Emerging market borrowers issued a record USD 57.5 bn in bonds since the beginning of 2025, a 28.9% y-o-y increase from USD 44.6 bn during the same period last year, Reuters reported citing Morgan Stanley data. As borrowers rush to lock in proceeds before Trump takes charge, analysts warn that the growing appetite is at risk of a market shift.

By the numbers: Top issuers included Saudi Arabia, which sold bonds worth USD 12 bn last week, while Mexico recorded USD 8.5 bn and Chile recorded USD 3 bn in sales. Average premiums range between 0 and 10 basis points above US treasuries, with EUR-denominated bonds making a strong comeback. Sovereign borrowers, including Saudi and Indonesia, are mitigating higher yields by favoring shorter maturities over traditional 30-year bonds, the newswire said.

The drivers: This surge in borrowing is driven by fears of market volatility ahead of the second Donald Trump administration, uncertainty around the US Federal Reserve’s interest rate plans, and inflation concerns, Stefan Weiler, JPMorgan's head of CEEMEA debt capital markets, told Reuters. Emerging markets are also under pressure from USD 500 bn in short-term debt issued during covid, set to mature this year.

The trend is expected to continue: Borrowers are expected to issue another USD 30 bn in debt before 20 January, Weiler added. The trend could also continue well into 1H 2025, according to Matt Doherty, head of CEEMEA syndicate at BNP Paribas. “I wouldn't be surprised if you have another first half where we see the best part of USD 200 bn in issuance from CEEMEA,” Doherty told Reuters.

MARKETS THIS MORNING-

Asian markets are mixed in early trading, largely mirroring a mixed trading session for Wall Street yesterday that ended last night with tech stocks falling. Mainland China’s CSI 300 and the Hang Seng Index are each up 1.2% and Shanghai is similarly up 1.3%, while Japan’s Nikkei is firmly in the red so far this morning.

Futures indicate Wall Street is set to open in the green, suggesting the Dow Jones will continue rising after closing up 0.9% yesterday.

EGX30

28,556

-2.5% (YTD: -4.0%)

USD (CBE)

Buy 50.45

Sell 50.58

USD (CIB)

Buy 50.47

Sell 50.57

Interest rates (CBE)

27.25% deposit

28.25% lending

Tadawul

12,110

-0.1% (YTD: +0.6%)

ADX

9,459

-0.4% (YTD: +0.4%)

DFM

5,233

+0.1% (YTD: +1.4%)

S&P 500

5,836

+0.2% (YTD: -0.8%)

FTSE 100

8,224

-0.3% (YTD: +0.6%)

Euro Stoxx 50

4,954

-0.5% (YTD: +1.2%)

Brent crude

USD 80.90

+1.4%

Natural gas (Nymex)

USD 3.93

-1.4%

Gold

USD 2678.60

-1.3%

BTC

USD 94,307.70

-0.1% (YTD: +0.8%)

THE CLOSING BELL-

The EGX30 fell 2.5% at yesterday’s close on turnover of EGP 3.8 bn (0.4% below the 90-day average). Egyptian investors were the sole net buyers. The index is down 4.0% YTD.

In the green: Egyptian Kuwaiti Holding- EGP (+2.4%), Alexandria Containers and Cargo Handling (+2.4%), and Ezz Steel (+2.3%).

In the red: TMG Holding (-6.0%), EFG Holding (-5.1%), and Palm Hills Developments (-4.5%).

CORPORATE ACTIONS-

Ezz Steel has announced the fair value of its shares at EGP 138.15 based on a study conducted by financial advisor BDO Keys Financial Consulting, Ezz Steel said in an EGX disclosure (pdf).

Remember: The Financial Regulatory Authority gave its approval for Ezz Steel to begin procedures for delisting its shares from the EGX last month. Under the proposal, objecting shareholders can sell their shares back to the company at either the highest closing price during the month preceding the board of directors’ statement — EGP 118.98 per share — or the newly determined fair value of the company’s shares.

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