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Sunday, 12 September 2021

Wall Street is turning bearish on stocks + economists forecast early Fed rate hike

Have US equities peaked? Some analysts are beginning to think so, after US stocks last week saw their worst performance since June, according to the Financial Times. The S&P 500 closed down 1.7% over the week on Friday and the tech-heavy Nasdaq lost 1.6% as investors started to take heed of rising inflation and high costs caused by global supply chain disruptions as the delta variant stymies production.

Not helping matters: The majority of economists surveyed by the Financial Times think that the Federal Reserve will raise interest rates earlier than expected, with 70% pencilling in a minimum 0.25% increase in 2022 and nearly a fifth thinking it will come in the first six months of the year. The Fed still maintains that it will not move to raise rates until 2023 to avoid jeopardizing the economic recovery and protect the markets.

We’ll explore this in more depth in a Macro Picture in today’s EnterprisePM. Stay tuned.

IN OTHER NEWS FROM THE REGION-

Saudi Aramco is splitting its gas operations into two separate divisions, the Southern Area Gas Operations and Northern Area Gas Operations, as the company looks to prepare itself for the transition away from oil, unnamed sources tell Bloomberg. This is the same structure currently used by the company’s oil operations, and could help it focus on developing its gas assets and operations in the chemicals sector.

Asset manager Al Dhabi Capital (ADC) has launched a MENA-focused equities fund, seeded with USD 100 mn from its UAE-based parent company Al Dhabi Investment. ADC said that the new fund “follows a bottom-up process and seeks to invest in liquid equities with a long-term, buy-and-manage approach,” Reuters reported. The asset manager already manages over USD 600 mn in public equities on behalf of institutional investors.

Down EGX30 11,056 -0.7% (YTD: +2.0%)
None USD (CBE) Buy 15.66 Sell 15.76
None USD at CIB Buy 15.66 Sell 15.76
None Interest rates CBE 8.25% deposit 9.25% lending
Down Tadawul 11,417 -0.3% (YTD: +31.4%)
Up ADX 7,860 +1.2% (YTD: +55.8%)
None DFM 2,907 0.0% (YTD: +16.7%)
Down S&P 500 4,458 -0.8% (YTD: +18.7%)
Up FTSE 100 7,029 +0.1% (YTD: +8.8%)
Up Brent crude USD 72.92 +2.1%
Down Natural gas (Nymex) USD 4.94 -1.9%
Down Gold USD 1,792.10 -0.4%
Up BTC USD 45,343 +1.7% (as of midnight)

THE CLOSING BELL-

The EGX30 fell 0.7% at Thursday’s close on turnover of EGP 1.20 bn (21.6% below the 90-day average). Local investors were net sellers. The index is up 2.0% YTD.

In the green: Eatern Company (+6.8%), Rameda (+3.5%), and Oriental Weavers (+2.3%).

In the red: Raya Holding (-6.8%), GB Auto (-4.4%), and Egyptian Resorts Company (-3.1%).

IN OTHER MARKET NEWS-

The National Printing Company has raised its bid to fully acquire Shorouk Modern Printing, the Financial Regulatory Authority announced in a statement (pdf). The FRA approved the amendments to the deal, which raised the share price from EGP 52-54 to EGP 74.5 per share. The National Printing Company currently owns 89.9% of Modern Shorouk.

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