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Monday, 6 September 2021

Desperate for returns, bond investors are buying the junkiest junk they can find

Ultra-low rates are driving investors hungry for yield into the riskiest types of debt, the Wall Street Journal reports. Faced with paltry returns on most speculative-grade debt and tightening spreads, fund managers are buying into corporate debt with the lowest credit ratings — and driving yields down even further in the process. Bonds rated triple-C or lower had offered an extra 2.79 percentage points of spread at the start of the year but thanks to the buying spree, this had dropped to a 20-year low of 1.51 percentage points in July.

Aramco slashes Asia crude prices as production ramps up: Saudi Aramco cut October prices for Asia by more than twice the expected amount in a sign that the world’s biggest oil exporter is looking to compete for a greater market share, Bloomberg reports. Arab Light crude, the company’s main oil grade, has been discounted by USD 1.30 a barrel to a premium of USD 1.70 more than the regional benchmark. With Brent crude up 40% this year and OPEC+ last week deciding to add another 400k bbl/d to the market in October, Aramco seems to be taking a more aggressive line on pricing as it fights to export as many barrels as possible before domestic demand likely drops off in the fall.




-1.8% (YTD: +2.3%)



Buy 15.65

Sell 15.75



Buy 15.65

Sell 15.75


Interest rates CBE

8.25% deposit

9.25% lending




+0.1% (YTD: +30.5%)




-0.2% (YTD: +51.4%)




-% (YTD: +16.9%)


S&P 500


-% (YTD: +20.8%)


FTSE 100


-0.4% (YTD: +10.5%)


Brent crude

USD 72.61



Natural gas (Nymex)

USD 4.71




USD 1,833.70




USD 51,705

+3.0% (as of midnight)


The EGX30 fell 1.8% at yesterday’s close on turnover of EGP 1.5 bn (0.2% above the 90-day average). Local investors were net sellers. The index is up 2.3% YTD.

In the green: EK Holding (+0.9%), CIRA (+0.2%).

In the red: Egyptian for Tourism Resorts (-11.9%), Orascom Development Egypt (-5.7%) and Pioneers Holding (-4.5%).

Asian markets are mostly in the green in early trading this morning. Futures in Europe suggest markets there will open largely in the red today. US and Canadian markets are closed in observance of Labor Day.

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. © 2022 Enterprise Ventures LLC.

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