EM bond rally lives on: Emerging market bonds are seeing significant gains and investors are wagering that there could be more to come, Bloombergwrites, as signs of reform in EMs that have long struggled with heavy debt burdens drive optimism. USD bonds from Zambia, Pakistan, and Sri Lanka have seen returns of 25% in the past month after the three countries saw progress on debt reform and restructuring — compared with 1.3% for a wider index of developing nation debt.

This could be good news for Egyptian sovereign debt: “Our preference has been the countries that have really avoided default and we think can continue to avoid default going forward,” UBS Asset Management's Shamaila Khan said, namechecking Egypt and Nigeria. Egypt’s sovereign USD bonds saw gains over the past week, riding the wave of gains in other EMs.

Turkey looks to drum up FDI from the Gulf: Turkey expects an upcoming visit by President Recep Tayyip Erdogan to Qatar, Saudi Arabia, and the UAE to result in USD 10 bn in direct investment, Reuters reports citing two senior Turkish officials. The countries could ultimately invest USD 30 bn in Turkey’s energy, infrastructure, and defense sectors over the longer term, they added. Erdogan’s visit, which is scheduled for 17-19 July, comes as he country continues to face economic challenges in the wake of his recent reelection and amid the rapprochement between Ankara and Cairo.

Saudi economy could contract if oil cuts continue: Saudi Arabia’s economy could see a 1% contraction if the kingdom chooses to stick with its current production cuts through to the end of 2023, according to Bloomberg Economics. Any contraction would mark a sharp change of fortunes for the KSA, which was the G20’s fastest growing economy in 2022, seeing nearly 9% growth. Saudi has so far only said it will extend production cuts through August.

EGX30

16,555

-3.2% (YTD: +13.4%)

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

11,609

+0.1% (YTD: +10.8%)

ADX

9,604

+0.0% (YTD: -5.9%)

DFM

3,962

+0.0% (YTD: +18.8%)

S&P 500

4,399

-0.3% (YTD: +14.6%)

FTSE 100

7,257

-0.3% (YTD: -2.6%)

Euro Stoxx 50

4,237

+0.3% (YTD: +11.7%)

Brent crude

USD 78.47

+2.6%

Natural gas (Nymex)

USD 2.58

-1.0%

Gold

USD 1,932.50

-0.9%

BTC

USD 30,209

+0.1% (YTD: +82.6%)

THE CLOSING BELL-

The EGX30 fell 3.2% at yesterday’s close on turnover of EGP 5.1 bn (119% above the trailing 90-day average). Foreign investors were net sellers. The index is up 13.4% YTD.

In the green: Juhayna (+3.7%) (setting aside Taqa Arabia…)

In the red: Mopco (-17.9%), Qalaa Holdings (-16.1%) and Ibnsina Pharma (-12.5%).

Asian markets are mostly up in early trading this morning and futures suggest European markets will also open in the green, while Wall Street is set for a more mixed open later on today.

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