We are approaching the last mile of a turbulent year. Global markets are reeling because of two major events, namely the close U.S. presidential and recent coronavirus-induced lockdown measures. S&P 500 ended October in the red for the second month in a row (down 2.8%), while EGX 30 followed in its footsteps (down 4.3%). Meanwhile, MSCI EM index advanced 2.0%. The U.S. presidential elections are scheduled for Tuesday, 3 November, the results of which could be highly contested. Further lockdown measures taken by major European countries, like Germany, France, and the United Kingdom, are casting doubts on the overall global economic performance. On one hand, we started seeing U.S. 10-year Treasury bond yields rise on higher-than-expected U.S. borrowings in the case of a Biden win, coinciding with the U.S. dollar index hovering above 90s.
Meanwhile, news of cooperation between Egypt and Iraq on the reconstruction of the latter might open the door for EGX-listed contractors and infrastructure plays, including Orascom Construction [ORAS] and Elsewedy Electric [SWDY]. Elsewhere, we continue to monitor potential acquisitions in Egypt’s banking sector, with revived interest from UAE-based First Abu Dhabi Bank (FAB) in Bank Audi’s Egypt unit. We note that Lebanon-based BLOM Bank’s Egypt unit is also the subject of a potential acquisition by Emirates NBD and Bank ABC.