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Wednesday, 3 August 2022

EMs trade bonds for bank loans + BP, Uber report strong 2Q earnings growth

Emerging markets are turning to syndicated loans after being effectively shut out of bond markets due to heightened commodity prices and rising borrowing costs, the Wall Street Journal reports. More than a dozen governments in Africa and the Middle East took out syndicated loans worth about USD 13 bn during the first half of the year, according to a Standard Chartered analysis of Dealogic data, nearly double the figure in the same period last year.

Illustrating the tightening conditions: Not a single emerging-market government turned to the foreign-currency debt markets in July, according to Tellimer. This is “the most significant drought in financing since the ‘taper tantrum’ of 2013,” when rising US rates caused an exodus of capital from emerging markets, the WSJ writes.


EARNINGS WATCH-

#1- BP reported its highest earnings in 14 years in 2Q 2022. The oil supermajor increased dividends by 10% after net earnings tripled y-o-y to USD 8.5 bn during the quarter, according to its earnings (pdf) released yesterday. The growth was driven by strong refining margins and “exceptional” performance in its secretive oil trading business.

#2- Uber just became cashflow positive for the first time ever: The ride-hailing giant posted free cashflow of USD 382 mn in 2Q 2022 on the back of a post-pandemic rebound in travel and commuting, according to its earnings release. That’s more than triple the sum analysts had expected, the Financial Times writes. Uber shares jumped almost 19% on the news.

Up

EGX30

9,442

+0.2% (YTD: -21.0%)

Up

USD (CBE)

Buy 18.98

Sell 19.09

Up

USD at CIB

Buy 19.01

Sell 19.07

None

Interest rates CBE

11.25% deposit

12.25% lending

Down

Tadawul

12,311

-0.2% (YTD: +9.1%)

Up

ADX

9,895

+1.2% (YTD: +16.6%)

Down

DFM

3,348

-0.9% (YTD: +4.8%)

Down

S&P 500

4,091

-0.7% (YTD: -14.2%)

Down

FTSE 100

7,409

-0.1% (YTD: +0.3%)

Down

Euro Stoxx 50

3,685

-0.6% (YTD: -14.3%)

Down

Brent crude

USD 99.83

-0.2%

Down

Natural gas (Nymex)

USD 7.71

-7.0%

Up

Gold

USD 1,789.70

+0.1%

Up

BTC

USD 23,084

+0.4% (YTD: -50.2%)

THE CLOSING BELL-

The EGX30 rose 0.2% at today’s close on turnover of EGP 343,84 mn (57.7% below the 90-day average). Foreign investors were net sellers. The index is down 21% YTD.

In the green: QNB Alahli (+10.1%), Ibnsina Pharma (+7.1%) and Qalaa Holdings (+5.6%).

In the red: CIB (-2.1%), Cleopatra Hospitals (-1.9%) and Telecom Egypt (-1.3%).

Asian shares posted tentative gains this morning as “investors monitor Pelosi’s visit to Taiwan,” with only Australia’s ASX slipping into the red as of dispatch time. Major European benchmarks look set to come under selling pressure at the opening bell today, as will shares in Toronto. Futures suggest the Dow, S&P and Nasdaq should all open in the green later today.

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