No let up for emerging economies this year - Moody’s: Rating agency Moody’s expects growth to slow “in most emerging markets this year” as economic headwinds emanating from the US continue to spill over into the global economy, according to a report picked up by Reuters. Rising US interest rates, instability in the financial sector and expectations for a shallow recession later in the year will prolong weak credit conditions among EMs, which are struggling with higher borrowing costs and difficulties accessing the international capital markets, it said.

EMs are in hot water: Five emerging economies have already slipped into default, while 11 others are approaching it with their USD debt trading at “distressed levels” — including Egypt, which has had its credit rating downgraded by Moody’s and Fitch.

Could New York lawmakers hold the key to easing EM debt stress? Several bills that would make it easier for countries to restructure debts with private bondholders are currently being discussed in the New York Senate, potentially giving indebted countries breathing room should lawmakers vote them through in a few weeks time, Bloomberg writes. The bills would restrict how much investors can recoup when countries restructure their debt, a move which should make it easier for nations to negotiate debt relief and lower legal costs.

Why this matters: Laws in the state of New York govern around half of all FX-denominated bonds issued by EM sovereigns.

ALSO WORTH NOTING-

  • Saudi reserves dip to decade low: Saudi Arabia’s net foreign assets dropped to SAR 1.54 tn (c. USD 410 bn) in April, the lowest level since 2010. (Central bank data, pdf | Bloomberg)
  • European gas prices have hit their lowest point since mid-2021 after falling for eight consecutive weeksthanks to higher imports of LNG, a milder winter season, and sluggish economic activity. (Bloomberg)

EGX30

17,131

+0.5% (YTD: +17.4%)

USD (CBE)

Buy 30.84

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

18.25% deposit

19.25% lending

Tadawul

11,138

-0.4% (YTD: +6.3%)

ADX

9,453

+0.6% (YTD: -7.4%)

DFM

3,541

+0.4% (YTD: +6.2%)

S&P 500

4,205

+1.3% (YTD: +9.5%)

FTSE 100

7,627

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Euro Stoxx 50

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Brent crude

USD 76.95

+0.9%

Natural gas (Nymex)

USD 2.42

-2.4%

Gold

USD 1,963.10

0.0%

BTC

USD 27,578

+3.0% (YTD: +66.9%)

THE CLOSING BELL-

The EGX30 rose 0.5% at yesterday’s close on turnover of EGP 1.89 bn. Regional investors were net buyers. The index is up 17.4% YTD.

In the green: Edita (+11.3%), Abu Dhabi Islamic Bank (+7.5%) and Ibnsina Pharma (+5.2%).

In the red: Taaleem (-5.0%), Abu Qir Fertilizers (-1.6%) and Ezz Steel (-1.4%).

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