Chinese demand pushes gold to record highs: China extended its lead over India asthe world’s biggest buyer of gold bars, coins, and jewelry. Chinese demand for gold and bar coin investments surged 27% over the past year and demand for gold jewelry rose 10% in the same period. Demand from China pushed the precious metal to a record-breaking USD 2.4k an ounce this year, Bloomberg reports.

China’s demand for the safe-haven asset stands to grow even further as a weakening local currency and ongoing property crisis pushes investors towards the precious metal, Precious Metals Insights Managing Director Philip Klapwijk told Bloomberg. “The weight of money available under these circumstances for an asset like gold — and actually for new buyers to come in — is pretty considerable … There isn’t much alternative in China. With exchange controls and capital controls, you can’t just look at other markets to put your money into,” he added.

Sounds familiar? Egyptians heavily brought gold as a safe haven asset until earlier this year as a way to hedge against a weakening EGP. The precious metal soared to record highs in the local market before cooling off after the Central Bank of Egypt floating the EGP appeared to restore confidence in the local currency.

The view from the trading floor: Gold (Comex) is up around 20% YTD and was trading at just over USD 2.4k last night in after hours trading.

THE MARKETS THIS MORNING-

Asian markets are rebounding from Friday’s sell-off, with the Hong Kong’s Hang Seng leading the gainers, up nearly 2.3% in early trading. That’s raising hope that positive sentiment (or perhaps a bit of wishful thinking?) could see the Nasdaq (down 5.5% last week) and S&P (down >3% last week) snap their six-day losing streaks.

In context: The two big US benchmarks were dragged down last week by a tech selloff.

What to watch for this week: 1Q 2024 results announcements from Alphabet, Meta, and Microsoft.

Right now: US and European equities futures were up slightly in overnight trading.

EGX30

28,623

+1.0% (YTD: +15.0%)

USD (CBE)

Buy 48.32

Sell 48.45

USD (CIB)

Buy 48.32

Sell 48.42

Interest rates CBE

27.25% deposit

28.25% lending

Tadawul

12,518

+0.1% (YTD: +4.6%)

ADX

9,126

-0.6% (YTD: -4.7%)

DFM

4,175

-0.8% (YTD: +2.8%)

S&P 500

4,967

-0.9% (YTD: +4.1%)

FTSE 100

7,896

+0.2% (YTD: +3.6%)

Euro Stoxx 50

4,918

-0.4% (YTD: +8.8%)

Brent crude

USD 87.00

-0.3%

Natural gas (Nymex)

USD 1.75

-0.1%

Gold

USD 2,401.50

-0.5%

BTC

USD 64,628.50

-0.1% (YTD: +53.3%)

THE CLOSING BELL-

The EGX30 rose 1.0% at yesterday’s close on turnover of EGP 2.9 bn (42% below the 90-day average). Regional investors were net buyers. The index is up 15.0% YTD.

In the green: Qalaa Holdings (+8.2%), Ezz steel (+6.1%) and Fawry (+3.5%).

In the red: Telecom Egypt (-1.9%), Talaat Moustafa Group (-1.4%) and Eipico (-0.6%).

CORPORATE ACTIONS-

Elsewedy Electric will pay out a dividend of EGP 0.50 per share on its 2023 earnings, the company said in an EGX disclosure (pdf).

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