EM currencies see biggest losses since 2020: Emerging-market currencies are suffering as investors pull out of risk assets in response to rising interest rates in the US and the economic slowdown in China, according to the Financial Times. The MSCI Emerging Markets Currency Index dropped over 4% since the beginning of April, the largest fall since the onset of the pandemic in early 2020. The sell-off comes as the Federal Reserve embarks on its most aggressive tightening cycle in decades, strengthening the USD and pulling money out of risky EM assets and into the US financial system.

The same factors are weighing on EM debt, which JPMorgan strategists say are at the “mercy” of Fed policymakers. The asset class has seen USD 4 bn in net outflows since the middle of last month while a JPMorgan gauge of EM bonds has slumped 16% so far this year, with rates being responsible for “most of the losses,” the investment bank said. "The external and fundamental backdrop has become increasingly difficult for EM sovereigns," they said. "The covid lockdown in China poses further downside risks."

“What downturn?,” asks the Gulf IPO market: The world’s biggest asset managers are heading to the Gulf to get a piece of the region’s red-hot IPO market, where companies are capitalizing on the surge in oil revenues and selling shares to the public, Bloomberg reports. Middle Eastern companies have traditionally sought listings in more developed markets in the US and UK, but investors are increasingly being drawn to exchanges in the region as the volume of IPOs rises while offerings slow abroad. Two of the world’s biggest asset managers, BlackRock and Vanguard, both bought into Dubai Electricity & Water Authority’s IPO, which raised USD 6.1 bn last month.

THE CLOSING BELL-

The EGX30 fell 0.9% at yesterday’s close on turnover of EGP 637 mn (27.5% below the 90-day average). Local investors were net buyers. The index is down 9.5% YTD.

In the green: Cleopatra Hospitals (+4.6%) and CIB (+0.2%).

In the red: Abu Qir Fertilizers (-3.8%), Orascom Construction (-2.9%) and Fawry (-2.7%).