Is a drop in business investment across OECD nations signaling a threat for global growth? The Organization for Economic Cooperation and Development released a study looking into Understanding the Weakness in Business Investment (pdf) through a cross-country analysis, revealing that a weak investment trend across the 38 member nations of the OECD is contributing to weak global productivity growth.

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After the global financial crisis of 2008, fixed investment fell sharply across many countries, especially those of the more developed OECD nations, with the ensuing recovery proving relatively modest, the report explains. Real business investment remains 23% below its pre-crisis trend, with only Israel and Portugal, out of 34 advanced economies the OECD tracked, having recovered and surpassed their pre-financial crisis net investment trajectories.

Insufficient aggregate demand and increased economic uncertainty appear to be the leading factors behind this shortfall, while more structural factors — most importantly the rising importance of intangible assets — are also linked to this lack of recovery, the OECD study explains. The recovery of the business investment environment was further muted by the COVID-19 pandemic. Shifts in corporate strategies — such as greater financialisation and prioritizing shareholder returns over capital expenditures — have also been linked to falling investment levels, the study shows. Meanwhile, the unpredictable rollout of Trump’s tariffs has further discouraged corporations from committing to significant spending plans.

How is this impacting global growth? If corporate spending on new projects and facilities does not pick up, countries will “not be able to sustain growth,” outgoing chief economist at OECD Álvaro Pereira told the Financial Times.

While no Arab nation is a member of the OECD, a drop in business investment still affects the region given the trade pacts and investment agreements between the two sides, so much of the OECD’s conclusions may impact us as well.

The OECD’s survey recommends a comprehensive set of policies to address the weakness in business investment. Key priorities include “reducing uncertainty through transparent, rules-based trade, tax, and regulatory frameworks, and tackling structural barriers to investment by enhancing competition, reducing regulatory burdens, addressing skills shortages and alleviating financing constraints” the organization said.

MARKETS THIS MORNING-

Asian markets are in the green in early trading this morning — Japan’s Nikkei is leading the gains, up 0.9%. The Shanghai Composite, Hang Seng, and the Kospi also started off the day higher.

EGX30

35,480

+0.6% (YTD: +19.3%)

USD (CBE)

Buy 48.39

Sell 48.52

USD (CIB)

Buy 48.40

Sell 48.50

Interest rates (CBE)

24.00% deposit

25.00% lending

Tadawul

10,947

+0.2% (YTD: -9.1%)

ADX

10,330

0.0% (YTD: +9.7%)

DFM

6,156

-0.2% (YTD: +19.3%)

S&P 500

6,345

+0.7% (YTD: +7.9%)

FTSE 100

9,164

+0.2% (YTD: +12.1%)

Euro Stoxx 50

5,263

+0.3% (YTD: +7.5%)

Brent crude

USD 66.89

-1.1%

Natural gas (Nymex)

USD 3.09

+0.4%

Gold

USD 3,433

0.0%

BTC

USD 115,024

+0.8% (YTD: +22.9%)

S&P Egypt Sovereign Bond Index

883.81

-0.1% (YTD: +13.7%)

S&P MENA Bond & Sukuk

147.82

+0.2% (YTD: +5.6%)

VIX (Volatility Index)

16.77

-6.1% (YTD: -3.3%)

THE CLOSING BELL-

The EGX30 rose 0.6% at yesterday’s close on turnover of EGP 5.2 bn (1.7% above the 90-day average). Local investors were the sole net buyers. The index is up 19.3% YTD.

In the green: Telecom Egypt (+4.8%), Raya Holding (+2.2%), and Fawry (+2.0%).

In the red: Misr Cement (-9.5%), Beltone Holding (-3.4%), and GB Corp (-2.4%).

CORPORATE ACTIONS-

Orascom Construction will pay out a dividend of EGP 12.23 per share for its 1Q 2025 earnings, according to an EGX disclosure (pdf). The payout is scheduled for 13 August.

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