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Tuesday, 28 September 2021

EM bonds see heavy outflows over Evergrande, Fed taper

EM bonds see heavy outflows over Evergrande, Fed taper: Investors made a hasty exit from exchange-traded emerging-market bond funds last week, as China’s wobble over the Evergrande crisis and expectations for a Fed taper later this year led investors to withdraw from riskier debt. Investors withdrew almost USD 83 bn from EM debt ETFs last week, according to Bloomberg data. The biggest fund, the USD 20 bn iShares JPMorgan USD Emerging Markets Bond ETF, saw portfolio managers withdraw USD 781 mn last week, its biggest weekly outflow in almost seven months.

On the bright side: EM equities gained enough fresh investment to offset the debt-fund losses, with EM stock ETFs seeing USD 256.3 mn of inflows during the week. One money manager told Bloomberg that the debt-buying dip is simply “a healthy pause and small correction” to the recent recovery in EM bonds: “I see it as a bit of indigestion with two big risk events that took place last week: US Fed and Evergrande.”

ACWA Power sets share price in USD 1.2 bn IPO: ACWA Power has set its share price at SAR 56 per share ahead of its IPO on the Saudi bourse next month, banking sources told CNBC Arabia yesterday. The public offering of 81.2 mn shares, or an 11.1% stake, is set to raise USD 1.2 bn, the sources said. Bookbuilding on the IPO ended today, while subscription for individual investors will run from 29 September to 1 October. Our friends at EFG Hermes KSA are bookrunners alongside Emirates NBD Capital and FAB.

Abu Dhabi National Oil Company (Adnoc) completed the bookbuild and public subscription for its Drilling Company’s IPO, raising USD 1.1 bn, the company announced (pdf). The company received bids worth USD 34 bn from institutional investors, making the offering 31x oversubscribed. The company will go public and start trading on the ADX on 3 October. The company was initially offering 7.5% of its drilling unit at AED 2.30 per share, valuing the company at USD 10 bn, but increased the offering size after being met with huge demand. Our friends at EFG Hermes UAE are bookrunners on the transaction along with Emirates NBD Capital, Merrill Lynch and Société Générale.

Down

EGX30

10,496

-1.4% (YTD: -3.2%)

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

Up

Tadawul

11,369

+0.1% (YTD: +30.8%)

Down

ADX

7,751

-0.3% (YTD: +53.6%)

Down

DFM

2,817

-0.5% (YTD: +13.1%)

Down

S&P 500

4,443

-0.3% (YTD: +18.3%)

Up

FTSE 100

7,063

+0.2% (YTD: +9.3%)

Up

Brent crude

USD 79.53

+1.8%

Up

Natural gas (Nymex)

USD 5.80

+1.7%

Down

Gold

USD 1,750.50

-0.1%

Down

BTC

USD 43,083

-1.11% (as of midnight)

THE CLOSING BELL-

The EGX30 fell 1.4% at yesterday’s close on turnover of EGP 1.27 bn (20% below the 90-day average). Regional investors were net buyers. The index is down 3.2% YTD.

In the green: GB Auto (+1.0%).

In the red: Ezz Steel (-9.9%), MM Group (-6.2%) and Egyptian Resorts Company (-5.9%).

Asian markets are mixed this morning, with the Nikkei and Kospi both in the red and shares in both Hong Kong and Shanghai hanging onto their gains. Futures suggest the sell-off on the tech-heavy Nasdaq could continue at the opening bell this afternoon, while both the Dow and S&P should open in the green. The CAC 40, DAX 30 and FTSE 100 are all set to open in positive territory in a few hours’ time.

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.

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