Weekly Market Review. November 22 nd, 2015 November 28 th, 2015

Transcription

1 Weekly Market Review November 22 nd, 2015 November 28 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 3Q2015 GDP growth revised higher to 2.1% annual pace in 3Q2015 as compared to 1.5% reported earlier Non-defense capital goods orders excluding aircraft rose 1.3% in Oct following a 0.4% gain in Sep Consumer spending edged up 0.1% in Oct, same as in Sep while savings rose to highest since Dec 2012 S&P/Case Shiller composite price index of 20 metropolitan areas gained 5.5% YoY in Sep vs. 5.1% in Aug Markit s Eurozone flash composite PMI jumped to over four-year high of 54.4 in Nov from 53.9 in Oct Ifo institute s German business climate index climbed to the highest since Jun 2014 at 109 in Nov vs in Oct Markit s German composite PMI inched up to 54.9 in Nov from 54.2 in Oct, the highest since Aug 2015 GfK German consumer sentiment index slipped less than expected to 9.3 in Nov from 9.4 in Oct French flash Markit composite output index slipped to 51.3 in Nov from 52.6 in Oct, partly affected by Paris attacks British GDP advanced 0.5% QoQ and 2.3% YoY in 3Q2015, unrevised from the previously published estimate GfK consumer sentiment indicator dipped to +1 in Nov from +2 in Oct vs. forecasts for it to hold steady Greece s GDP declined 0.9% QoQ in 3Q2015, a steeper fall than the earlier estimate of 0.5% contraction Austrian economy grew 0.3% in 3Q2015, matching 2Q2015 helped by improved exports, trade and fixed capital inv. Japan said it will raise minimum wage by 3.0% each year from next fiscal year to boost consumption and growth Household spending dropped 2.4% YoY in Oct as against a market forecast of 0.1% increase Markit/Nikkei flash manufacturing PMI edged up to a seasonally adjusted 52.8 in Nov from 52.4 in Oct China said it plans to invest over $437bn to build more than 23,000 kilometers of railway lines over the next 5 years Chinese industrial companies profit declined for the 5 th consecutive month by 4.6% YoY in Oct South Africa narrowly avoided recession as GDP rose an annualized 0.7% in 3Q2015 after shrinking 1.3% in 2Q2015 Australia lowered its estimate of economy s potential growth over the next few years to 2.75% from 3.0% Singapore s economy expanded an annualized 1.9% in 3Q2015 following a 2.6% fall in 2Q2015, beating estimates 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 11, CAC 40 4, Nikkei , Hang Seng 22, Brazil - Bovespa 45, Russia - Micex 1, BSE Sensex 26, Shanghai Comp 3, Page I 3

4 GCC EQUITIES National Bank of Abu Dhabi (NBAD) has issued a $200mn floating rate note of two years duration Drake & Scull Engineering secured two projects for a combined worth of AED131mn in Abu Dhabi and Dubai Essa Al Ghurair Investment said it may bid for flour mills that Saudi Arabia is preparing to sell to private investors US PE firms Warburg Pincus & General Atlantic acquired a 49% stake in Network International from Abraaj Group Essa al-ghurair said he plans 30% stake sale in healthcare business in 3 yrs. to fund his company s Africa expansion Dubai Investments has invested 90% of total project cost to build Austria s MODUL University 1 st campus in Dubai Nakheel signed a management agreement with Starwood Hotels & Resorts to operate St Regis hotel in Dubai Abu Dhabi National Energy Co. has filed with US regulators to sell its 50% stake in Lakefield wind power plant Arab Petroleum Investments Corp. said it will issue $1bn Sukuk in 2016, may issue another $1.7bn in 2017 Alwaha Petrochem. signed a SAR262.5mn working capital financing agreement with Saudi Fund for Development Advanced Petrochemical Company recommended distribution of 7.5% dividend, totaling SAR123mn for 4Q2015 Saudi Capital Market Authority said Alandalus Property will launch an initial public offering in mid-december 2015 Yamama Cement signed a SR4.2bn deal with ThyssenKrupp Industrial Solutions to build two new cement plants PT Pertamina inked a deal with Saudi Aramco for the operation and upgrade of Cilacap Refinery in Indonesia Moody's Investors Service upgraded Kuwait s Gulf Bank long-term deposit ratings to A3 from Baa1 ORPIC said it has finalized negotiations for $4.5bn contracts with preferred bidders to build a plastics complex Oman s largest paint factory, set up by Berger Paints in Sohar, will be officially inaugurated in December 2015 Nama Group signed nine contracts worth OMR159mn during the recently held Business Opportunity Forum Qatar s Mannai Corp. is in talks to buy 51% stake in European Gifi Informatique at 8.5/share, amounting ~ 561mn Bahrain-based Nogaholding is seeking a $350mn 5-year Islamic loan for general business purposes Gulf Aluminum Rolling Mill has signed a new gas supply agreement with Bahrain Petroleum Company DFMGI 1 year performance Last Close 5 Day % YTD % P/E (2015) *Div. Yield Dubai 3, Abu Dhabi 4, Saudi Tadawul 7, Qatar Index 10, Kuwait Index 5, Oman MSM 30 5, Bahrain All Share Saudi Tadawul 1 year performance 1, Egypt EGX 30 6, Istanbul 100 Index 75, ; *Current Page I 4

5 CURRENCIES The US dollar advanced this week, sending the USD index up ~0.5% as speculation the Swiss National Bank would follow the European Central Bank in cutting deposit rates further pushed major competitors lower Brazil s real depreciated 3.8% against the US dollar in the week ended Nov 27 as the arrest of a ruling-party senator this week threatened to sidetrack President Dilma Rousseff s economic agenda Russian ruble weakened 2.6% this week against the US dollar amid tension over the downing of a Russian war jet by Turkey on Nov 24, as well as continued weakness in crude oil prices Canadian dollar inched down ~0.2% in the week against a broadly firmer greenback amid fresh volatility in Chinese stocks and as Canadian produces prices fell for a 3 rd month in a row by 0.5% in Oct, a bigger drop than expected Indian rupee ended the week declining 0.85% with respect to the US dollar as foreign institutional investors (FIIs) continued to liquidate their investment in the local equity and debt market Malaysian ringgit firmed 0.7% to per US dollar from Nov 20 spurred by a two-week rally in Brent crude, adding to improving sentiment for the net oil exporter as a debt-ridden state investment company sells its assets 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 South Korean won appreciated 0.1% to 1,153 per US dollar during the past five days on speculation exporters sold dollars as they booked overseas earnings before month-end EUR/USD 1 year performance GBP/USD 1 year performance Page I 5

6 COMMODITIES WTI crude futures climbed ~3.3% during the week as Baker Hughes rig count fell by 9 to 555 this week. The corresponding figure at the same time of last year was 1,500 Spot gold prices declined for the sixth straight week by 1.9%, pressured from a stronger US dollar and prospects of a US interest rate increase in Dec 2015 Tokyo commodity exchange (TOCOM) rubber futures surged ~13.1% in the week, aided by a sharp rise in Shanghai rubber as well as aggressive buying from funds to unwind their short positions The London Metals Exchange (LME) tin futures rose 2.4% from Nov 20 on speculation that Chinese miners are getting serious about production cuts and Beijing may start stockpiling metals to make the most of low prices The Intercontinental Exchange (ICE) cotton futures firmed up 1.7% during the past five days, bolstered by forecasts of freezing rains for key areas of Texas, the top-producing US state 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 The Chicago Board of Trade (CBoT) wheat futures dropped ~5.1% this week after a US Department of Agriculture (USDA) report showed export sales of the grain were at the low end of analyst estimates The ICE sugar futures edged up 0.1% in the week ended Nov 27 despite a weakening Brazilian currency on talks of wet weather hampering harvesting in Brazil and lower-than-expected output in India WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES The US 10-year bond gained and yield fell 4.2 basis points (bps) to a three-week low of 2.22% after a selloff in China s stock markets boosted demand for safe haven assets Eurozone government bonds advanced this week, sending benchmark yields down as investors speculation intensified that the European Central Bank will boost stimulus in Dec German 10-year bund yield slipped 1.9 bps to 0.46%, French 10-year yield fell 4.3 bps to 0.77% while Italy s 10-year yield slid 9.2 bps to 1.40% China s primary money market rates ended the week on a mixed note as ample liquidity mitigated upward pressure in yields that came from the resumption of stock market listings. The one-day or overnight rate stood at % and the 14-day repo stood at %, respectively flat and up six bps on the week Brazil s central bank kept its benchmark Selic rate at 14.25% for the third straight meeting on Nov 25 as expected in a move to avoid further damage to an ailing economy, despite a surge in inflation The central bank of the six-nation Central African CEMAC zone maintained the region s main interest rate at 2.45% on Nov 27 and trimmed the 2015 growth forecast to 2.5% from 2.8%. The CEMAC zone includes Cameroon, Central African Republic, Chad, Republic of Congo, Gabon and Equatorial Guinea 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 Nigeria s central bank surprisingly cut its benchmark interest rate to 11% from 13% on Nov 24, its first reduction in the cost of borrowing in more than six years in an effort to stimulate growth in Africa s biggest economy 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 Slovakia 3.51% 2.99% 2 Saudi Arabia 2.91% 2.82% 3 Serbia 2.67% 1.56% 4 Hungary 2.54% 1.70% 5 Lebanon 2.52% 2.52% 6 Venezuela 2.00% 2.00% 7 South Korea 1.97% 2.08% 8 Italy 1.96% 1.46% 9 Ukraine 1.72% 4.31% 10 Germany 1.56% 1.06% Ref Country YTD Change YTD Change (USD Adj.) 1 Venezuela % % 2 Jamaica 75.78% 69.94% 3 Argentina 53.46% 34.28% 4 Latvia 44.42% 26.45% 5 Hungary 42.56% 26.72% 6 Slovakia 38.12% 20.94% 7 Malta 34.50% 17.76% 8 Denmark 34.47% 17.52% 9 Ireland 30.13% 13.94% 10 Italy 18.74% 3.97% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Argentina -7.11% -7.20% 2 Turkey -6.25% -9.34% 3 China -5.35% -5.49% 4 Brazil -4.71% -8.20% 5 Poland -4.25% -5.49% 6 Colombia -4.06% -5.38% 7 Russia -3.61% -3.61% 8 Vietnam -3.57% -3.62% 9 Chile -3.27% -3.40% 10 Qatar -3.11% -3.12% Ref Country YTD Change YTD Change (USD Adj.) 1 Peru % % 2 Ukraine % % 3 Egypt % % 4 Colombia % % 5 Greece % % 6 Nigeria % % 7 Cyprus % % 8 Poland % % 9 Bulgaria % % 10 Mongolia % % Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Rubber 13.09% 2 Gasoline 7.97% 3 Lean Hogs 6.00% 4 Soybean Oil 4.36% 5 WTI Crude 3.27% 6 Natural Gas 3.12% 7 Tin 2.42% 8 Cotton 1.71% 9 Lumber 1.69% 10 Soybeans 1.51% Ref Commodity YTD Pct Change 1 Cocoa 13.68% 2 Rough Rice 4.05% 3 Cotton 3.92% 4 Sugar 3.10% 5 Orange Juice 2.25% Ref Commodity Weekly Change 1 Feeder Cattle -5.25% 2 Orange Juice -5.20% 3 Wheat -5.09% 4 Natural Gas -2.81% 5 Platinum -2.19% 6 Palladium -2.19% 7 Gold -1.90% 8 Cocoa -1.72% 9 Gasoil -1.53% 10 Bean Meal -1.47% Ref Commodity YTD Pct Change 1 Nickel % 2 Steel Rebar % 3 Palladium % 4 Platinum % 5 Zinc % 6 Lean Hogs % 7 Copper % 8 Coffee % 9 Heat Oil % 10 Lumber % 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