What the markets are doing on 5 January 2021
A global green bond boom may be coming in 2021: Governments and companies could issue up to USD 500 bn in green bonds this year — nearly half the total raised by the climate-friendly securities since their inception — as policymakers prioritize a green-led recovery from the pandemic, Swedish bank SEB says, according to the Financial Times. HSBC estimates a more modest USD 310-360 bn in total 2021 green bond issuance.
The EU plans to launch EUR 225 bn worth of green bonds, as part of its covid-19 recovery plan. But analysts say that the US market, which lags an estimated USD 326 bn behind Europe, may see particular growth this year. The current shortage of green bonds may have created a so-called “greenium,” with higher costs for investors and lower borrowing costs for issuers.
This could be good news for Egypt, which closed the region’s first ever issuance of sovereign green bonds in September, selling USD 750 mn of bonds to investors before listing them on the London Stock Exchange. Investors gobbled up the five-year securities, submitting USD 3.7 bn in bids and accepting a payout 50 bps lower than the initial 5.75% yield. The green bonds were 5x oversubscribed, showing substantial investor appetite.
Also worth knowing:
- In late-breaking news, the NYSE looks like it is backtracking on the delisting of three big Chinese telecoms companies.
- Oil prices are again approaching the USD 50 / bbl mark as OPEC+ met yesterday to decide on February production levels, Bloomberg reports. Possibly driving the price rise: A weakened USD boosting demand for USD commodities, along with nervousness over reported US-Iran tensions.
- The Fiat Chrysler-PSA merger has been greenlit by PSA shareholders, bringing them one step closer to creating the world’s fourth largest automaker: A new company called Stellantis, Reuters reports.
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EGX30 |
10,814 |
-0.3% (YTD: -0.3%) |
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USD (CBE) |
Buy 15.67 |
Sell 15.77 |
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USD at CIB |
Buy 15.66 |
Sell 15.76 |
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Interest rates CBE |
8.25% deposit |
9.25% lending |
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Tadawul |
8,667 |
+0.6% (YTD: -0.3%) |
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ADX |
5,115 |
+0.7% (YTD: +1.4%) |
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DFM |
2,579 |
+2.9% (YTD: +3.5%) |
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S&P 500 |
3,700 |
-1.5% (YTD: -1.5%) |
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FTSE 100 |
6,571 |
+1.7% (YTD: +1.7%) |
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Brent crude |
USD 50.69 |
-2.1% |
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Natural gas (Nymex) |
USD 2.60 |
+2.4% |
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Gold |
USD 1,946.70 |
+2.7% |
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BTC |
USD 31,032 |
-6.3% |
The EGX30 fell 0.3% yesterday on turnover of EGP 1.2 bn (10% below the 90-day average). Foreign investors were net buyers. The index is down 0.3% YTD.
In the green: Madinet Nasr Housing (+2.6%), Cleopatra Hospital (+2.2%) and Juhayna (+2.0%).
In the red: Orascom Development (-2.7%), Dice (-1.7%) and Pioneers (-1.7%).