China’s capital markets are increasingly isolated: Declining global investor interest in China has pushed activity in the country’s equity capital markets to multi-decade lows, writes the Financial Times.

By the numbers: Mainland IPOs along with follow-on and convertible share offerings have brought in some USD 6.4 bn in the first four months of 2024, the lowest number ever recorded, while offshore fundraising stood at USD 1.6 bn for the period — the lowest in over two decades — and outbound M&A transactions came in at their lowest since 2005 at USD 2.5 bn.

Driving the slump: Mounting geopolitical Beijing-Washington tensions and shrinking levels of activity in China have seen international banks and firms avoid the country. On top of this, property developers — a former pillar of Asia’s high-yield bond market — have ceased international borrowing in the wake of a government crackdown on using debt to fund projects that unsettled their business models, writes the salmon-colored paper.

But on the plus side: China’s economy grew at a faster-than-anticipated rate of 5.3% y-o-y in 1Q 2024, according to data from China’s National Bureau of Statistics out yesterday. Chinese firms, banks, and government borrowers have also issued USD 26 bn of international debt this year, up from USD 24 bn the year before, while mainland borrowing is up 17% y-o-y to USD 246 bn.

MARKETS THIS MORNING-

Asian markets are trending mainly lower, with the Shanghai Composite (+0.7%) the only outlier at dispatch time. US and European stock futures are little changed, with most major benchmarks up very slightly overnight after the S&P 500 notched yesterday its third day of losses.

EGX30

29,401

-0.7% (YTD: +18.1%)

USD (CBE)

Buy 48.48

Sell 48.62

USD (CIB)

Buy 48.5

Sell 48.6

Interest rates CBE

27.25% deposit

28.25% lending

Tadawul

12,500

-1.6% (YTD: +4.5%)

ADX

9,194

-0.6% (YTD: -4.0%)

DFM

4,184

-1.4% (YTD: +3.1%)

S&P 500

5,051

-0.2% (YTD: +5.9%)

FTSE 100

7,820

-1.8% (YTD: +1.1%)

Euro Stoxx 50

4,916

-1.4% (YTD: +8.8%)

Brent crude

USD 90.02

-0.1%

Natural gas (Nymex)

USD 1.69

-2.7%

Gold

USD 2,399.80

-0.3%

BTC

USD 63,963.50

+1.2% (YTD: +51.4%)

THE CLOSING BELL-

The EGX30 fell 0.7% at yesterday’s close on turnover of EGP 4.5 bn (10.1% below the 90-day average). Local investors were net buyers. The index is up 18.1% YTD.

In the green: Ezz Steel (+5.0%), Oriental Weavers (+4.9%), and Egypt Kuwait Holding-EGP (+3.7%).

In the red: E-finance (-3.3%), Abu Qir Fertilizers (-2.6%), and Alexandria Containers and Cargo Handling (-2.6%).

CORPORATE ACTIONS-

FRA greenlights MM Group’s capital increase: MM Group for Industry and International Trade will raise its issued and paid-in capital by EGP 187.3 mn to EGP 936.6 mn after it received the greenlight from the Financial Regulatory Authority (FRA), the authority said in an EGX disclosure (pdf).

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