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Monday, 1 March 2021

What the markets are doing on 1 March 2021

Time for OPEC+ to reverse production cuts? With global demand for oil surging and supply rapidly tightening, observers are urging the alliance of oil producing nations to start reversing some of the output cuts made last year at their meeting this Thursday, 4 March, Bloomberg reports. OPEC+ are holding back about 7% of the world’s supply, and will decide at their meeting whether to add 500k barrels to daily output in April, in addition to 1 mn barrels that Saudi Arabia could bring back online. The calls come as prices rise to pre-covid levels for the first time since the onset of the pandemic, prompting bullish projections with some suggesting that we could soon see the return of USD 100 oil if supply continues to shrink.

China’s economy expanded at a slower pace in February, with manufacturing activity dropping to a nine-month low after the week-long Lunar New Year holidays upended factory output, Bloomberg reports. The services sector was also disrupted due to covid travel restrictions, though consumer spending at big retailers and restaurants in main cities was higher than a year ago.

A slight boost in airline stocks last month is giving analysts cause for optimism, though smaller budget airlines are more likely than large long haul carriers to quickly recover once tourism picks up following the global rollout of covid vaccines, Bloomberg says. Airline stocks rose 15% in February as investors anticipate a rise in holiday travel during the summer as travel restrictions are tapered. Analysts remain cautious though: Stock levels remain 17% short of their pre-covid 2020 highs, while average earnings for airlines have flatlined since last May, indicating a proper recovery is still a ways away.

Down

EGX30

11,525

-0.8% (YTD: +6.27%)

Up

USD (CBE)

Buy 15.66

Sell 15.76

None

USD at CIB

Buy 15.65

Sell 15.75

None

Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

9,145

-0.5% (YTD: +5.2%)

Up

ADX

5,664

+0.6% (YTD: +12.3%)

Up

DFM

2,552

+1.0% (YTD: +2.4%)

Down

S&P 500

3,811

-0.5% (YTD: +1.5%)

Down

FTSE 100

6,483

-2.5% (YTD: +0.4%)

Up

Brent crude

USD 65.69

+2.0%

Up

Natural gas (Nymex)

USD 2.80

+1.0%

Up

Gold

USD 1,743.80

+0.9%

Up

BTC

USD 46,539.52

+0.4%

The EGX30 fell 0.8% yesterday on turnover of EGP 1.59 bn (8.5% above the 90-day average). Foreign investors were net sellers. The index is up 6.27% YTD.

In the green: Orascom Investment Holding (+7.3%), Ibn Sina Pharma (+3.7%) and Oriental Weavers (+3.4%).

In the red: MM Group (-5.3%), Sidi Kerir Petrochem (-3.9%) and Alexandria Minerals Oil Company (-3.5%).

Asian markets are solidly in the green in early trading this morning and futures suggest US markets will follow suit when they open this morning, while Canadian and Brazilian markets look like they will open in the red.

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