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Thursday, 18 March 2021

What the markets are doing on 18 March 2021

SUPERCYCLE WATCH- Oil prices are unlikely to surge dramatically this year despite vaccines boosting demand, with plenty of global supplies to prevent any potential new supercycle and OPEC+ at the ready to quickly deploy backup supply, the International Energy Agency (IEA) said in a report. Brent staged a rally since the oil market crash at the onset of the pandemic, reaching close to USD 70 a barrel last week for the first time in over a year, thanks to major producers surprising traders by deciding to keep a lid on supply. Still, a shortfall isn’t a likely scenario as inventories are at historically high levels, and have held up well despite the “steady decline,” the IEA said. OPEC+, the 23-nation coalition of oil producers led by Saudi Arabia and Russia, also have 9.3 mn barrels-per-day of spare capacity at hand as a result of the pandemic-induced cuts, and could use it to keep the market supplied, it added.

Oil erased its gains yesterday following the IEA report, with New York futures dropping 0.3% earlier today after having gained 0.8%, Bloomberg reported.

Mixed messages on a fresh boost of IMF funding for emerging economies: G7 countries have not yet agreed to proposals to boost the IMF’s firepower to provide more pandemic relief to the developing world, Reuters quoted unnamed sources as saying, a few hours after Japan’s Kyodo news agency reported that they had agreed to increase its reserves of Special Drawing Rights (SDRs) by USD 650 bn. This would be higher than the USD 500 bn proposed by the IMF. The seven countries are expected to sign off on the agreement Friday.

What are SDRs, and why do they matter for EMs post-pandemic? We had more on this in our PM edition earlier this week.

Putting the 2021 SPAC craze into perspective: The value of IPOs by special purpose acquisition companies in the first three months of 2021 has exceeded the USD 83.4 bn raised by SPACs in all of 2020, as well as the USD 29.5 bn generated by traditional IPOs, Reuters reports. Blank check companies are becoming an increasingly popular alternative to normal IPOs due to more lax regulations, and everyone from the US’ Build Acquisition Corp — whose USD 200 mn IPO pushed 2021 SPACs above their 2020 levels — to our very own Nassef Sawiris seems to be riding this investment trend.

But what’s a SPAC, you ask? We’ve got you covered with this explainer.

Down

EGX30

11,068

-1.1% (YTD: +2.1%)

None

USD (CBE)

Buy 15.66

Sell 15.76

None

USD at CIB

Buy 15.66

Sell 15.76

None

Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

9,602

-0.6% (YTD: +10.5%)

Down

ADX

5,746

-0.1% (YTD: +13.9%)

Down

DFM

2,601

-0.8% (YTD: +4.4%)

Up

S&P 500

3,974

+0.3% (YTD: +5.8%)

Down

FTSE 100

6,763

-0.6% (YTD: +4.7%)

Down

Brent crude

USD 64.27

-0.51%

Down

Natural gas (Nymex)

USD 2.51

-0.8%

Up

Gold

USD 1,750.30

+1.3%

Up

BTC

USD 59,127.69

+5.5%

The EGX30 fell 1.1% yesterday on turnover of EGP 997 mn (32.6% below the 90-day average). Local investors were net sellers. The index is up 2.1% YTD.

In the green: Orascom Investment (+2.7%), Palm Hills Development (+1.9%) and Sidi Kerir (+1.6%).

In the red: CI Capital (-9.6%), Cleopatra (-3.0%) and Fawry (-3.0%).

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.

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