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Monday, 21 November 2022

Investors are rediscovering their appetite for the riskiest emerging-market debt

Investors are storming back into high-yield emerging-market debt, pushing down the risk premium over high-grade debt at the quickest rate since June 2005, according to JPMorgan data picked up by Bloomberg. Bonds issued by countries that only a few months ago were thought to be careering towards default are now being hoovered up by yield-hungry investors as markets price in easier financial conditions on the back of slowing US inflation. “Cheaper high-yield emerging-market bonds do look more attractive relative to investment grade,” one strategist told the news outlet. A bounce in commodity prices, especially in oil, could also “generate greater cash flow and lower the chance of any sovereign default in the near term,” he said.

A eurozone recession might not be as bad as originally feared, according to some economists who are now revising earlier predictions due to mild weather, lower energy prices, and large amounts of fiscal support, the Financial Times reports. A number of analysts, including at Goldman Sachs and Berenberg Bank, now expect the euro area to suffer a shallower recession. “Recession in the eurozone is not likely to be as deep as had been feared,” said Susannah Streeter of asset manager Hargreaves Lansdown. “The bloc is set to avoid a full-blown energy crisis this winter.”

FTX latest: The bankrupt cryptocurrency exchange owes its 50 biggest creditors USD 3.1 bn, according to new court filings. The company’s liabilities are thought to be in excess of USD 10 bn and may have as many as 1 mn creditors. (Reuters | Financial Times)

Up

EGX30

12,524

+0.1% (YTD: +4.8%)

Up

USD (CBE)

Buy 24.46

Sell 24.54

None

USD at CIB

Buy 24.46

Sell 24.52

None

Interest rates CBE

13.25% deposit

14.25% lending

Down

Tadawul

11,053

-0.9% (YTD: -2.0%)

Up

ADX

10,466

+0.4% (YTD: +23.3%)

Up

DFM

3,352

+0.6% (YTD: +4.9%)

Up

S&P 500

3,965

+0.5% (YTD: -16.8%)

Up

FTSE 100

7,386

+0.5% (YTD: 0.0%)

Up

Euro Stoxx 50

3,924

+1.2% (YTD: -8.7%)

Down

Brent crude

USD 87.62

-2.4%

Down

Natural gas (Nymex)

USD 6.30

-1.0%

Down

Gold

USD 1,769.00

-0.5%

Down

BTC

USD 16,249

-2.7% (YTD: -64.3%)

THE CLOSING BELL-

The EGX30 rose 0.1% at yesterday’s close on turnover of EGP 1.44 bn (18.3% above the 90-day average). Regional investors were net sellers. The index is up 4.8% YTD.

In the green: Mopco (+3.6%), Elsewedy Electric (+2.7%) and Credit Agricole Egypt (+2.5%).

In the red: Cleopatra Hospitals (-4.1%), e-Finance (-2.4%) and Telecom Egypt (-2.4%).

Major Asian benchmarks are in the red this morning, and futures suggest both shares across Western Europe (with the exception of France) and on Wall Street will follow suit later 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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