US firms are rushing to prop up their share prices amid market volatility: US companies have bought back a record number of shares so far this year in a bid to bolster investor confidence as the mood in the markets sours. Data from Goldman Sachs picked up by the Financial Times shows that firms have spent USD 319 bn buying back shares in 2022, compared to USD 267 bn over the same period last year.

US stocks were enduring one of their worst opening quarters in years before a recent rally, as rising interest rates, soaring commodity prices and the war in the Ukraine sparked a sell-off in shares. Over the past two weeks, the tech-heavy Nasdaq has pulled itself out of a bear market and is now down less than 10% year-to-date, while the S&P 500 has pared YTD losses to 4.7%.

SOUND SMART- Buybacks are often used to support companies’ shares prices and stimulate investor demand, especially following a sell-off when shares can be bought more cheaply and are viewed as undervalued. By reducing the number of shares in the market, companies can increase their value on an earnings-per-share basis (assuming earnings don’t fall, of course), and propping up the share price.

Energy bonds are clawing their way out of the junk pile, as the rise in crude prices and a more cautious approach toward new drilling attracts investors back to high-yield debt, the Financial Times reports. The gap in borrowing costs between low-rated corporate energy debt and US government bonds is narrowing, according to one junk-bond benchmark index, as companies switch from pouring funds into new exploration to paying down their existing debt, reducing the perceived risk to investors.

Not since before the 2014 energy crisis in the US have junk-rated energy bonds performed so well — with JPMorgan now expecting some USD 68 bn worth of North American debt to be reclassified as investment grade by the end of 2023.

ALSO FROM PLANET FINANCE- KSA supermarket chain BinDawood Holding bought a majority stake in e-commerce app developer International Applications Trading Co. for around USD 28.7 mn, subject to increase based on future probability.

THE CLOSING BELL-

The EGX30 fell 1.4% at yesterday’s close on turnover of EGP 1.0 bn (3% above the 90-day average). Foreign investors were net sellers. The index is down 3.4% YTD.

In the green: Sidi Kerir Petrochem (+4.5%), Heliopolis Housing (+1.9%) and AMOC (+1.4%).

In the red: GB Auto (-17.0%), MM Group (-16.0%) and Ezz Steel (-3.9%).

Asian markets are mixed this morning, with the leading Nikkei, Kospi and Shanghai benchmarks all in the red. The Hang Seng and Australia’s ASX 200 were clinging to the green. Futures suggest a mixed open in Europe later today: Paris’ CAC 40 looks set to open in the red, while Frankfurt’s DAX and the London Stock Exchange should both open (barely) in the green. Expect red at the opening bell on Wall Street.