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Sunday, 3 October 2021

Forget about crypto — central banks are worried about their own digital currencies

Central banks are still worrying about the effects of central bank digital currencies (CBDCs) on the global financial system: Adoption of national digital currencies could exacerbate financial crises in the future by intensifying runs on commercial banks, according to a report (pdf) by the Bank of International Settlements picked up by Bloomberg. The report’s authors suggest that during future crises depositors could see digital currencies safe haven assets, resulting in increased flight from banks and more liquidity stress. It is also possible that investors begin to put more of their capital into digital currencies and less into other low-risk assets such as treasuries and money market funds, potentially pushing up yields in the money markets.

The era of national digital currencies is getting closer: China is getting closer and closer to issuing its digital yuan on a national level, and this is pushing other central banks around the world to think about issuing their own digital currencies. The Federal Reserve, the European Central Bank and the Bank of Japan are all considering moving forward with digital versions of their own national currencies.

CLOSER TO HOME- The institutional allocation of ACWA Power’s IPO was nearly 248x oversubscribed as investors lined up for a piece of the Saudi renewable energy player, reports CNBC Arabia. The Saudi outfit — which has operations here in Egypt — is set to raise USD 1.2 bn from the sale of an 11.1% stake. Our friends at EFG Hermes KSA are bookrunners on the transaction alongside Emirates NBD Capital and FAB.

Also from the kingdom: Saudi’s sovereign debt just got a major boost: Saudi Arabia’s sukuk will as of next April be included in the FTSE’s local currency Emerging Markets Government Bond Index, giving KSA’s sovereign debt better visibility with money managers, Saudi’s Tadawul announced Friday.

Vulture funds are lapping up Evergrande debt, expecting that the Chinese government will ride to the rescue and bail out the property giant, the Financial Times reports. The news comes after the world’s most indebted company missed another bond payment on Friday.

Up

EGX30

10,517

+1.2% (YTD: -3.0%)

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

Up

Tadawul

11,495

+1.0% (YTD: +32.3%)

Down

ADX

7,699

-0.4% (YTD: +52.6%)

Up

DFM

2,845

+0.7% (YTD: +14.2%)

Up

S&P 500

4,357

+1.2% (YTD: +16.0%)

Down

FTSE 100

7,027

-0.8% (YTD: +8.8%)

Up

Brent crude

USD 79.28

+1.2%

Down

Natural gas (Nymex)

USD 5.62

-4.2%

Up

Gold

USD 1,758.40

+0.1%

Down

BTC

USD 48,167.50

-0.54% (as of midnight)

THE CLOSING BELL-

The EGX30 rose 1.2% at Thursday’s close on turnover of EGP 906 mn (42.6% below the 90-day average). Local investors were net sellers. The index is down 3.0% YTD.

In the green: Raya Holding (+6.8%), Orascom Development Egypt (+4.8%) and AMOC (+3.8%).

In the red: Egypt Kuwait Holding-EGP (-0.9%), Mopco (-0.6%) and Abou Kir Fertilizers (-0.5%).

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; and Abu Auf (tax ID: 584-628-846), the leading health foodmaker in Egypt and the region.