Weekly Market Review. 28 th June th July 2015

Transcription

1 Weekly Market Review 28 th June th July 2015

2 CONTENTS International Equity Markets GCC Equity Currencies Commodities Interest Rates Equity Markets - Top Most & Bottom Most Commodity Markets - Top Most & Bottom Most

3 INTERNATIONAL EQUITY MARKETS US non-farm payrolls rose 223,000 in Jun vs. 254,000 increase in May, tempering down rate hike expectations New orders for factory goods fell more than forecasts by 1% in May after a revised 0.7% decline in Apr Markit final manufacturing PMI slipped to 53.6 in Jun from 54 in May as manufacturing growth eased US pre-owned home sales rose 10.4% YoY in May, providing further boost to housing market Conference Board s consumer confidence index jumped to in Jun from 94.6 in May Markit/JP Morgan s Global manufacturing PMI slid to 51 in Jun from 51.3 in May, matching near 2-year low in Apr Euro zone businesses shrug off Greek fears as Markit s final composite PMI for Jun climbed to 54.2 vs in May Consumer prices growth softened to 0.2% YoY in Jun vs. rising 0.3% in May as energy costs weakened Markit s German Jun manufacturing PMI gained to 51.9 from 51.1 in May, indicating manufacturing gained traction UK 1Q2015 GDP gained 0.4% vs. 0.3% increase estimated earlier, led by consumer spending & business investment Greece shut its banks and imposed a daily limit on ATM withdrawals as it missed a $1.7bn IMF payment on Jun 30 Moody s downgraded Greece to 'Caa3' from 'Caa2 on IMF loan default, following Fitch and S&P Japan May industrial output slid 2.2% MoM as compared to 1.2% increased recorded in Apr, denting recovery Markit/Nikkei Services PMI rose to 51.8 in Jun vs in May, indicating strengthening domestic demand China s official PMI stood unchanged in Jun from May at 50.2, indicating factory activity remained sluggish HSBC/Markit services PMI for Jun fell to 51.8 from 53.5 in May, suggesting economy still needs support The World Bank cleared a $650mn loan for Indian freight rail corridor spanning 1,840 kilometers Fitch affirmed Russia s investment-grade rating of BBB- while maintaining its negative outlook for the nation Fitch Ratings maintained Malaysia s credit ranking at A-. Outlook was revised to stable from negative The UAE became a founding member of China-led Asia Infrastructure Investment Bank, joining 57 other nations Moody's cut Puerto Rico's bonds to 'Caa3' from 'Caa2, citing commonwealth s statement that it cannot pay its debt Last Close Change 5 Day % YTD % S&P 500 2, DJI 17, Nasdaq Comp 5, Euro Stoxx FTSE 100 6, Dax 11, CAC 40 4, Nikkei , Hang Seng 26, Brazil - Bovespa 52, , Russia - Micex 1, BSE Sensex 28, Shanghai Comp 3, S&P year performance Euro Stoxx year performance

4 GCC EQUITIES Abu Dhabi Islamic Bank s shareholders approved to increase issued share capital by AED168mn through rights issue Abu Dhabi Nat. Energy Co. denied news that it is engaged in merger talks with any state-owned or other entity Emaar Properties Egyptian subsidiary will list on Jul 5, It raised $298.8mn from its IPO recently Drake & Scull International raised the shareholding limit for GCC national to 100% from 49% Etihad Airways and Pakistan Int. Airlines signed codeshare agreement, providing enhanced connections to travelers Nestle will invest $118.9mn to build a coffee and culinary product factory in Dubai, employing 400 staff UAE-based Gulf Petrochem Group acquired Essar Petroleum East Africa to enhance group s services and products Dubai s Limitless said it would repay AED2.07bn to creditors and won approval to extend remaining debt to Dec 18 Trading house Trafigura sold 50% of its stake in 3 Spanish copper and zinc mines to Mubadala as a part of JV Yanbu Cement Company s 2Q2015 net profit edged-up 2.1% YoY to SAR246mn. Operating profit grew 9.2% YoY Abdullah A.M. Al-Khodari received letter of award for 2 projects worth SAR147.3mn from the Ministry of Transport National Shipping Co. of Saudi signed contract with Hyundai Samho to build additional 5 very large crude carriers Meezan Bank signed an agreement to acquire Pakistan operations of HSBC Bank Oman in 2H2015 Oman National Inv. Corp. and Oman International Dev. & Inv. shareholders approved the merger between the two Oman s National Aluminium Products said its plan to double current capacity of 18,000 tons/year is on track Bank Dhofar signed non-binding MoU with Bank Sohar on proposed merger, agreed to proceed with due diligence Qatar Islamic Bank raised QAR2bn Basel III compliant Sukuk to enhance capital adequacy & support future growth Doha Bank issued Tier I capital instruments amounting to QAR2bn on Jun 30, 2015 Qatar s Al Meera Consumer Goods two subsidiaries will together sell a 49% stake in Al Oumara Bakery for QAR3mn Qatar National Bank and Bahrain's Arab Bank Corp. reportedly mull buying minority stake in Turkish Finansbank Bahrain s Global Inv. House signed agreement to manage $40mn portfolio of non-core assets for a Kuwaiti bank Last Close Change 5 Day % YTD % Dubai 4, Abu Dhabi 4, Saudi Tadawul 9, Qatar Index 12, Kuwait Index 6, Oman MSM 30 6, Bahrain All Share 1, Egypt EGX 30 8, Istanbul 100 Index 81, , DFMGI 1 year performance Saudi Tadawul 1 year performance

5 CURRENCIES The US dollar strengthened versus 13 of its 16 major peers in the week, with Bloomberg Dollar Spot Index up 0.6% to 1, as Greece holds a vote on Jul 5 that may go a long way to determine if the nation stays in the euro area British pound weakened 0.65% in the week to pence per euro as a survey showed Greece s voters were split before a referendum Sunday on whether to accept the terms of a European financial bailout Japanese yen appreciated 0.86% in the week to per US dollar as investors sought out haven assets against the backdrop of Greece's deepening debt crisis China s yuan gained 0.06% in the week against US dollar, registering biggest weekly gain since May as the People s Bank of China s Governor said the liberalization of financial markets will be accelerated Australian dollar declined 1.7% against US dollar in the week on signs of sluggish consumer spending and after iron ore prices slid the most in two months. Retail sales rose 0.3% MoM in May, below estimate of 0.5% growth Brazil s real depreciated 0.16% in the week to per US dollar after the central bank said it would ease its support even as inflation accelerates Last Close Change 5 Day % YTD % EUR/USD GBP/USD AUD/USD USD/JPY USD/CHF USD/CAD USD/BRl USD/RUB USD/INR USD/CNY DXY Index New Zealand s dollar fell 2.3% in the week to per US dollar after a slide in milk prices increased speculation New Zealand s central bank will cut interest rates EUR/USD 1 year performance GBP/USD 1 year performance

6 COMMODITIES Spot gold price declined 0.6% in the week as the outlook for higher US interest rates in 2015 outweighed demand for a haven spurred by Greece s debt crisis Brent and West Texas Intermediate (WTI) recorded their worst week since March, dropping 4.7% and 6.9% as news and data pointed to a persistent oil market oversupply. Reports showed US crude stockpiles rose last week for the first time in 9 weeks while the number of rigs drilling for oil in the US rose for the first time in 7 months LME tin futures tumbled 3.7% in the week as Indonesian exports of refined tin rose unexpectedly in Jun, despite the majority of producers signing up to an agreement to maintain a 4,000-ton ceiling on monthly exports Corn futures on Chicago Board of Trade (CBoT) jumped 9.0% in the week as the USDA lowered 2015 US corn acreage to mn versus the March Prospective Plantings estimate of mn Last Close Change 5 Day % YTD % Gold spot 1, Silver spot Copper-CMX Brent - ICE WTI - Nymex S&P GSCI Spot Index Baltic Dry Index ICE coffee futures fell 4.6% in the week as a consensus for Brazilian production at the higher end of recent forecasts kept Arabica coffee prices under pressure Copper futures lost 1.0% in the week on worries about the fallout from Greece. Prices of copper, used in power and construction, are expected to come under pressure in coming weeks from a seasonal lull in Chinese demand WTI Crude 1 year performance GOLD 1 year performance

7 INTEREST RATES US bond prices strengthened in the week and 10 year yield dipped 9.0 bps to 2.38% as the latest US jobs report reaffirmed investors' belief that the Federal Reserve would be patient in raising interest rates Euro zone government bond yields rose on Greek anxiety after a defiant Greek Prime Minister Alexis Tsipras urged voters to reject a bailout deal in Sunday's referendum, cooling hopes of a breakthrough. Spanish and Italian 10-year bond yields rose 10 bps each in the week to 2.21% and 2.25%, respectively UK government bonds recorded their biggest weekly gain since March, sending 10 year yield down 19 bps to 2.0% as Greek turmoil propelled safe-haven buying Sweden's central bank cut its benchmark interest rate to -0.35% in a surprise move on Jul 2 and expanded its asset purchase program in a bid to reinforce tentative signs that long-stagnant consumer prices are finally picking up China s central bank reduced its benchmark lending rate, effective Jun 28, for a 3 rd time in 2015 by 25 bps to 4.85% and lowered reserve-requirement ratios for some lenders after stocks plunged and local government bond sales drained liquidity Last Close Change 5 Day % YTD % USD-1w Libor USD-3m Libor USD-6m Libor USD-10yr AED-1m EIBOR AED-3m EIBOR AED-12m EIBOR UK-10yr Japan-10yr Bank of Angola raised its benchmark interest rate on Jun 30 for a 2 nd time in 2015 by 50 bps to 9.75% after the currency was devalued, stoking inflation US 10 year Generic Yield 1 year performance UK 10 year Generic Yield 1 year performance

8 EQUITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Country Weekly Change Weekly Change (USD Adj.) 1 Vietnam 5.96% 6.13% 2 Pakistan 4.64% 4.75% 3 New Zealand 1.91% -0.55% 4 Malaysia 1.39% 1.08% 5 Indonesia 1.22% 1.13% 6 Venezuela 1.16% 1.16% 7 India 1.01% 1.33% 8 Botswana 0.77% 0.28% 9 Argentina 0.70% 0.45% 10 South Korea 0.68% 0.09% Ref Country YTD Change YTD Change (USD Adj.) 1 Venezuela % % 2 Argentina 37.15% 27.57% 3 Hungary 31.50% 21.50% 4 Jamaica 28.38% 25.70% 5 Denmark 28.24% 17.58% 6 Malta 23.32% 13.29% 7 Ireland 19.31% 9.61% 8 Italy 18.39% 8.76% 9 Japan 17.70% 14.82% 10 Slovakia 16.45% 6.98% Ref Country Weekly Change Weekly Change (USD Adj.) 1 China % % 2 Kazakhstan -5.81% -5.81% 3 Italy -5.43% -5.88% 4 Spain -5.21% -5.66% 5 France -4.96% -5.41% 6 Luxembourg -4.91% -5.36% 7 Finland -4.40% -4.85% 8 Portugal -4.38% -4.83% 9 Netherlands -4.11% -4.57% 10 Mongolia -4.04% -4.97% Ref Country YTD Change YTD Change (USD Adj.) 1 Colombia % % 2 Peru % % 3 Cyprus % % 4 Bulgaria -7.90% % 5 Slovenia -7.60% % 6 Egypt -6.85% % 7 Nigeria -6.11% % 8 Kuwait -5.41% -8.43% 9 Bahrain -5.34% -5.35% 10 Kazakhstan -5.33% -7.29%

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Corn 9.03% 2 Sugar 5.40% 3 Bean Meal 4.72% 4 Lean Hogs 4.41% 5 Soybeans 4.32% 6 Rough Rice 4.22% 7 Wheat 4.18% 8 Ethanol 3.10% 9 Live Cattle 1.90% 10 Natural Gas 1.84% Ref Commodity YTD Pct Change 1 Gasoline 39.41% 2 Cocoa 13.20% 3 Cotton 10.10% 4 Gasoil 8.35% 5 Corn 5.73% 6 Rubber 4.73% 7 Soybean Oil 4.35% 8 Soybeans 2.55% 9 Ethanol 0.06% 10 Ref Commodity Weekly Change 1 WTI Crude -6.89% 2 Steel Rebar -5.65% 3 Brent Crude -4.65% 4 Coffee -4.63% 5 Tin -3.66% 6 Nickel -3.61% 7 Heat Oil -3.41% 8 Gasoil -3.31% 9 Orange Juice -2.58% 10 Gasoline -2.32% Ref Commodity YTD Pct Change 1 Steel Rebar % 2 Tin % 3 Coffee % 4 Nickel % 5 Orange Juice % 6 Sugar % 7 Palladium % 8 Natural Gas % 9 Lumber % 10 Platinum %

10 IMPORTANT NOTICE This report was prepared by the Private Banking Unit of Mashreqbank psc ( Mashreq ) in the United Arab Emirates ( U.A.E. ). Mashreq is regulated by the Central Bank of the U.A.E. This report is provided for informational purposes and private circulation only and should not be construed as an offer to sell or a solicitation to buy any security or any other financial instrument or adopt any hedging, trading or investment strategy. Prior to investing in any product, we recommend that you consult with a professional financial advisor, taking into consideration investment objectives, financial circumstances and tax implication. While based on information believed to be reliable, we do not guarantee and make no express or implied representation as to the accuracy of this report or complete description of the securities markets or developments referred to in this report. The information, opinions, forecasts (if any), assumptions or estimates contained in this report are as of the date indicated and are subject to change at any time without prior notice. The stated price of any securities mentioned in this report is as of the date indicated and is not a representation that any transaction can be effected at this price. The risks related to investment products described in this report are not all encompassing and investors should refer to the relevant investment offer document for detailed information and applicable terms and conditions. Investment products, including treasury products, are not guaranteed by Mashreq or any of its affiliates or subsidiaries unless stated otherwise and are subject to investment risk, including loss of principal. Investment products are not government insured. Past performance is not an indicator of future performance. US persons (US Citizens; US Green Card Holders; Resident Aliens subject to US income taxes for IRS purposes) are not eligible for any of the investment products introduced by Mashreq unless stated otherwise. This report is for distribution only under such circumstances as may be permitted by applicable law. Neither Mashreq nor its officers, directors or shareholders or other persons shall be liable for any direct, indirect, incidental or other damages including loss of profits arising in any way from the information contained in this report. This report is intended solely for the use by the intended recipients and the contents shall not be reproduced, redistributed or copied in whole or in part for any purpose without Mashreq s prior express consent.