64

Sell 15.74

Up

USD at CIB

Buy 15.64

Sell 15.74

None

Interest rates CBE

8.25% deposit

9.25% lending

Up

Tadawul

8,721

+0.5% (YTD: +3.9%)

Up

ADX

5,142

+0.6% (YTD: +1.3%)

Up

DFM

2,512

+1.2% (YTD: -9.2%)

Up

S&P 500

3,690

+0.1% (YTD: +14.2%)

Up

FTSE 100

6,496

+0.7% (YTD: -13.9%)

Up

Brent crude

USD 51.14

+2.1%

Down

Natural gas (Nymex)

USD 2.61

-6.2%

Up

Gold

USD 1,867.90

+0.4%

Down

BTC

USD 23,280.71

-0.7%

The EGX30 rose 0.2% yesterday on turnover of EGP 1.1 bn (19.2% above the 90-day average). Regional investors were net sellers. The index is down 23.5% YTD.

In the green: Ezz Steel (+4.4%), Egyptian Iron & Steel (+2.9%) and Beltone Financial Holding (+2.6%).

In the red: Egypt Kuwait Holding (-1.3%), TMG Holding (-1.2%) and Ibnsina Pharma (-1.2%).

Asian markets are all in the green this morning with the exception of Shanghai, which is down slightly. Futures suggest that short trading days on Wall Street and in London will open in the green.

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