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Sunday, 10 April 2022

Food is more expensive than ever + EM funds brace for a tough year

Global food prices surged to a new all-time high in March as the Russia-Ukraine war battered already inflated commodities and grains markets, according to new UN data released Friday. The FAO Food Price Index rose to 159.3 points in March, up 34% y-o-y and eclipsing its record in February by almost 13%.

This is the second record high in as many months. Food prices are now more than 15% higher than the previous all-time high, recorded in February 2011.

Wheat prices soared almost 20% during the month, as the war disrupted exports from major exporters Russia and Ukraine — and exacerbated by crop conditions in the US.

Emerging-market fund managers are bracing for greater outflows and weaker earnings this year as the Russia-Ukraine war and battered Chinese markets weigh on investors, the Financial Times reports, citing a survey by Bank of America (BofA). The bank slashed its earnings forecast for one EM fund manager, Ashmore, by 6-9% in 1Q2022. “Emerging market debt saw outflows, not only for Ashmore but across the industry this quarter, which shouldn’t be a big surprise given higher US interest rates, higher rate expectations, strong USD and the Russia-Ukraine conflict,” said one BofA analyst.

Russia’s removal from EM indexes could be good news for Turkey: Turkey is poised for a pick up in passive bond inflows after seeing its weighting in major emerging-market bond indexes increase following the removal of Russian debt. US and EU sanctions have led to the removal of Russian debt from key indexes such as JPMorgan’s benchmark, which has boosted Turkey’s weighting to 4%. (Bloomberg)

ALSO- Shell faces up to USD 5 bn loss for Russia exit: Shell expects to lose USD 4-5 bn in 1Q 2022 as a result of its exit from Russia. The figure is higher than previously thought, with Shell initially estimating it would take a USD 3.4 bn hit. (Statement)

Down

EGX30

11,102

-2.2% (YTD: -7.1%)

Down

USD (CBE)

Buy 18.29

Sell 18.39

Down

USD at CIB

Buy 18.29

Sell 18.39

None

Interest rates CBE

9.25% deposit

10.25% lending

Up

Tadawul

13,314

+0.4% (YTD: +18.0%)

Up

ADX

10,094

+1.0% (YTD: +18.9%)

Up

DFM

3,542

+0.8% (YTD: +10.8%)

Down

S&P 500

4,488

-0.3% (YTD: -5.8%)

Up

FTSE 100

7,670

+1.6% (YTD: +3.9%)

Up

Euro Stoxx 50

3,858

+1.5% (YTD: -10.2%)

Up

Brent crude

USD 102.78

+2.2%

Down

Natural gas (Nymex)

USD 6.28

-1.3%

Up

Gold

USD 1,945.60

+0.4%

Up

BTC

USD 42,623

+0.5% (as of midnight)

THE CLOSING BELL-

The EGX30 fell 2.2% at Thursday’s close on turnover of EGP 992.89 mn (2.5% above the 90-day average). Foreign investors were net sellers. The index is down 7.1% YTD.

In the green: Rameda (+3.1%), CIRA (+1.2%) and Orascom Development Egypt (+0.7%).

In the red: Mopco (-10.3%), Fawry (-6.0%) and MM Group (-5.4%).

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. © 2022 Enterprise Ventures LLC.

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