Back to the complete issue
Sunday, 14 February 2021

What the markets are doing on 14 February 2021

Even stonks that make it to the moon, must return to Earth: That’s the message from Muddy Waters’ Carson Block, who writes in the Financial Times that GameStop’s recent boom and bust should alert us to the fragility of the “stonk bubble” that lies before us. The dominance of passive investing and crazed speculation fueled by low interest rates has given us share prices that bear no relation to fundamentals, Block says, calling on policymakers to focus on deleveraging the market and address the market distortions before a passive fund-driven sell-off causes what he predicts could resemble a 1929-style market collapse.

Exhibit A: Investors poured a record USD 58 bn into global equity funds in the week (37.5% of it into US equities) to Wednesday, 10 February, the Financial Times reports, citing a report by the Bank of America (BofA) and fund-tracker EPFR Global data. Tech stocks snagged USD 5.4 bn during the week, driven by US equities and tech stocks, while bond funds attracted USD 10.6 bn. BofA’s gauge of market sentiment is approaching levels of extreme bullishness on the back of powerful stimulus measures across the world, low bond yields and optimism that global rollouts of covid-19 vaccines can lead to the revival of major economies.

None

EGX30

11,546

– (YTD: +6.5%)

Down

USD (CBE)

Buy 15.57

Sell 15.67

Down

USD at CIB

Buy 15.56

Sell 15.66

None

Interest rates CBE

8.25% deposit

9.25% lending

Up

Tadawul

8,944

+0.5% (YTD: +2.9%)

None

ADX

5,667

– (YTD: +12.3%)

Up

DFM

2,634

+0.1% (YTD: +5.7%)

Up

S&P 500

3,935

+0.5% (YTD: +4.8%)

Up

FTSE 100

6,590

+0.9% (YTD: +2.0%)

Up

Brent crude

USD 62.43

+2.1%

Up

Natural gas (Nymex)

USD 2.91

+1.5%

Down

Gold

USD 1,823.20

-0.2%

Down

BTC

USD 47,676.11

-0.1%

The EGX30 was flat on Thursday on turnover of EGP 1.56 bn (8.5% above the 90-day average). Local investors were net buyers. The index is up 6.46% YTD.

In the green: GB Auto (+3.4%), Palm Hills (+2.9%) and Ibn Sina (+1.0%).

In the red: Ezz Steel (-2.5%), MM Group (-1.4%) and ElSewedy Electric (-1.2%).

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.