Is a golden era for emerging market equities around the corner? Investors are banking on a rebound in EM stocks, with EM equity funds having seen USD 81 bn in inflows so far this year, despite market volatility caused by China’s regulatory crackdown on tech and education businesses last month, the Financial Times reports. “If concerns about the Delta variant moderate a little bit and we don’t get more significant anti-market interventions in China, I think there will be a reasonable rebound,” said one Goldman Sachs strategist. Though EM bonds have remained weak throughout the past year, Latin American government bonds and Asian equities are poised to benefit from rising global inflation, as investors turn to equities with a chance of outpacing price growth.

OPEC+ will continue with plans to hike output by 400k bpd next month, after members agreed in a virtual meeting yesterday to press ahead with plans to undo oil production cuts — imposed during covid-19 to protect prices from plummeting demand — as oil prices continue to recover, Bloomberg reports. The group had earlier this week revised upwards its demand forecast for 2022 to 4.2 mn bpd from 3.3 mn previously. OPEC+ had reached an agreement in July to gradually increase production through the end of 2022, extending the supply cuts to December 2022 instead of April. The group will next meet to consider oil supply on 4 October, according to Reuters.

Factory backlogs pile up: The pandemic has trampled on the delicate, interconnected web of supply-and-demand that is the global goods trade, Bloomberg reports. Repairing it is proving more difficult than thought: the rise of the delta variant in parts of Asia, raw materials and parts shortages, and low shipping capacity mean that orders are piling up at factories worldwide. Unfulfilled orders hit record highs in Europe in August, while manufacturing PMIs showed contraction in Indonesia, Vietnam, Thailand, Philippines and Malaysia, with slowdowns also expected in the US. Meanwhile, foreign buyers are stressed that they won’t be able to fill the shelves in time for the end-of-year holiday season.

China’s manufacturing activity contracted for the first time in over a year in August, according to the Chinese Caixin Manufacturing PMI, which slipped to 49.2 from 50.3 in July. The Financial Times attributed the decline to the country’s strict response to its recent covid-19 outbreak.

THE CLOSING BELL-

The EGX30 rose 1.3% at yesterday’s close on turnover of EGP 1.5 bn (1% above the 90-day average). Local investors were net sellers. The index is up 4% YTD.

In the green: Pioneers Holding (+4.3%), Fawry (+3.4%) and Rameda (+2.8%).

In the red: Heliopolis Housing (-0.9%), Raya (-0.7%) and Mopco (-0.7%).