KEY THEMES
Annual U.S. consumer price index rose 7%, the highest in almost 40 years. However, equity markets rose yesterday, as the high inflation levels matched the Fed’s expectations. U.S. equities rose mildly though, while Asian shares were mixed on Thursday. The impact of U.S. CPI figures appeared more notably on U.S. Treasuries yield, with the yield on U.S. 10-year Treasury near its highest levels since the beginning of 2020. On the other hand, oil prices continued to trend upward, as Brent oil prices inched over USD85/bbl.
Elsewhere, it seems like 2022 will be the year that witness the return of dividends payout for the banking sector. Yesterday, QNB Alahli’s [QNBA] BoD suggests dividends distribution of EGP1.30/share (i.e. dividend yield of 7.2%) pending shareholders’ approval. In addition, CIB’s [COMI] management has mentioned during Q3 2021 earnings call its intention to propose dividends distribution for 2020 and 2021 at once, pending shareholders’ and CBE approval. Many banks now have more than sufficient capital locked as a result of not paying dividends for the last two years, and higher Treasury exposure. We believe the return of dividends distribution will draw the market’s attention more prominently when compared to the last couple of years.