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Tuesday, 5 October 2021

Global trade forecasts for the coming year are on the up, WTO says

Things are looking up for global trade: The World Trade Organization (WTO) raised its 2021 and 2022 global merchandise trade forecasts, with the 2021 prediction currently sitting at 10.8% from the previously forecasted 8% and 2022 forecasts increasing to 4.7% from 4%, according to WTO statement. “This strong growth underscores how important trade will be in underpinning the global economic recovery,” Director-General Ngozi Okonjo-Iweala said. The director-general warned that continued vaccine inequity could set back economic progress, and the organization’s optimistic forecast might not be met due to “spikes in inflation, longer port delays, higher shipping rates, and extended shortages of semiconductors.”

Evergrande suspended its share trading in Hong Kong yesterday in preparation for the possible sale of its property management unit as the company scrambles to raise funds after it defaulted on bond payments last week, the Financial Times reported. Evergrande Property Services Group, which has a market cap of USD 7.1 bn, also suspended trading of its stock, saying an unnamed buyer could soon be making an offer for its shares. The company is hoping to raise more than USD 5 bn by offloading a majority stake in its property management arm, part of a huge restructuring effort to unwind the USD 305 bn debt mountain it has accumulated.

ALSO FROM CHINA- Lots of US ETF revenues, according to an analysis by Bank of America that found that nearly 25% of earnings generated by companies in ETFs following US stocks came from China, the Financial Times reports. The research found that 303 listed companies worth USD 19 tn currently make at least 5% of their revenue from China, meaning that China’s ongoing crackdown on private business could reverberate strongly in the global economy.

AND- The Biden administration has signalled it will not remove Trump-era trade tariffs on China, and will continue to insist that China uphold its purchasing commitments under the first phase of a trade deal signed in 2020, which China looks to be falling short of by 30% this year. The US may however exclude some Chinese imports from Trump-era tariffs, which it says have dragged on some sectors of the US economy. Officials did not rule out imposing further tariffs if China does not agree to limit its broad industrial subsidies, which have undercut the competitiveness of US tech exports, ahead of the first trade talks expected to be held between both countries since 2020.

Up

EGX30

10427.44

+0.6% (YTD: -3.9%)

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

11,466.91

+0.1% (YTD: +32%)

Down

ADX

7,698.26

-0.3% (YTD: +52.6%)

Down

DFM

2,812.14

-0.8% (YTD: +12.9%)

Down

S&P 500

4,303.08

-1.2% (YTD: +14.6%)

Down

FTSE 100

7,011.01

-0.2% (YTD: +8.5%)

Up

Brent crude

USD 81.32

+2.6%

Up

Natural gas (Nymex)

USD 5.78

+2.8%

Up

Gold

USD 1,766.60

+0.5%

Up

BTC

USD 49,391.59

+2.5% (as of midnight)

THE CLOSING BELL-

The EGX30 rose 0.6% at yesterday’s close on turnover of EGP 963 mn (38.4% below the 90-day average). Regional investors were net buyers. The index is down 3.9% YTD.

In the green: Pioneers Holding (+5.0%), MM Group (+3.8%) and Fawry (+2.6%).

In the red: Orascom Development Egypt (-3.3%), Rameda (-2.0%) and GB Auto (-1.9%).

It’s a mixed kind of day in global markets. Shares in Shanghai and Hong Kong are comfortably in the green this morning, while the Kospi (-1.9%) and Nikkei (-2.8%) are both down. Futures suggest a similar story in Europe later this morning when markets open: The CAC 40 in Paris is on track to start the day in the red, while the FTSE 100 and DAX 30 should start the day in the green. Wall Street looks (just barely) set to start the day in the green.

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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