A glimmer of hope for EMs rolling into 2022
It’s not necessarily all doom and gloom for emerging market assets next year: With global rates now expected to rise sharply next year, inflation and supply chain issues biting, and a key EM equity ETF now 12% in the red during the comparatively sunny 2H2021, there’s no shortage in doom-laden 2022 outlooks for emerging economies. A year of stunted growth, debt crises, and surging inflation isn’t a given though, according to some analysts who tell Barron’s that the second half of the year could be positive for EM assets should inflation start to ease and China roll out the stimulus. EM equities are currently trading at a near-record discount to US shares, priming them for a rebound should the macro stars align later next year.
MEANWHILE- International banks in the UAE will shift to the Monday-Friday work week newly adopted by the government starting January, Reuters reports. Among them: JPMorgan, Bank of America and Deutsche Bank.
Also worth noting this morning:
- European energy prices surged to new record highs due to colder temperatures, with benchmark natural gas prices seven times higher than at the start of the year. (Bloomberg)
- Shipping and logistics contract prices are expected to nearly double in 2022, with supply chain bottlenecks carrying over into the new year and companies racing to leverage rising demand and inflationary pressure to raise prices. (Wall Street Journal)
- Saudi delivery firm Jahez prices IPO at top of range: The Delivery Hero competitor has set a final price of SAR 850 per share in its 39x oversubscribed market debut, making it one of the most valuable public tech firms in the region at around SAR 8.9 bn. (Bloomberg)
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EGX30 |
11,566 |
-0.9% (YTD: +6.6%) |
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USD (CBE) |
Buy 15.66 |
Sell 15.76 |
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USD at CIB |
Buy 15.66 |
Sell 15.76 |
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Interest rates CBE |
8.25% deposit |
9.25% lending |
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Tadawul |
11,160 |
-1.3% (YTD: +28.4%) |
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ADX |
8,651 |
-2.3% (YTD: +71.5%) |
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DFM |
3,157 |
-3.6% (YTD: +26.7%) |
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S&P 500 |
4,621 |
-1.0% (YTD: +23.0%) |
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FTSE 100 |
7,630 |
+0.1% (YTD: +12.5%) |
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Brent crude |
USD 70.86 |
-2.1% |
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Natural gas (Nymex) |
USD 3.69 |
-2.0% |
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Gold |
USD 1,804.90 |
+0.4% |
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BTC |
USD 46,815.44 |
+0.2% |
THE CLOSING BELL-
The EGX30 fell 0.9% at yesterday’s close on turnover of EGP 699 mn (49.3% below the 90-day average). Local investors were net buyers. The index is up 6.6% YTD.
In the green: Speed Medical (+6.7%), CIRA (+4.5%) and Fawry (+0.4%).
In the red: Orascom Development (-5.2%), MM Group (-4.0%) and Egypt-Kuwait Holding-EGP (-3.4%).
Major benchmarks across Asia are solidly in the red after China enacted its first interest rate cut since April 2020 and traders fretted about the impact of the omicron variant of covid-19. Futures suggest shares on Wall Street, in Europe, and in Canada will follow suit later today.