Covered bond bonanza:Banks sold a record EUR 175 bn of mortgage-backed debt — AKA covered bonds — in 1H 2023, the Financial Times writes citing S&P Global Ratings data. Lenders rushed to issue covered bonds as a cheap and safe form of fundraising amid global turmoil in the banking sector and rising rates on deposits.

Ultra-safe: Covered bonds are backed by a bank’s balance sheet assets — typically mortgages — making them particularly low-risk and low-yield, the FT explains. “Covered bonds are a very dull product but because they’re pretty safe they’re seen as a beacon of stability, a funding tool for banks made for rainy days,” said ABN Amro’s Joost Beaumont.

Good times coming for BTC investors? Standard Chartered is now expecting cryptocurrency BTC to reach USD 50k this year and USD 120k by the end of 2024 as the so-called crypto winter continues to thaw, according to a report picked up by Reuters. BTC is up more than 85% YTD to sit at around USD 30.7k — still down significantly from its peak of USD 69k in 2021. “Increased miner profitability per BTC mined means they can sell less while maintaining cash inflows, reducing net BTC supply and pushing BTC prices higher,” one of the bank’s analysts said in the report.

ALSO WORTH MENTIONING-

  • Grab your gold: A growing number of countries are transferring their gold reserves back home to safeguard them against the sort of sanctions imposed on Moscow by the West, which last year froze almost half of Russia’s gold and forex reserves. (Reuters | Invesco, pdf)
  • Big US banks are in for hefty loan losses: The six biggest banks in the US are expected to have written off some USD 5 bn in loans in 2Q 2023 — the largest loan losses since the pandemic — as rising interest rates hinder borrowers’ ability to repay. (Financial Times)
  • Iraq and TotalEnergies sign multi-bn energy deal: Iraq and French oil giant TotalEnergies yesterday signed off on the long-postponed USD 27 bn Gas Growth Integrated Project (Reuters)
  • BitOasis under review: Dubai’s Virtual Assets Regulatory Authority has put Middle East-focused crypto platform BitOasis under review for not meeting conditions. (Bloomberg)

EGX30

16,963

+2.5% (YTD: +16.2%)

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

11,587

-0.2% (YTD: +10.6%)

ADX

9,585

-0.2% (YTD: -6.1%)

DFM

3,977

+0.4% (YTD: +19.2%)

S&P 500

4,410

+0.2% (YTD: +14.9%)

FTSE 100

7,274

+0.2% (YTD: -2.4%)

Euro Stoxx 50

4,257

+0.5% (YTD: +12.2%)

Brent crude

USD 72.99

-1.2%

Natural gas (Nymex)

USD 2.67

+3.4%

Gold

USD 1,931

-0.1%

BTC

USD 30,683

+1.6% (YTD: +85.6%)

THE CLOSING BELL-

The EGX30 rose 2.5% at yesterday’s close on turnover of EGP 1.57 bn (about 31% below the trailing 90-day average). Local investors were net buyers. The index is up 16.2% YTD.

In the green: Mopco (+20.0%), Ezz Steel (+8.3%) and Qalaa Holdings (+7.8%).

In the red: Credit Agricole (-2.7%), Eastern Company (-2.4%) and Taaleem Management Services (-0.3%).

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