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Wednesday, 25 August 2021

Cost of borrowing is higher for economies with poor climate performance

Developed nations lagging behind on green goals may soon find themselves in a pool of sovereign debt: Recent research has shown that countries that perform poorly on transitioning to a low-carbon economy are prone to suffering from increased sovereign borrowing costs, liquidity crunches and a lack of reserves to finance economic recovery amid climate shocks or natural disasters, Bloomberg reports. These economies could be in line for a 26 basis-point rise in yields for every 1 percentage point increase in carbon emissions, the study showed, indicating that countries with lower carbon emissions incur lower risk premiums on sovereign debt.

Up

EGX30

10950.24

+0.61% (YTD: +0.97%)

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

Up

Tadawul

11,141.03

+0.7% (YTD: +28.21%)

Down

ADX

7,681.53

-0.03% (YTD: +52.25%)

Up

DFM

2,904.10

+0.6% (YTD: +16.54%)

Up

S&P 500

4,486.23

+0.2% (YTD: +19.44%)

Up

FTSE 100

7,125.78

+0.2% (YTD: +10.30%)

Down

Brent crude

USD 70.80

-0.4%

Down

Natural gas (Nymex)

USD 3.88

-0.5%

Down

Gold

USD 1,796.20

-0.7%

Down

BTC

USD 48,103.35

-2.04% (as of midnight)

THE CLOSING BELL-

The EGX30 rose 0.6% at yesterday’s close on turnover of EGP 2.57 bn (45.5% above the 90-day average). Regional investors were net buyers. The index is up 1% YTD.

In the green: Egyptian Resorts Company (+10.0%), Ibnsina Pharma (+5.1%) and Pioneers Holding (+4.1%).

In the red: Orascom Development Egypt (-2.0%), AMOC (-1.7%) and Medinet Nasr Housing (-1.7%).

Asian shares are mixed this morning, with leading indexes in Japan and Shanghai up while shares in Hong Kong and Korea are in the red. Shares in Europe and on Wall Street also look set to open in the red today, if futures are any indication, while Bay Street is still clinging to 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.