Today’s Trading Playbook
KEY THEMES
After a U.S. equities ended yesterday on a mixed note, European stock markets are expected to open higher today, rebounding after musical decline prior to U.S. inflation data, which will influence the Fed’s upcoming decision. Meanwhile, Asian shares rebounded from nearly 2-year lows in early Wednesday trading. Yields on the U.S. government 10-year bond are calming down a bit, below the 3.0% mark, where oil is recovering some of its losses seen this week.
Elsewhere, the EGX 30 continued to drop yesterday, completing a 2-day losing streak, slipping by 0.9%. Meanwhile, the index is down 2.1% so far in May. We note that May has not been historically good when it comes to EGX 30 performance. Since 2005, the EGX 30 has had a total of 17 May readings. Historically, the index's monthly performance averaged -1.4% in May over that period where it was negative 59% of the time (i.e. 10 times), averaging -6.9% and was positive 41% of the time (i.e. 7 times), averaging +6.4%. Globally, May is infamously known for being a bear month, with the adage of “Sell in May and go away”. But in Egypt, historical performance data for the EGX 30 does not depict a decisive advantage for bears over bulls in the fifth month of the year.
Now, on to the top news and analysis for the day.
Top News & Analysis
MACRO NEWS
Production inputs and raw materials will be exempted from the CBE instructions announced last February that had required importers to use letters of credit (LCs) (Egyptian Presidency, Economy Plus)
A consortium of European terminal logistics firms will invest USD500mn to build a new container terminal at Damietta Port. (Cabinet)
The European Bank for Reconstruction & Development (EBRD) downgraded its growth forecast for the nations in which the lender operates. (Enterprise)
Egypt is looking to borrow USD2.5bn from the World Bank in order to finance nine new projects. (Al-Borsa)
CORPORATE NEWS
The European Bank of Reconstruction & Development [ERBD], SPE Capital, Amethis acquired a 90% stake in Global Corp. (Al-Borsa, Enterprise)
EIPICO [PHAR] still had the lead in the Egyptian pharmaceutical market during Q1 2022, with sales volume of 53mn (+39% y/y) and a market share of 9%. PHAR topped the market with the highest revenue growth, recording sales of EGP847mn (+41% y/y). (Souq Aldawaa)