Global debt is back on the rise: Global debt rose USD 8.3 tn during 1Q 2023 to USD 305 tn, according to Institute of International Finance data picked by Reuters. This is the second-highest amount of global debt ever recorded and is USD 45 tn higher than its pre-pandemic levels “and is expected to continue increasing rapidly,” the report said, pointing to rising defense spending and healthcare costs associated with aging populations.

EM debt crossed the USD 100 tn mark for the first time during the quarter, with China, Mexico, Brazil, India, and Turkey recording the most significant increases.

EM local-currency bonds pick up steam against their USD counterparts: Investors have poured USD 5.23 bn in local currency EM bond funds in the first four months of the year, buoyed by high interest rates and falling inflation in EMs, the Financial Times reports, citing data provider EPFR Global. By contrast, funds holding EM bonds denominated in hard currencies have seen net outflows of USD 2.65 bn.

Strengthening the case for local-currency bonds: Expectations that the US Federal Reserve will hold off on raising interest rates next month. “The view being that with the Fed on pause, that should lower interest rate volatility and create some room for investors to earn the risk premium on offer in specific higher-yielding emerging market foreign exchange,” Goldman Sachs analyst Kamakshya Trivedi told the salmon-colored paper.

Also worth noting this morning:

  • Aldar closes maiden green sukuk: UAE-based Aldar Investment Properties raised USD 500 mn in its inaugural green sukuk issuance last week, the first of a USD 2 bn program. The issuance was 4x oversubscribed, attracting an order book from local, regional, and international investors of over USD 2.3 bn, closing the final yield at 4.875%. (Aldar statement, pdf)
  • Bank Dhofar hasn’t given up on Ahli Bank: Bank Dhofar has submitted an improved offer for Ahli Bank in response to a rival bid from Omnivest — a consortium led by Oman International Development and Investment Co. — valuing the bank at around USD 938 mn. Ahli Bank rejected Bank Dhofar’s first merger proposal last month. (Bloomberg)
  • UBS stands to lose big — and gain bigger — from its buyout of Credit Suisse: UBS is projecting losses of up to USD 28.3 bn on the back of its takeover of the struggling Swiss lender, but expects to offset the losses through a USD 17.1 bn writedown of some of Credit Suisse’s bonds as well as a one-time, USD 34.8 bn gain from acquiring the bank at a heavy discount. (Presentation, pdf | Reuters)
  • Russia says falling oil revenues “a problem” amid sanctions: Russian oil revenues plummeted by over 50% to RUB 2.2 tn (USD 27.3 bn) in the first four months of 2023. (Financial Times)
  • Eurozone inflation inched up in April: Price growth in the eurozone edged up to 7.0% in April from 6.9% a month earlier, as rising services and energy prices offset cooling food costs. (Eurostat, pdf) | Reuters)

EGX30

16,746

-0.6% (YTD: +14.7%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

18.25% deposit

19.25% lending

Tadawul

11,344

+0.6% (YTD: +8.3%)

ADX

9,479

-0.3% (YTD: -7.2%)

DFM

3,545

-0.3% (YTD: +6.3%)

S&P 500

4,192

-0.1% (YTD: +9.2%)

FTSE 100

7,757

+0.2% (YTD: +4.1%)

Euro Stoxx 50

4,395

+0.6% (YTD: +15.9%)

Brent crude

USD 75.58

-0.4%

Natural gas (Nymex)

USD 2.59

-0.3%

Gold

USD 2,000.30

+1.1%

BTC

USD 27,008

+0.8% (YTD: +63.8%)

THE CLOSING BELL-

The EGX30 fell 0.6% at Thursday’s close on turnover of EGP 1.8 bn. Local investors were net sellers. The index is up 14.7% YTD.

In the green: Ibnsina Pharma (+5.3%), Eastern Company (+3.3%) and Egypt Kuwait Holding – EGP (+3.1%).

In the red: CIB (-2.7%), Elsewedy Electric (-2.0%) and Mopco (-1.6%).

Tags: