Back to the complete issue
Sunday, 9 May 2021

Planet Finance: Rising commodity prices are good news for EM

SUPERCYCLE WATCH- Copper prices are at all-time highs off of optimism over an economic rebound that has fueled talk of a commodities supercycle amid soaring raw material prices, Bloomberg reports. The surge in prices is raising the prospect of imminent inflation — despite some analysts suggesting it will be transitory — meaning big buyers such as China could move to stabilize prices. Copper is typically considered a proxy or indicator of where markets are heading.

Rising commodity prices are good news for emerging markets and will likely help currencies shake off pressure from rising US interest rates and a stronger USD, according to a Reuters poll of strategists. Almost two-thirds of the 40 people polled said that currencies belonging to commodity exporters will outperform than high / low-yielding EM currencies. "Given our generally bullish outlook on commodity [sic] for 2021, we expect commodity exporters to remain supported, in both EM and DM (developed markets), even in the face of a stronger [USD]," said FX analysts at Citigroup.

Investors hope the hype over Dogecoin will send other crypto assets to the moon: Investors are turning to lesser-known cryptocurrencies such as DigiByte, VeChain and SafeMoon in search of the next Dogecoin, as meme-fueled buying sprees cause crypto assets to skyrocket, reports the Wall Street Journal. The price of the once-obscure Dogecoin has surged more than 26,000% in the past six months to reach a market cap of USD 92 bn to become one of the world’s largest crypto assets.

Up

EGX30

10,588

+0.7% (YTD: -2.4%)

None

USD (CBE)

Buy 15.62

Sell 15.72

Down

USD at CIB

Buy 15.61

Sell 15.71

None

Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

10,228

-0.2% (YTD: +17.7%)

Up

ADX

6,152

+0.6% (YTD: +21.9%)

Up

DFM

2,664

+0.5% (YTD: +6.9%)

Up

S&P 500

4,233

+0.7% (YTD: +12.7%)

Up

FTSE 100

7,130

+0.8% (YTD: +10.4%)

Up

Brent crude

USD 68.28

+0.3%

Up

Natural gas (Nymex)

USD 2.96

+1.0%

Up

Gold

USD 1,813.30

+0.9%

Up

BTC

USD 59,198.50

+2.5%

The EGX30 rose 0.7% on Thursday on turnover of EGP 1.02 bn (18.8% below the 90-day average). Foreign investors were net sellers. The index is down 2.4% YTD.

In the green: Ezz Steel (+5.6%), AMOC (+3.7%) and Sidi Kerir (+3.2%).

In the red: Orascom Development (-2.8%), Orascom Financial (-2.3%) and Abu Qir Fertilizers (-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 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; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.