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Wednesday, 6 July 2022

Boomtime over? Tecom shares fall in Dubai debut

Another sign that the Gulf IPO boom may have peaked: Dubai business park operator Tecom Group dropped as much as 17% in its trading debut in Dubai yesterday, in a fresh sign that Gulf markets are finally feeling the same headwinds as the rest of us. Tecom’s IPO was massively oversubscribed, drawing USD 9.6 bn in orders for its USD 454 mn IPO. But in a reversal of fortunes yesterday, the real estate firm suffered major selling pressure when the markets opened, and ended the day 8.6% in the red at AED 2.44.

Gulf public offerings had for some time been one of 2022’s only bright spots for global equities, which have been battered by soaring inflation, rising interest rates, and geopolitical uncertainty. The Gulf IPO market had a record first half of the year as surging oil prices buoyed the region’s financial markets.

But that could now be starting to change: Shares in Saudi Arabia, the UAE and Qatar have fallen back dramatically over the past two months as concerns over the global economic outlook overshadow oil revenues. Another indication that the market is running out of steam came earlier this week, when Saudi Arabia’s Al Othaim family said it would cancel plans to sell a 30% stake in its malls business to the public.

A rare event: Shares rarely fall on debut in the Gulf. The last stock to suffer opening day losses in Dubai was Emaar Development back in November 2017, according to Bloomberg.

ALSO IN PLANET FINANCE-

  • Riyadh + Abu Dhabi announce new social support amid soaring inflation: Saudi Arabia and the UAE have set aside a combined USD 13 bn to support low-income citizens struggling with rising living costs. (SPA | WAM)
  • You win some: Shell has bought a 6.25% stake in Qatar Energy’s USD 29 bn gas megaproject, following the likes of Total, Exxon, and Eni. (Shell | Qatar Energy)
  • You lose some: Shell may be forced to exit its USD 4.1 bn stake in a major Russian oil and gas project after the Kremlin announced plans to transfer ownership to a Russian company. (The Guardian)

Down

EGX30

8,686

-0.3% (YTD: -27.6%)

Up

USD (CBE)

Buy 18.83

Sell 18.91

Up

USD at CIB

Buy 18.85

Sell 18.91

None

Interest rates CBE

11.25% deposit

12.25% lending

Down

Tadawul

11,345

-0.1% (YTD: +0.6%)

Down

ADX

9,270

-0.4% (YTD: +9.2%)

Down

DFM

3,122

-1.1% (YTD: -2.3%)

Up

S&P 500

3,831

+0.2% (YTD: -19.6%)

Down

FTSE 100

7,025

-2.9% (YTD: -4.9%)

Down

Euro Stoxx 50

3,360

-2.7% (YTD: -21.8%)

Down

Brent crude

USD 104.84

-7.6%

Down

Natural gas (Nymex)

USD 5.65

-3.5%

Down

Gold

USD 1,768.40

-2.3%

Down

BTC

USD 20,210

-0.7% (YTD: -56.1%)

THE CLOSING BELL-

The EGX30 fell 0.33% at yesterday’s close on turnover of EGP 953.9 mn (13.4% above the 90-day average). Local investors were net buyers. The index is down 27.6% YTD.

In the green: Madinet Nasr Housing (+8.0%), MM Group (+5.2%) and Orascom Construction (+5.1%).

In the red: Fawry (-7.8%), Ibnsina Pharma (-6.5%) and Cleopatra Hospitals (-5%).

It’s a sea of red in Asia this morning as stocks sell-off on fears of an oncoming recession. Things aren’t looking that much better in Europe and the US, where futures are pointing to heavy losses when markets open later today.

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