Weekly Market Review. November 1 st, 2015 November 7 th, 2015

Transcription

1 Weekly Market Review November 1 st, 2015 November 7 th,

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

3 INTERNATIONAL EQUITY MARKETS US jobs rose 271,000 in Oct and jobless rate fell to a 7-1/2 year low of 5.0%, raising bets Fed may raise rates in Dec New orders for US factory goods declined 1.0% in Sep after a downwardly revised 2.1% fall in Aug The Institute for Supply Management s manufacturing activity index slipped to 50.1 in Oct vs in Sep Markit s Eurozone final manufacturing PMI ticked up to 52.3 in Oct, marginally up from the initial reading of 52.0 Retail sales in Eurozone slipped for the first time in six months in Sep by 0.1%, but was up 2.9% YoY The ECB lowered Greek banks emergency funding cap by 0.9bn to 86.0bn, signaling an improving banking sector German industrial production unexpectedly dipped 1.1% MoM in Sep, hit by slowdown in emerging markets British manufacturing output rose 0.8% in Sep vs. 0.4% increase in Aug, the fastest monthly pace since Apr 2014 Markit/CIPS UK services PMI gained to 54.9 in Oct from a 28-month low of 53.3 in Sep, above forecasts Spain s services sector activity grew in Oct as indicated by Markit s PMI, which edged up to 55.9 from 55.1 in Sep Ireland's unemployment rate continued its steady fall in Oct, easing to 9.3% from 9.4% in Sep China ratified $100bn Asian Infrastructure Investment Bank agreement on Nov 4, paving way for its establishment Chinese President Xi Jinping said growth of 6.5% per year during will be enough to meet wealth goals Japanese PM instructed govt. to come up with plan by Nov-end to make Japan an ~$5.0tn economy over 5 years Markit s Russian services PMI fell to 47.8 in Oct from 51.3 in Sep, pointing to a continuing weak consumer demand Brazil s annual inflation climbed to 9.93% in Oct on higher food & fuel prices, the highest reading in around 12 years Canada s trade deficit narrowed more than expected to $1.32bn in Sep as exports rose 0.7% while imports fell 1.3% South Africa s Standard Bank PMI slumped to 47.5 in Oct from 47.9 in Sep, indicating private sector activity shrank Hong Kong retail sales fell for a seventh straight month by 6.4% YoY in Sep, hurt by weak consumer sentiment South Korea's consumer prices rose 0.9% YoY in Oct, the fastest since Nov 2014 & creating hurdle for further easing The UAE non-oil sector growth slowed as Emirates NBD composite PMI fell to 54.0 last month from 56.0 in Sep S&P year performance Euro Stoxx year performance Last Close 5 Day % ; *Current YTD % P/E (2015) *Div. Yield S&P 500 2, DJI 17, Nasdaq Comp 5, Euro Stoxx FTSE 100 6, Dax 10, CAC 40 4, Nikkei , Hang Seng 22, Brazil - Bovespa 46, Russia - Micex 1, BSE Sensex 26, Shanghai Comp 3, Page I 3

4 GCC EQUITIES Emaar Properties 3Q2015 earnings jumped 30.7% YoY to AED843mn. Revenue surged 55.9% YoY to AED3.3bn Emirates airline net profit soared 65.0% YoY to AED3.1bn in 1HFY amid sustained low oil prices Emirates Integrated Telecommunications net income slipped 12.3% YoY in 3Q2015 to AED489.8mn National Bank of Abu Dhabi launched banking operations in India to provide wholesale banking services; signed a deal with the Royal Bank of Scotland to purchase a portfolio of ~$900mn in offshore loans to Indian companies Amlak Finance s 3Q2015 net income zoomed 805.2% YoY to AED55.5mn. Revenue rose 11.3% YoY to AED116.3mn Abu Dhabi s Tamouh Investments secured AED600mn loan to fund the construction of Tamouh's Horizon Towers National Bank of Fujairah said it concluded an AED208mn facility for Gulf Resources Development & Investment LuLu Group plans US market foray by setting up a logistics facility, to be operational within a couple of months Bupa Arabia for Coop. Insurance is seeking shareholders not to raise its capital from SAR400mn to SAR800mn Saudi Electricity Co. signed SAR2.5bn deal with two companies to build and operate the Green Duba power plant NCB Capital s Fund 13 & Fund 4 together acquired 55.21% stake in Saudi Research & Marketing Group Jabal Omar Development Co. recorded SAR119.5mn net loss in 3Q2015 vs. SAR431.3mn net profit in 3Q2014 Kuwait Projects Co. registered 16.8% YoY rise in 3Q2015 earnings to KWD11.8mn. Revenue slipped 1.3% YoY Burgan Bank s bottom-line climbed 41.0% to KWD21.64mn in 3Q2015 from KWD15.35mn in 3Q2014 National Bank of Oman plans to mobilize up to $300mn additional (Tier 1) capital by way of overseas bond sales Al Madina Inv. entered healthcare sector by announcing OMR72mn integrated healthcare complex in Muscat Vodafone Qatar announced the further modernization of its network at an investment of QR650mn Qatar-based QInvest secured a $200mn Islamic loan from Masraf Al Rayan, Al Khaliji France and French Natixis Arab Banking Corporation s net profit dropped to $48mn in 3Q2015 from $60mn in 3Q2014 Bahrain Cinema s net income sank 40.4% YoY in 3Q2015 to BHD1.4mn. Revenue jumped 23.0% YoY to BHD6.6mn Last Close 5 Day % YTD % P/E (2015) *Div. Yield Dubai 3, Abu Dhabi 4, Saudi Tadawul 6, Qatar Index 11, Kuwait Index 5, Oman MSM 30 5, Bahrain All Share 1, Egypt EGX 30 7, Istanbul 100 Index 81, ; *Current DFMGI 1 year performance Saudi Tadawul 1 year performance Page I 4

5 CURRENCIES The US dollar gained across the board after data showed the US economy created more jobs than expected in Oct, bolstering the case for an interest rate increase in Dec. The dollar index climbed 2.3% in the week to The euro, which has already been under pressure in recent weeks on expectations the European Central Bank will beef up its stimulus in Dec, sank 2.4% this week against US dollar after US released a blockbuster payrolls data British pound depreciated 2.4% against US dollar since Oct 30 as the Bank of England Governor Mark Carney delivered a cautious inflation report, which indicated UK interest rates will remain lower for longer Offshore yuan dropped 1.1% this week to per US dollar on signs China s economic growth remains weak and on prospects the Federal Reserve will increase US interest rates as early as in Dec 2015 Russian ruble slipped ~0.9% during the week against US dollar, as better-than-expected US jobs data boosted the odds the Federal Reserve will raise rates in Dec and investors speculated the Russian currency is too strong as compared to the price of oil Brazilian real appreciated 2.3% in the week ended Nov 6 after the central bank said it would intervene in the currency market, offsetting a decision by lawmakers to delay voting on a measure to help reduce the fiscal deficit Last Close 5 Day % 1 Mth. % YTD % 1 Year % USD Index EUR/USD GBP/USD USD/JPY USD/CHF USD/CAD USD/BRL USD/RUB USD/INR USD/CNY USD/AUD Indian rupee fell ~0.8% against US dollar, completing its biggest weekly decline since mid-august on speculation demand for the nation s assets is waning amid prospects the US Fed will raise interest rates next month EUR/USD 1 year performance GBP/USD 1 year performance Page I 5

6 COMMODITIES US & Brent crude futures dropped 4.9% & 4.3% during the week, respectively, as US dollar strengthened on Fed rate hike bets. Further, persisting oversupply concerns despite fall in the US shale output also pressured prices Non-interest-paying gold demand took a hit this week, resulting in a 4.6% fall in prices after US data showed job growth surged in Oct, making it likely the Federal Reserve will hike interest rates in Dec 2015 The Tokyo Commodity Exchange rubber futures tanked 10.1% during the past five trading days, weighed down by oversupply concerns and weakening demand in China, the world s biggest buyer Spot palladium prices dropped 8.3% in the week as investors continued to move away from Exchange Traded Funds [ETFs] in Platinum Group Metals, following further fundamental weakness resulting from the Volkswagen emissions scandal and excessive mine production Last Close 5 Day % 1 Mth. % YTD % 1 Year % Brent ICE WTI Nymex Gold Spot 1, Silver Spot Copper - CMX S&P GSCI Spot Index Baltic Dry Index Comex copper futures declined 3.3% since Oct 30 on the strong dollar and demand concerns arising from weak Chinese and German manufacturing data, despite production cutbacks CBoT corn futures lost 2.4% during the week, weighed down by a surge in the US dollar that is likely to discourage demand from buyers in foreign currencies, while domestic inventories are forecasted to grow ICE cocoa futures slipped 0.7% in the week ended Nov 6 on reports that cocoa beans arriving at ports in Ivory Coast are 60,000 metric tons ahead of least season. Ivory Coast is the world s largest cocoa producer, followed by Ghana WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES The US 10-year bond yield climbed 18.3 basis points (bps) since Oct 30 to 2.3%, after strong Oct jobs report raised rate hike bets, worrying investors that the value of their bondholdings would shrink due to a shift in Fed s policy Eurozone bond yields rose this week as strong US employment data increased expectations the Fed could hike rates in Dec, propping up the dollar against euro and easing pressure on the ECB to provide more stimulus. Germany s 10-year bund yield grew 17.6 bps to ~0.7% while similar maturity Italian yield gained 30.8 bps to 1.79% The Bank of England, in its inflation report released on Nov 5, suggested that the record low interest rate of 0.5% is not expected to rise until 2017 because of weak state of global economy and ultra-low domestic inflation The Reserve Bank of Australia kept its official cash rate at a record-low of 2.0% on Nov 3, where it has been since May, saying low inflation readings left open the prospect of further cuts if needed Romanian central bank left its key interest rate at 1.75% on Nov 5, saying resignation by the govt. this week and protests demanding early elections complicated its decision and stoke uncertainties around monetary policy Malaysia s central bank kept the overnight policy rate for an 8 th meeting at 3.25% on Nov 5, as policy makers juggle risks to economic growth while contending with a currency that is the worst performer in Asia in 2015 Last Close 5 Day % 1 Mth. % YTD % 1 Year % USD-10yr USD-2yr Fed Funds Rate USD-3m Libor USD-6m Libor German-10yr UK-10yr Japan-10yr AED-3m EIBOR AED-6m EIBOR The Bank of Zambia raised its benchmark lending rate by a record 3 percentage points to 15.5% on Nov 3, in order to rein in inflation after the currency of Africa s second-biggest copper producer lost almost half its value this year US 10 year Generic Yield 1 year performance UK 10 year Generic Yield 1 year performance Page I 7

8 EQUITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Country Weekly Change Weekly Change (USD Adj.) 1 Venezuela 7.93% 7.93% 2 China 6.13% 5.53% 3 Denmark 4.58% 2.04% 4 Luxembourg 4.26% 1.75% 5 Kazakhstan 4.08% -5.20% 6 Argentina 3.52% 2.78% 7 Finland 3.38% 0.89% 8 Hungary 3.38% -0.40% 9 Turkey 3.17% 3.06% 10 Austria 3.02% 0.54% Ref Country YTD Change YTD Change (USD Adj.) 1 Venezuela % % 2 Jamaica 75.75% 67.91% 3 Argentina 50.36% 32.87% 4 Latvia 44.83% 28.58% 5 Hungary 33.97% 19.70% 6 Malta 33.17% 18.23% 7 Denmark 31.77% 16.78% 8 Slovakia 30.11% 15.52% 9 Ireland 26.33% 12.16% 10 Italy 18.50% 5.21% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Mongolia -3.71% -3.69% 2 Ukraine -3.53% -1.55% 3 Greece -3.39% -5.72% 4 Saudi Arabia -2.30% -2.29% 5 Tunisia -2.28% -4.18% 6 Lebanon -2.01% -1.65% 7 Poland -1.95% -4.85% 8 Serbia -1.80% -4.26% 9 Namibia -1.67% -4.04% 10 South Africa -1.54% -3.92% Ref Country YTD Change YTD Change (USD Adj.) 1 Peru % % 2 Ukraine % % 3 Colombia % % 4 Greece % % 5 Saudi Arabia % % 6 Nigeria % % 7 Egypt % % 8 Mongolia % % 9 Bulgaria % % 10 Kenya % % Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Rough Rice 4.95% 2 Aluminium 3.01% 3 Orange Juice 2.75% 4 Steel Rebar 2.38% 5 Natural Gas 2.15% 6 Wheat 0.24% Ref Commodity YTD Pct Change 1 Cocoa 11.24% 2 Rough Rice 6.05% 3 Cotton 2.31% Ref Commodity Weekly Change 1 Rubber % 2 Palladium -8.26% 3 Lean Hogs -7.09% 4 Silver -4.95% 5 WTI Crude -4.94% 6 Feeder Cattle -4.86% 7 Gold -4.58% 8 Ethanol -4.49% 9 Platinum -4.46% 10 Brent Crude -4.32% Ref Commodity YTD Pct Change 1 Nickel % 2 Rubber % 3 Lean Hogs % 4 Steel Rebar % 5 Coffee % 6 Lumber % 7 Tin % 8 Zinc % 9 Palladium % 10 Platinum % Page I 9

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. Page I 10