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Tuesday, 15 March 2022

Chinese shares suffer biggest sell-off since ‘08 on covid, Ukraine fears

Chinese stocks see biggest sell-off since the 2008 recession: Hong Kong-listed Chinese stocks had their worst day since the global financial crisis, as Beijing’s continued ties with Russia, regulatory concerns, and new covid-19 lockdowns sparked a panic selloff, Bloomberg reports. The Hang Seng China Enterprises Index closed down 7.2% in its biggest drop since 2008, while the Hang Seng Tech Index plunged 11% — its worst performance since the index’s 2020 launch — losing USD 2.1 tn in value.

Covid + geopolitics weight on shares: US officials claimed on Sunday that Moscow has asked China for military assistance to help in its war against Ukraine, sparking concerns among traders of blowback on Chinese firms that could extend to sanctions. This came on the same day that the city of Shenzhen, one of the country’s most important commercial hubs, entered full lockdown due to a surge in covid cases.

Shares in China are continuing to fall this morning, with the Hang Seng losing 2.4% as of dispatch time and the Shanghai index down 1.6%.

It wasn’t much better over on Wall Street, with tech shares suffering heavy losses as hopes for a Russia-Ukraine peace agreement dimmed and investors weighed the impact of the Shenzhen lockdown. The Nasdaq fell 1.9% leaving it down more than 20% from its peak in November, and the S&P 500 lost 0.7%. Apple dropped 2.7% in a sell-off sparked by the news that its supplier Foxconn had halted production in Shenzhen.

Later today: US stocks are currently on track to open in the green later today, while key European exchanges are looking at early losses.

In other business news worth knowing:

  • Saudi pharma retailer Al Dawaa soared on its trading debut, Bloomberg reports, marking the latest in a string of bumper public debuts in Riyadh. Shares in the pharma firm rose 18% to SAR 86.1, after pricing at the top of the range in its USD 500 mn IPO. The company sold 30% of its shares (25.5 mn shares) in the listing.
  • Binance has received licenses to provide crypto services in Dubai and Bahrain, Bloomberg reports.

Down

EGX30

10,420

-0.6% (YTD: -12.8%)

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

12,492

-0.9% (YTD: +10.7%)

Down

ADX

9,542

-1.0% (YTD: +12.4%)

Down

DFM

3,354

-1.4% (YTD: +4.9%)

Down

S&P 500

4,173

-0.7% (YTD: -12.4%)

Up

FTSE 100

7,193

+0.5% (YTD: -2.6%)

Down

Brent crude

USD 106.90

-5.1%

Up

Natural gas (Nymex)

USD 4.67

+0.3%

Down

Gold

USD 1,954.90

-0.3%

Up

BTC

USD 39,053

+1.0% (as of midnight)

THE CLOSING BELL-

The EGX30 fell 0.6% at yesterday’s close on turnover of EGP 771 mn (16.5% below the 90-day average). Local investors were net buyers. The index is down 12.8% YTD.

In the green: MM Group (+1.8%), Egypt Kuwait Holding-EGP (+1.3%) and Madinet Nasr Housing (+1.2%).

In the red: Rameda (-5.5%), Ibnsina Pharma (-5.3%) and TMG Holding (-3.6%).

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