China ramps up bailout loans to debt-distressed countries: Beijing has been spending big on infrastructure development in low-income countries through its Belt and Road initiative – but a new studyshows that it’s also doling out huge amounts in bailout loans to the same nations, emerging as a lender of last resort to rival the IMF.

China issued a combined USD 240 bn worth of bailout loans to 22 distressed countries between 2000 and 2021 — with almost half of that between 2019 and 2021 — according to the study by AidData, a research lab based at the US College of William & Mary. The loans — which equal north of 20% of the IMF’s total lending over the past decade — have gone “almost exclusively” to low- and middle-income nations already heavily indebted to China through financing it handed out under the Belt and Road initiative.

Who has borrowed? Egypt, Oman, Turkey, Sudan, Argentina, Ecuador, Sri Lanka, and Pakistan, among others.

The West sees Chinese bailouts as a threat: Loans from Beiijing come with higher interest rates and less transparency than multilateral finance, the report reads, saying they’re a signal the global financial markets are becoming “more multipolar, less institutionalized, and less transparent.” The study triggered headlines critical of China’s lending at the Financial Times and the New York Times.

Also worth noting:

  • Bahrain records fastest economic growth in nine years, expanding at a 5% clip last year thanks to 6.2% growth in its non-oil sector. (Bahrain Finance Ministry,pdf | Bloomberg)
  • Alibaba’s shares soar on news of a major restructuring that could bring fresh listings: The US-listed shares of Chinese e-commerce giant Alibaba rose more than 14% after it announced that the company will be split into six units. Alibaba will seek to raise investment or list most of the six units, raising potentially lucrative IPO prospects in an overhaul that comes one day after company founder Jack Ma returned to China. (SEC filing | Reuters)
  • China made its first LNG purchase without the USD: A Chinese state oil company yesterday bought an LNG shipment from TotalEnergies using CNY for the first time, rather than USD. (Reuters)

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THE CLOSING BELL-

The EGX30 fell 0.3% at yesterday’s close on turnover of EGP 1.6 bn (21.4% below the 90-day average). Foreign investors were net sellers. The index is up 9.0% YTD.

In the green: Sidi Kerir Petrochemicals (+7.5%), Ezz Steel (+7.4%) and Elsewedy Electric (+6.5%).

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Asian markets are rallying as traders welcome news of Alibaba’s possible IPO bonanza, while futures suggests shares in Europe, the US and Canada will climb as markets open later today.

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