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Monday, 13 March 2023

Corporates in EM are having a hard time in the debt markets

EM corporate bonds struggle on high cost of debt: Emerging-market companies have sold only USD 60 bn worth of bonds since the beginning of the year — an 18% drop from the same period last year — as higher interest rates and high-profile troubles at EM firms including India’s Adani group and Brazil’s Americanas weigh on the market for a second straight year, Bloomberg reports. The total sales figure is the lowest to start any year since 2016, when the Federal Reserve last raised interest rates, according to the news outlet.

A sudden reversal: Investors poured record sums into EM assets earlier in the year amid growing optimism that the Fed was nearing the end of its tightening cycle. Fast forward a few weeks and the picture is looking a lot different: EM USD-denominated bonds fell 2.2% in February alone, almost wiping out all 2023 gains. In comparison, US high-yield debt is up 2.2% so far this year.

Bad news for junk-rated firms: The crunch will make it particularly difficult for EM companies with lower credit ratings to access finance, analysts told Bloomberg. “You’re seeing this bifurcation in the market where the companies that want to issue can’t because it’s too expensive, and the higher-rated ones that can issue don’t want to because they can afford to.wait,” one portfolio manager said.

Aramco ups dividends after posting record earnings in 2022: Saudi Aramco reported net income of USD 161.1 bn in 2022 — up 46% y-o-y and the most since the company listed in 2019, according to a company statement (pdf). The company said it would increase its fourth-quarter dividend to USD 19.5 bn, up 4% from the previous quarter, to be paid in the first quarter of 2023. Earnings were boosted by higher oil prices that saw companies across the oil and gas sector rake in windfalls last year and up payouts to investors.




-3.1% (YTD: +9.2%)



Buy 30.84

Sell 30.96



Buy 30.85

Sell 30.95


Interest rates CBE

16.25% deposit

17.25% lending




-0.8% (YTD: -0.9%)




-0.3% (YTD: -3.8%)




-0.7% (YTD: +1.5%)


S&P 500


-1.5% (YTD: +0.6%)


FTSE 100


-1.7% (YTD: +4.0%)


Euro Stoxx 50


-1.3% (YTD: +11.5%)


Brent crude

USD 82.78



Natural gas (Nymex)

USD 2.43




USD 1,867.20




USD 21,442

+4.6% (YTD: +29.5%)


The EGX30 fell 3.1% at yesterday’s close on turnover of EGP 1.8 bn (11% above the 90-day average). Local investors were net buyers. The index is up 9.2% YTD.

In the green: Egypt Kuwait Holding (+0.7%).

In the red: e-Finance (-7.8%), GB Auto (-7.7%) and Ezz Steel (-7.3%).

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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