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Tuesday, 15 June 2021

US corporate debt now equals half of US GDP

Don’t look at the mountain of US corporate debt: Total corporate debt in the US has risen to USD 11.2 tn thanks to the pandemic, as rock-bottom interest rates and the Federal Reserve’s bond-buying programs allowed companies to borrow big to keep themselves afloat, the Wall Street Journal reports. Non-financials firms sold some USD 1.7 tn of bonds last year, pushing the amount of corporate debt to roughly half the size of the US economy.

Europe has started taking investor orders as it kicks off a five-year plan to sell USD 1 tn worth of debt to finance grants and loans to member states under a program dubbed NextGenerationEU, according to Bloomberg. The inaugural sale of 10-year bonds is expected to raise over USD 12 bn after the instruments are priced later today.

HSBC is forecasting robust demand in Dubai’s real estate market fueled by a growing appetite for large homes due to the pandemic, writing in a note that the pick-up in sales so far this year has been “remarkable,” Bloomberg reported. This mirrors a sentiment shared by Morgan Stanley last month, whose analysts predicted several years of growth.

Up

EGX30

9,933

+0.5% (YTD: -8.4%)

None

USD (CBE)

Buy 15.60

Sell 15.70

None

USD at CIB

Buy 15.60

Sell 15.70

None

Interest rates CBE

8.25% deposit

9.25% lending

Up

Tadawul

10,913

+0.2% (YTD: +25.6%)

Up

ADX

6,736

+0.5% (YTD: +33.5%)

Up

DFM

2,868

+0.9% (YTD: +15.1%)

Up

S&P 500

4,255

+0.2% (YTD: +13.3%)

Up

FTSE 100

7,146

+0.2% (YTD: +10.6%)

Up

Brent crude

USD 72.86

+0.2%

None

Natural gas (Nymex)

USD 3.35

-%

Up

Gold

USD 1,869.20

+0.2%

Up

BTC

USD 40,203

+3.25% (as of midnight)

The EGX30 rose 0.5% at yesterday’s close on turnover of EGP 1.05 bn (18.6% below the 90-day average). Foreign investors were net sellers. The index is down 8.4% YTD.

In the green: Fawry (+1.5%), CIB (+1.5%) and Eastern Company (+1.4%).

In the red: CI Capital (-3.8%), Qalaa Holdings (-3.2%) and Emaar Misr (-1.8%).

Asian stocks are down early this morning ahead of the Federal Reserve meeting later today, but futures suggest that US and European shares will open in the green.

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. © 2021 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of Commercial International Bank (tax ID: 204-891-949), the largest private-sector bank 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; and Act Financial (tax ID: 493-924-612), the leading activist investor in Egypt.