Weekly Market Review March 22, 2015 March 28, 2015

Transcription

1 Weekly Market Review March 22, 2015 March 28, 2015 March 29, 2015

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 economy expanded at 2.2% in 4Q2014, unrevised from the previous forecast in Feb. GDP grew at 5% in 3Q2014 US new home sales rose 7.8% in Feb to 539,000 units while Jan sales was revised up to 500,000 from 481,000 units Consumer prices increased 0.2% in Feb after dropping 0.7% in Jan, ending 3 straight months of decline Markit s preliminary manufacturing PMI rose to 55.3 in Mar, highest since 55.9 recorded in Oct 2014 Business investment spending fell for a 6 th straight month by 1.4% in Feb, pointing to tepid 1Q 15 growth University of Michigan consumer sentiment index fell to 93 in Mar from 95.4 in Feb European Union will impose punitive anti-dumping duty of 24-25% & 11-12% on imports of stainless steel coldrolled sheets from China and Taiwan, respectively Loans to private sector in Euro zone fell 0.1% on the year after a downwardly revised drop of 0.2% recorded in Jan Markit s flash Euro zone composite PMI jumped to a near 4-year high of 54.1 in Mar from 53.3 in Feb Ifo's business climate index for Germany climbed to in Mar from in Feb, pointing to a strong 1Q2015 Economic advisers hike 2015 growth forecast to 1.8% form 1.0% citing cheaper oil & weaker euro Annual rate of consumer price inflation in Britain dropped to zero in Feb as compared to 0.3% in Jan French economy grew by 0.1% in 4Q2014, resulting in the economy expanding by 0.4% in the whole of 2014 Business morale indicator from INSEE rose to 96 in Mar from 94 in Feb, its highest level since Apr 2012 Fitch cut Greece s credit rating to CCC from B on uncertainty over timely release of aid from its official creditors China s flash HSBC/Markit manufacturing PMI dipped to an 11-month low of 49.2 in Mar as new orders sank Brazil accepted China s invitation to join Asian Infrastructure Investment Bank (AIIB) as a founding member. Britain, France, Germany & Italy have already announced that they would join the bank despite US warning against it Markit/JMMA flash Japan manufacturing PMI fell to 50.4 in Mar from 51.6 in Feb as domestic orders contracted Core CPI, stripping 2014 sales tax hike effect, stood flat YoY in Feb, pressuring BoJ to expand stimulus Last Close Change 5 Day % YTD % S&P 500 2, DJI 17, Nasdaq Comp 4, Euro Stoxx FTSE 100 6, Dax 11, CAC 40 5, Nikkei , Hang Seng 24, Brazil - Bovespa 50, , Russia - Micex 1, BSE Sensex 27, Shanghai Comp 3, S&P year performance Euro Stoxx year performance Page I 3

4 GCC EQUITIES Aabar Investments plans to raise up to 2bn by launching bonds exchangeable into Italian bank UniCredit s shares Arabtec Construction won an AED1.04bn contract from Saudi Aramco for the construction of 380 villas Arabtec Holding plans to sell 4 of its 5 Saudi units despite stating that it aims to expand its activities in the Kingdom Dubai Holding Commercial Operations Group s FY2014 net profit soared 42% YoY to AED4.68bn Aldar Properties completed sale of 281 land plots at Al Merief, generating over AED600mn of revenues National Bank of Fujairah successfully issued a 2 nd tranche of additional Tier I capital worth AED500mn Dubai World has been granted approval to end court proceedings relating to its $14.6bn debt restructuring deal Etisalat s shareholders approved increasing authorized capital to AED10bn, 10% bonus & 35 fils/share dividend Borse Dubai sold entire 17.4% stake in London Stock Exchange for ~ 1.5bn, ruled out selling stake in NASDAQ OMX Shuaa Capital signed a deal with Cayan Group to set up a fund for developing an AED1bn residential & hotel project United Kaipara Dairies shareholders approved changing company s name to Unikai Foods, split nominal share value from AED100 to AED1 Saudi Aramco reportedly reached an agreement with a group of global & regional banks to borrow $10bn Abdullah Al-Khodari renewed financing agreement with Nat. Comm. Bank & Saudi Hollandi Bank totaling SAR1.1bn Saudi s ACWA Power & Japan s Mitsui & Co. won $630mn deal to build 445MW power plant in Oman Arab Petroleum Investment Corp. secured $950mn worth new financing through Shari ah-compliant syndication Oman Telecommunications Co. shareholders approved the issue of Islamic bonds/sukuk worth OMR50mn Ahli bank s shareholders approved 10% stock dividend, increasing authorized capital by OMR100mn to OMR250mn Qatar s Lusail Real Estate Develop. Co. awarded QAR6.2bn worth contracts for development works in Lusail City New Port Project Steering Committee awarded QAR239mn Hamad Port Project contract to Gulf Earth Moving Co. Bahrain Flour Mills Co. plans to set up a new factory investing BHD20mn to double its flour production capacity Last Close Change 5 Day % YTD % Dubai 3, Abu Dhabi 4, Saudi Tadawul 8, Qatar Index 11, Kuwait Index 6, Oman MSM 30 6, Bahrain All Share 1, Egypt EGX 30 9, Istanbul 100 Index 80, , DFMGI 1 year performance Saudi Tadawul 1 year performance Page I 4

5 CURRENCIES US dollar depreciated 0.63% in the week to per euro, losing around 3.7% over the last two weeks against the shared currency on expectations that the Federal Reserve will begin raising interest rates later in 2015, and more gradually, than market participants had previously anticipated Brazil s real weakened 0.58% in the week to per dollar amid concerns that Brazil s economy will contract in 2015 and as Fed s Chair Janet Yellen said she expects US policy makers to raise interest rates this year. Meanwhile, Brazil s Central Bank said on Mar 24 it will stop swap auctions by Mar 2015-end that has bolstered the currency Russia s ruble closed the week appreciating 2.4% to per dollar, helped by a surge in oil prices and a weaker dollar. Oil is key driver for all Russian assets since it is the country's chief export China s Yuan declined 0.18% in the week to per dollar as purchasing manager s data added to evidence of a slowdown in the world s second-largest economy Indian rupee gained 0.08% in the week to per dollar, completing a 2 nd week of gains on optimism the nation s improving economic outlook will attract more inflows. Asian Development Bank on Mar 24 said stronger external demand and efforts to remove structural bottlenecks will boost India s growth to 8.2% in FY Malaysia s ringgit strengthened 1.3% in the week to per dollar as crude s advance allayed concern about a drop in revenue for Malaysia, the only net oil exporter among Asia s major economies 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 EUR/USD 1 year performance GBP/USD 1 year performance Page I 5

6 COMMODITIES WTI crude futures gained 4.94% in the week while Brent futures also gained 1.97% amid concerns of disruption in oil shipment from the Middle East after Saudi Arabia launched air strikes on Yemen Gold climbed 1.36% in the week, recording its 2 nd straight weekly gain on expectations US interest rates will stay low for longer. Tensions in Middle East arising from Saudi air strikes on Yemen also provided some support to gold Palladium prices dipped 4.6% in the week as China s net imports of palladium fell 54% in Feb despite China reporting rise in car sales in the 1 st two months of Palladium is used as a component of catalytic converters in automobiles Orange-juice futures surged 10.6% in the week amid mounting concerns over crops in Florida, the world s 2 nd biggest producer, on forecasts of drier-than-normal weather in the region over the next two weeks, worsening soil conditions after a lack of rain in Feb 2015 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 Wheat futures on Chicago Board of Trade dropped 4.2% in the week as data showed US wheat exports dropped 74% YoY to 102,341 metric tons in the week ended March 19, 2015, lowest since the season started in June. The EU overtook the US as the biggest wheat shipper in 2014 as appreciating dollar makes American goods more expensive Raw sugar futures on ICE closed the week down 4.34%, pushed down by the falling Brazilian real currency and ample supplies and stocks WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES UK government bonds posted their first weekly decline since Mar 6 and yields rose 2.6 bps to 1.54% after Bank of England Governor Mark Carney reiterated that the next move in interest rates is likely to be up Italian bonds declined and 10-year yield climbed 15 bps in the week to 1.35% as investors cut back on higheryielding assets amid concerns Greece has made little progress in ending an impasse over its finances The National Bank of Hungary cut its main monetary policy rate on Mar 24 by 0.15 of a percentage point to a fresh record low of 1.95% in a bid to induce price growth and economic expansion Mexico s central bank kept overnight rate unchanged at a record low of 3% for a sixth straight meeting, saying the growth outlook for Latin America s second-biggest economy has deteriorated The Philippines central bank held the rate it pays lenders for overnight deposits at 4% as an anticipated acceleration in economic growth reduces the need for stimulus. Its central bank forecasted that economy may grow by around 8% in 2015, while inflation may be slower than previously estimated 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 Nigeria s central bank kept its key interest rate unchanged at a record high of 13% in the Monetary Policy Committee s final meeting on Mar 24, before the elections on Mar 28 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 9.60% 9.60% 2 Laos 8.55% 8.70% 3 Nigeria 4.19% 4.29% 4 Hungary 3.84% 5.54% 5 Greece 3.26% 3.91% 6 Denmark 3.06% 3.52% 7 China 2.04% 1.86% 8 Kazakhstan 1.94% 1.81% 9 Montenegro 1.73% 2.37% 10 Serbia 1.72% 2.33% Ref Country YTD Change YTD Change (USD Adj.) 1 Venezuela 32.04% 32.04% 2 Denmark 27.03% 14.00% 3 Portugal 25.27% 12.75% 4 Argentina 24.30% 19.45% 5 Germany 21.04% 8.94% 6 Italy 20.89% 8.81% 7 Hungary 20.02% 13.89% 8 France 17.82% 6.04% 9 Finland 17.49% 5.75% 10 Ireland 14.97% 3.48% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Argentina -6.34% -6.45% 2 Pakistan -5.79% -5.59% 3 Egypt -4.89% -4.18% 4 Vietnam -4.17% -4.35% 5 Ukraine -4.14% % 6 Slovakia -3.90% -3.30% 7 Brazil -3.60% -4.16% 8 Switzerland -3.33% -1.98% 9 Kuwait -3.31% -3.26% 10 Saudi Arabia -2.95% -2.98% Ref Country YTD Change YTD Change (USD Adj.) 1 Peru % % 2 Colombia % % 3 Kazakhstan % % 4 Nigeria % % 5 Mongolia % % 6 Dubai UAE -9.72% -9.71% 7 Cyprus -7.18% % 8 Qatar -7.12% -7.09% 9 Greece -6.96% % 10 Pakistan -6.76% -8.02% Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Orange Juice 10.60% 2 WTI Crude 4.94% 3 Natural Gas 4.58% 4 Lean Hogs 4.58% 5 Gasoil 2.90% 6 Live Cattle 2.70% 7 Lead 2.44% 8 Steel Rebar 2.44% 9 Feeder Cattle 2.05% 10 Brent Crude 1.97% Ref Commodity YTD Pct Change 1 Gasoline 25.27% 2 Silver 8.04% 3 Rubber 7.88% 4 Gasoil 5.61% 5 Cotton 5.44% 6 Aluminium 3.21% 7 Gold 1.17% Ref Commodity Weekly Change 1 Nickel -6.74% 2 Palladium -4.61% 3 Sugar -4.34% 4 Wheat -4.20% 5 Coffee -3.59% 6 Cocoa -1.65% 7 Bean Meal -0.80% 8 Aluminium -0.78% 9 Palm Oil -0.78% 10 Soybeans -0.67% Ref Commodity YTD Pct Change 1 Lean Hogs % 2 Coffee % 3 Sugar % 4 Lumber % 5 Wheat % 6 Nickel % 7 Bean Meal % 8 Tin % 9 Steel Rebar -9.67% 10 Orange Juice -9.10% 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