KEY THEMES
Global markets are starting the week on a somewhat optimistic note over the situation with China Evergrande Group. Meanwhile, commodities, among other asset classes, are pulling back higher, with oil near its best levels since October 2018. Brent oil prices reached to USD78.64/bbl this morning on fears that global output disruptions will drain inventories. Also, a shortage of natural gas in Europe hiked costs across the continent.
The continued euphoria in oil prices as well as other commodities could threaten a more decisive hawkish stance by global central banks, refuting the assumption that global inflation could be transitory. This incidentally comes after the Fed's recent remarks, indicating that tapering is more imminent than before.
Here at home, the EGX 30 recovered a little bit from its recent slump, gaining in the last three consecutive sessions despite closing yesterday quite far off its intraday high. However, the three-day winning streak has seen thin trading activities on large cap stocks. Given the area in which the EGX 30 currently trades, the index's 2022e P/E is currently as low as 6.2x, implying an earnings yield of 16%, which looks cheap.