Back to the complete issue
Tuesday, 6 July 2021

Emerging-market equities poised for a strong 12 months?

Emerging-market equities could gain 15% in the next 12 months, Sean Taylor, chief investment officer for Asia Pacific and head of EM equities at DWS Group, tells Bloomberg (watch, runtime: 4:27). Globally, equities have had a strong run during the first half of 2021, but major EMs including China and the rest of Asia have underperformed, making room for an upside, he says. The EM index, however, is “skewed” toward China, which hasn’t been performing as well as others so far into the year, giving investors reason to be picky.

Speaking of which, what actually makes EM investment worth it? Strong economic growth that could surpass growth rates in the developed world over the coming years, as well as portfolio diversification, provide the positive case for investing in EM, according to the Wall Street Journal.

Yes, but: High volatility, weak currencies, and high debt levels are all factors that make some investors think twice.

Also from EM-verse: Ghana wants to sell green and social bonds worth up to USD 2 bn in November, the country’s finance minister Ken Ofori-Atta told Bloomberg. The West African nation — which is looking to borrow some USD 5 bn from international debt markets before the year is out — plans to use proceeds from the social and green bonds sale to refinance debt it had taken out for national education and health projects.

The sale would be more than double the size of Egypt’s USD 750 mn inaugural green bond issuance last year, and would position Ghana as a leader in sustainable bonds in Africa.

China is intensifying its cybersecurity crackdown on tech companies: Chinese regulators have opened cybersecurity investigations into three more US-listed Chinese tech companies for what it fears could pose national data security risks, the Cyberspace Administration of China (CAC) said, according to CNBC. The firms under review — two subsidiaries of Chinese transport company Full Truck Alliance and recruitment platform Boss Zhipin — were barred from registering new users.

This comes after US listed Chinese ride-hailing app Didi, which made its debut on the New York Stock Exchange a week ago, was removed from app stores in China following a cybersecurity probe by the Chinese government.

US tech giants are threatening to leave Hong Kong: Facebook, Twitter, and Alphabet have warned the Hong Kong government that they could pack their bags if it follows through on plans to change data protection law, the Wall Street Journal reports. The proposals would hold the companies liable for doxing, potentially leading to criminal charges being filed when their platforms are used to maliciously share personal data.

None

EGX30

10,348

-% (YTD: -4.6%)

None

USD (CBE)

Buy 15.63

Sell 15.73

None

USD at CIB

Buy 15.63

Sell 15.73

None

Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

11,001

-0.3% (YTD: +26.6%)

Up

ADX

6,995

+0.7% (YTD: +38.7%)

None

DFM

2,803

-% (YTD: +12.5%)

Up

S&P 500

4,352

+0.8% (YTD: +15.9%)

Up

FTSE 100

7,164

+0.6% (YTD: +10.9%)

Up

Brent crude

USD 77.16

+1.3%

Up

Natural gas (Nymex)

USD 3.78

+2.0%

Up

Gold

USD 1,792.00

+0.5%

Down

BTC

USD 34,138

-5% (as of midnight)

THE CLOSING BELL-

The EGX30 rose less than 0.1% at yesterday’s close on turnover of EGP 1.31 bn (5.7% above the 90-day average). Foreign investors were net buyers. The index is down 4.6% YTD.

In the green: GB Auto (+2.3%), AMOC (+1.9%) and Palm Hills Development (+1.5%).

In the red: Orascom Development Egypt (-2.3%), Cleopatra Hospital (-2.0%) and ElSewedy Electric (-1.6%).

Asian markets are mostly in the green this morning, with Chinese shares the outliers. European and US shares look set to 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; and Abu Auf (tax ID: 584-628-846), the leading health foodmaker in Egypt and the region.