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Thursday, 27 October 2022

Coming recession could be short and shallow, say economists

The global economy could be heading into a recession — but it might not be so bad: Economists polled by Reuters see the global economy growing at just a 2.3% clip next year as a recession becomes more certain amid spiraling inflation and volatility in global markets. Only six out of the 22 central banks polled expect to reach their inflation targets this year — raising concerns among economists that banks will continue to hike rates in a bid to tamp down on inflation. On the bright side, the poll showed the smallest gap between growth rates and unemployment in at least four decades, pointing to a common view among economists that the recession will not be too severe.

Wall Street has conflicting views on the outlook for EM equities: Morgan Stanley thinks emerging market equities have bottomed out and is forecasting an average 14% rise across global EM exchanges by next summer, the Financial Times reports. Goldman Sachs is more defensive, saying there’s no one “coherent” story across EMs. The benchmark MSCI index of EM stocks is down c.30% since early January, largely thanks to China’s economic downturn and the US Fed’s tightening cycle. A massive USD 2.1 tn has flown out of EM stocks this year, while bond funds have racked up USD 70 bn of outflows.

ALSO WORTH NOTING-

  • Gulf listings continue their hot streak: Saudi utility firm Marafiq has priced its IPO at the top end of the SAR 41-46 price range after receiving USD 53 bn in orders. (Bloomberg)
  • Saudi Aramco has launched a USD 1.5 bn sustainability fund, the largest fund of its kind in the world, CEO Amin Nasser said yesterday. (Enterprise Climate)
  • More companies bail on Russia: Mercedes-Benz and Zara owner Inditex are exiting the Russian market and plan to sell their subsidiaries to local investors. (Reuters | Bloomberg)

Up

EGX30

10,553

+0.8% (YTD: -11.7%)

Up

USD (CBE)

Buy 19.69

Sell 19.77

Up

USD at CIB

Buy 19.69

Sell 19.75

None

Interest rates CBE

11.25% deposit

12.25% lending

Down

Tadawul

11,799

-1.5% (YTD: +4.6%)

Up

ADX

10,088

+0.3% (YTD: +18.9%)

Down

DFM

3,346

-0.9% (YTD: +4.7%)

Down

S&P 500

3,831

-0.7% (YTD: -19.6%)

Up

FTSE 100

7,056

+0.6% (YTD: -4.5%)

Up

Euro Stoxx 50

3,605

+0.6% (YTD: -16.1%)

Up

Brent crude

USD 95.95

+0.3%

Up

Natural gas (Nymex)

USD 5.68

+1.4%

Up

Gold

USD 1,671.20

+0.1%

Up

BTC

USD 20,758

+3.1% (YTD: -54.8%)

THE CLOSING BELL-

The EGX30 rose 0.8% at yesterday’s close on turnover of EGP 1.25 bn (17.9% above the 90-day average). Regional investors were net sellers. The index is down 11.7% YTD.

In the green: Ezz Steel (+6.5%), Elsewedy Electric (+4.3%) and Heliopolis Housing and Development (+4.0%).

In the red: Alexandria Containers and Cargo Handling (-4.0%), Orascom Construction (-2.1%) and Mopco (-1.1%).

Asian markets are up across the board in early trading this morning. Futures suggest the major European markets are set to open in the red, while things are looking brighter over on Wall Street, with the three major indices likely to open in the green later on today.

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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