Back to the complete issue
Sunday, 21 February 2021

What the markets are doing on 21 February 2021

Climate change mitigation is the only factor that can drive the so-called commodities supercycle. This is the takeaway from an op-ed by CRU Chief Economist Jumana Saleheen for the Financial Times who casts doubt that the recent “panglossian” optimism over vaccines will bring us a new commodities boom, and warns those who are banking on huge new demand from China about Beijing’s its new dual circulation strategy, which will lessen its dependence on commodity imports.

Too early to call a supercycle? Huge demand for copper, nickel, lithium, cobalt and other materials necessary to produce low-carbon technology could be created, but only when policymakers act decisively. “Climate action is the only factor that has the potential to drive a multiyear commodity price rally. But a lot must be said and done before that materializes. It is too early to call a supercycle,” she writes.

Inflation is on the increase in the US and this isn’t great for emerging markets. The pickup has translated into higher treasury yields, meaning it could drive investors away from EMs and diminish the rally in EM asset classes as risky holdings become less attractive, according to Bloomberg. Investors are pricing in Biden’s USD 1.9 tn stimulus plan, driving the benchmark 10-year yields to their highest level in a year. This could also mean a quick repricing in EM bonds, said Sid Mathur, head of Asia Pacific research at BNP Paribas.

Down

EGX30

11,381

-0.3% (YTD: +4.9%)

Up

USD (CBE)

Buy 15.61

Sell 15.71

Up

USD at CIB

Buy 15.60

Sell 15.70

None

Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

9,024

-0.7% (YTD: +3.9%)

Up

ADX

5,643

+0.1% (YTD: +11.8%)

Down

DFM

2,576

-0.7% (YTD: +3.4%)

Down

S&P 500

3,907

-0.2% (YTD: +4.0%)

Up

FTSE 100

6,624

+0.1% (YTD: +2.5%)

Down

Brent crude

USD 62.91

-1.6%

Down

Natural gas (Nymex)

USD 3.07

-0.4%

Up

Gold

USD 1,777.40

+0.1%

Up

BTC

USD 56,579.03

+0.9%

The EGX30 fell 0.3% on Thursday on turnover of EGP 1.3 bn (9.8% below the 90-day average). Local investors were net buyers. The index is up 4.9% year-to-date.

In the green: Orascom Investment Holding (+4.3%), Abou Kir Fertilizers (+3.3%) and Sidi Kerir Petrochemicals (+3.2%).

In the red: Orascom Financial Holding (-6.2%), Palm Hills Development (-3.2%) and ElSewedy Electric (-2.7%).

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; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.