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Sunday, 31 July 2022

Bull rally or bear rally?

After chaotic 1H 2022, tech earnings drive US stocks’ best performance in years: US stocks saw their best month since 2020 in July with S&P 500 gaining 9.1% and the Nasdaq jumping 12.3% as financial markets rebounded on better-than-expected tech earnings and ominous economic data that investors hope will force the Fed to ease off the interest rate hikes, the Financial Times writes.

Let’s not get ahead of ourselves: Up until last month, US financial markets were having one of their worst years on record as rising inflation and the war in Ukraine sent stocks and bonds tumbling. The question now is whether the July rally was a genuine rebound or merely a pause in the bear market. “Every bear market has strong rallies within it,” one strategist said. “We’re in one of those tricky periods here where it’s not clear if we’ve seen the low, or if this is a rally within a larger bear market.”

European funds are pessimistic: European asset managers are bracing for more of the same in the second half of the year as the drivers of the 1H 2022 sell-off continue to impact the markets, according to Financial Times. “The economic outlook is incredibly tough,” said Schroders CEO Peter Harrison. “There are inflationary pressures that aren’t going to abate quickly and a war in Ukraine which isn’t going to end for a considerable while.”

The gap between big, diversified asset managers and more narrow-focused ones is growing: While the performance of equity markets prompted many clients to pull funds from asset managers in the first half of the year, the most diversified asset managers — like London-listed Schroders — still benefited from continued growth as they shifted their focus to fast-growing markets like wealth and pension funds. More narrow-focused asset managers, including the likes of Jupiter and Janus Henderson, however, saw assets under management fall and share prices plunge.

ALSO FROM PLANET FINANCE-

  • From Lekela to Yellow Door: Private equity firm Actis is acquiring a majority stake in the UAE’s industrial renewables firm Yellow Door Energy, the company said Thursday, without disclosing the value or details of the transaction. (Statement)
  • The Musk-Twitter showdown continues: Tech b’naire Elon Musk has countersued Twitter, escalating his legal battle with the social networking website after he walked away from his USD 44 bn acquisition bid. The details of the suit are yet to be made public after Musk requested confidentiality yet it was filed hours after the Delaware court ordered a five-day trial beginning 17 October. Twitter sued Musk earlier this month in a bid to force him to buy the company. (CNBC)
  • Moscow + Riyadh are still on the same page over OPEC+: Russia and Saudi Arabia agreed to remain “firmly committed” to OPEC+ and its goals of maintaining market stability during talks last week ahead of Wednesday’s OPEC+ meeting. (Statement)

Up

EGX30

9,369

+0.9% (YTD: -21.6%)

None

USD (CBE)

Buy 18.89

Sell 18.97

None

USD at CIB

Buy 18.91

Sell 18.97

None

Interest rates CBE

11.25% deposit

12.25% lending

Up

Tadawul

12,155

+0.9% (YTD: +7.7%)

Up

ADX

9,663

+1.0% (YTD: +13.8%)

Up

DFM

3,338

+1.1% (YTD: +4.4%)

Up

S&P 500

4,130

+1.4% (YTD: -13.3%)

Up

FTSE 100

7,423

+1.1% (YTD: +0.5%)

Up

Euro Stoxx 50

3,708

+1.5% (YTD: -13.7%)

Up

Brent crude

USD 103.97

+2.1%

Up

Natural gas (Nymex)

USD 8.23

+1.2%

Up

Gold

USD 1,781.80

+0.7%

Down

BTC

USD 23,622

-0.8% (YTD: -48.3%)

THE CLOSING BELL-

The EGX30 rose 0.9% at Thursday’s close on turnover of EGP 741 mn (9.7% below the 90-day average). Foreign investors were net sellers. The index is down 21.6% YTD.

In the green: Abu Dhabi Islamic Bank-Egypt (+4.3%), Egyptian Kuwaiti Holding-EGP (+4.2%) and Rameda (+3.8%).

In the red: Ibnsina Pharma (-1.7%), Credit Agricole Egypt (-1.5%) and Telecom Egypt (-1.3%).

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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