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Sunday, 22 August 2021

Investors flock to ETFs to mitigate China risk + BTC headed for 50k?

Wary of Beijing’s tech smackdown, some EM investors are trying to avoid China: Equity investors who prefer emerging markets yet fear Beijing's escalating regulatory crackdown are putting their money in an exchange-traded fund (ETF) that tracks emerging market equities excluding China, Bloomberg reports. The USD 1.2 bn iShares MSCI Emerging Markets ex-China ETF has lured USD 304.8 m of new investments so far this month — the highest monthly inflow since its founding four years ago. The fund’s “sales pitch is easy: Buy emerging markets, without the risk from China,” one money manager said.

Chinese-focused funds are heading in the opposite direction: The MSCI gauge of Chinese stocks, as well as the iShares MSCI China ETF that tracks it, hit their lowest levels in almost 14 months amid worries that China would tighten its tech and education regulations, erasing almost a third of its value since February. The USD 4.7 bn KraneShares CSI China Internet Fund is also on course to see its first weekly outflow since early July, after declining 58% from its record high in February to reach its lowest level since the covid market crash last year.

First Toyota, now VW: German automaker Volkswagen may have to cut its production by 40% due to the covid-induced chip shortage. “We currently expect supply of chips in the third quarter to be very volatile and tight … We can't rule out further changes to production,” the automotive giant told Reuters. VW’s statement came shortly after Toyota announced that it would have to cut production by 40% in September due to the semiconductor supply crunch.

Is USD 50k next for BTC as it hits multi-month highs? BTC has risen from a daily low of USD 40k to a high of almost USD 49.3k, hitting its highest level since mid-May, Bloomberg reports. The cryptocurrency’s price volatility has kept traders and investors on the edge of their seats as they expect BTC to breach the USD 50k mark thanks in no small part to institutional adoption and high-profile endorsements in the past year.

Down

EGX30

10,809

-0.9% (YTD: -0.3%)

None

USD (CBE)

Buy 15.65

Sell 15.75

None

USD at CIB

Buy 15.65

Sell 15.75

None

Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

11,201

-1.3% (YTD: +28.9%)

Down

ADX

7,620

-1.0% (YTD: +51.0%)

Down

DFM

2,838

-0.8% (YTD: +13.9%)

Up

S&P 500

4,441

+0.8% (YTD: +18.3%)

Up

FTSE 100

7,087

+0.4% (YTD: +9.7%)

Down

Brent crude

USD 65.18

-1.9%

Up

Natural gas (Nymex)

USD 3.85

+0.6%

Up

Gold

USD 1,784.00

+0.1%

Up

BTC

USD 49,366.19

+0.42% (as of midnight)

THE CLOSING BELL-

The EGX30 fell 0.9% at Thursday’s close on turnover of EGP 1.9 bn (27.6% above the 90-day average). Local investors were net buyers. The index is down 0.3% YTD as of Thursday’s close.

In the green: Palm Hills (+1.9%), CIRA (+1.1%), and GB Auto (+0.7%).

In the red: Fawry (-5.0%), Speed Medical (-2.6%), and Raya (-2.5%).

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