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Sunday, 19 June 2022

Global CEOs spy recession on horizon + More on the crisis in EM debt markets

CEOs across the world are bracing themselves for a recession: Only a quarter of business leaders across the world expect their economies to avoid recession between now and the end of 2023, according to a survey. Conference Board’s poll of 750 CEOs and other C-suite execs found that more than 60% now expect their areas to fall into a recession by the end of next year while 15% believe that recession is already here.

What a difference six months makes: Just 22% of respondents predicted a recession in the firm’s survey in late 2021.

It’s a really, really bad time for EM debt: Rising rates and disruptions to the energy and commodities markets are adding a wave of unprecedented pressures on emerging market debt, the Financial Times and Wall Street Journal are both reporting. The difference in yields between the JPMorgan EMBI Global index — a benchmark index of USD-denominated EM sovereign bonds — and US treasuries has leapt in recent days. Over the past year, the index has risen from 300 bps to more than 400 bps, according to Bloomberg data cited by FT.

Foreign investors are rushing for the exits: Foreign participation in local debt markets has fallen to just 18%, its lowest level since 2009 as central banks remove the punchbowl of ultra-cheap money and raise interest rates, the salmon-colored paper cites the Institute of International Finance as saying.

ALSO FROM PLANET FINANCE-

  • All of Dubai’s Tecom shares snapped up in IPO: Investors reportedly bought 100% of the shares offered in Dubai business-park operator Tecom's IPO in the hours after subscription opened. (Bloomberg)
  • China wants a piece of Qatar’s huge natgas field: Chinese oil companies want to invest in Qatar’s North Field East — the world’s largest LNG project — and purchase gas under long-term contracts, according to people familiar with the matter. (Reuters)

Up

EGX30

9,867

-1.0% (YTD: -17.4%)

None

USD (CBE)

Buy 18.71

Sell 18.79

None

USD at CIB

Buy 18.73

Sell 18.79

None

Interest rates CBE

11.25% deposit

12.25% lending

Down

Tadawul

11,824

-1.3% (YTD: +4.8%)

Down

ADX

9,457

-0.5% (YTD: +11.4%)

Down

DFM

3,262

-0.6% (YTD: +2.1%)

Up

S&P 500

3,675

+0.2% (YTD: -22.9%)

Down

FTSE 100

7,016

-0.4% (YTD: -5.0%)

Up

Euro Stoxx 50

3,438

+0.3% (YTD: -20.0%)

Down

Brent crude

USD 113.12

-5.6%

Down

Natural gas (Nymex)

USD 6.94

-7.0%

Down

Gold

USD 1,840.60

-0.5%

Down

BTC

USD 19,354

-5.2% (YTD: -60.0%)

THE CLOSING BELL-

The EGX30 fell 1.0% at Thursday’s close on turnover of EGP 1.23 bn (32% above the 90-day average). Foreign investors were net sellers. The index is down 17.4% YTD.

In the green: Orascom Development Egypt (+2.2%), GB Auto (+2.0%) and Rameda (+1.9%).

In the red: Egypt Kuwait Holding-EGP (-3.0%), Cleopatra Hospitals (-2.8%) and Madinet Nasr Housing (-2.4%).

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