Weekly Market Review November 29, 2015 December 5, 2015

Transcription

1 Weekly Market Review November 29, 2015 December 5, 2015 December 6, 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 housing market remained on firm ground as construction spending advanced 1.0% in Oct vs. gaining 0.6% in Sep Jobs increased 211,000 in Nov while Oct & Sep data was revised higher by 35,000. Jobless rate held at 5% The ISM non-manufacturing activity index dropped to 55.9 in Nov from 59.1 in Oct as new orders fell New orders for US factory goods climbed 1.5% in Oct after declining for two straight months JP Morgan/Markit global manufacturing PMI slipped to 51.2 in Nov from a five-month high of 51.3 in Oct The UN FAO said world food prices fell by 1.6% MoM in Nov, pulled down by a stronger dollar and ample supplies Canadian manufacturing sector shrank for the 4 th month in a row in Nov as RBC PMI stood at 48.6 vs in Oct Markit's final Eurozone manufacturing PMI edged up to 52.8 in Nov from 52.3 in Oct despite firms cutting prices The European Central Bank slashed Eurozone 2016 & 2017 inflation forecast by 0.1% to 1.0% & 1.6%, respectively German manufacturing activity in Nov rose to 3 months high as Markit s PMI improved to 52.9 vs in Oct Factory orders moved up for the 1 st time in 4 months by 1.8% in Oct after a revised 0.7% drop in Sep French jobless rate reached 10.8% in Oct, surpassing Eurozone s 10.7% rate for the 1 st time since Nov 2007 Markit/CIPS British manufacturing PMI dropped to 52.7 in Nov from a 16-month high of 55.2 in Oct Japan factory output rose for a 2 nd straight month by 1.4% MoM in Oct as compared to a 1.1% increase in Sep Real wages edged up 0.4% YoY in Oct after a revised 0.3% gain in Sep, offering hopes to aid consumption Caixin/Markit China services PMI slipped to 51.2 in Nov from a 3-month high of 52.0 in Oct as new orders weakened South Africa and China signed deals worth $6.5bn in a step toward boosting investment & trade between them Indian economy grew by 7.4% in 3Q2015, higher than a Bloomberg estimate of 7.3% & 2Q2015 s expansion of 7.0% Brazil s recession deepened as economy contracted by a larger than expected 1.7% QoQ & 4.5% YoY in 3Q2015 Markit s factory PMI fell to 43.8 in Nov from 44.1 in Oct, indicating manufacturing downturn worsened Australia s GDP advanced 0.9% in 3Q2015 vs. rising 0.3% in 2Q2015, driven by fastest gain in exports since 2000 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 45, Russia - Micex 1, BSE Sensex 25, Shanghai Comp 3, Page I 3

4 GCC EQUITIES Dubai-based GFH Capital agreed to acquire a bread and sweets producer in Saudi Arabia for $50mn Abu Dhabi National Oil Co. (ADNOC) said it is planning to bring down capital and operating expenditure by 25% Dubai s advisory services firm C.H. Stirling plans to raise $27mn of fresh capital and triple its staff by next summer Al-Dahra said an AED140mn 80,000 tons/year prod. capacity rice mill will start operations in Abu Dhabi in 2Q2016 Jeddah Economic Co. agreed with Alinma Bank to establish a SAR8.4bn real estate development fund Bank AlJazira signed a MoU to sell the land located in AlJubail Province - Eastern Region for SAR217.56mn Saudi Pharma. Ind. & Medical Appliances acquired a 51% stake in Egypt s Meivo Int. for Pharma. at SAR74.88mn Saudi Aramco is seeking to double the percentage of locally produced goods & services it buys to 70% by 2021 Abdullah A.M. Al-Khodari Sons signed a SAR294.33mn Islamic credit facilities agreement with Banque Saudi Fransi Jumeirah Group mulls opening branches in five major Saudi cities as well as adding a new hotel in 2016 Kuwait s Burgan Bank accepted $362.9mn worth of bonds tendered against its offer to buy back a $400mn bond Omagine LLC said it is in discussions with a Qatari bank for financing phase I of its $2.5bn Muscat realty project Al Jazeira Services declined the 300 baizas per share offer for divesting its 36.99% stake in Al Anwar Ceramic Tiles The Commercial Bank denied reports it was attempting to sell 40% stake in its UAE associate United Arab Bank Qatar-based Barwa Bank listed a $2bn Islamic bonds program on the Irish Stock Exchange Qatar s Salam Enterprises plans to establish a new limited liability co. with 16,000 capital in Italy s Reggio Emilia Nebras Power entered into a deal to acquire Qatar Electricity & Water Company s stake in AES Oasis Ltd. Securities & Investment Co. delisted SICO Arab Financial Fund & SICO Money Market Fund from the Bahrain Bourse Bahrain-based Arcapita sold real estate assets it jointly held with Al Rajhi Capital for SAR1.35bn Bahrain Islamic Bank (BisB) said its 170,940,171 shares rights offer has been subscribed 100% Gulf Hotels Group said it will not pursue its plan to increase its shareholding in Bahrain Family Leisure Co. 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 74, ; *Current Page I 4

5 CURRENCIES Euro recorded its largest weekly gain since May against US dollar, rising 2.72%, sparked by the announcement of a raft of monetary stimulus measures by the European Central Bank which fell short of investors expectation Sterling declined 2.16% this week to pence per euro as expectations build-up that the Bank of England will hold rates at record low and maintain status quo on its 375bn asset purchase program in Dec 2015 Brazil s real gained 2.45% in the week against US dollar after Lower house head Eduardo Cunha accepted a request to impeach the president and as Congress approved a budget measure that will avoid a government shutdown Russian ruble depreciated for a 2 nd consecutive week as it depreciated 2.43% during the past 5 days against US dollar, tracking the crude oil prices which declined in excess of 4.0% from Nov 27, 2015 The offshore yuan appreciated marginally from Nov 27 to per US dollar as weaker-than-expected stimulus from the European Central Bank bolstered the euro and curb demand for dollars Mexico s peso declined 0.17% to per US dollar during the week after the European Central Bank announced smaller-than-forecasted stimulus measures, fueling a selloff in currencies that had been used to wager on further monetary easing in Europe 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 Malaysian ringgit rose for a third week, appreciated 0.69% to per US dollar helped by a weakening of greenback and as Malaysian exports climbed almost twice as fast as economists forecasted in Oct 2015 EUR/USD 1 year performance GBP/USD 1 year performance Page I 5

6 COMMODITIES Brent and WTI crude futures fell over 4.00% this week as OPEC said it would continue to closely monitor developments in the coming months, but won t deviate from its current production of around 31.5mn barrels a day Spot gold prices gained 2.78% during the week as the Nov US jobs report showed underemployment rate crept higher, reflecting a rise in the number working part-time which spurred hopes that pace of tightening will be slow Comex copper futures rose this week by 1.15% for the 1 st time since Oct after a report showed US employers added more jobs than forecasted in Nov, boosting demand prospects. The US is the biggest user of the metal after China The Chicago Board of Trade (CBoT) soybean futures gained 3.78% in the week ended Dec 4 due to adverse weather in Brazil, a rival producer of the oilseeds, and a jump in prices for products made from the crop The CBoT soybean oil futures surged 10.61% from Nov 27 on speculation that demand for US supplies could increase amid weaker-than-expected production of rival palm oil in Malaysia and larger-than-expected federal requirements for US biodiesel volumes in the nation s gasoline supply last week 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 CBoT corn futures advanced 4.73% during the past 5 days as large investors such as hedge funds continued exiting bearish wagers by buying futures to avoid losses as grain markets rally and as US dollar weakens The ICE cocoa futures moved up 1.84% in the week as euro appreciated against US dollar. Europe is the world s largest cocoa consumer and when the euro rises against the dollar it makes cocoa cheaper for Europeans to buy WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES The US 10-year bond yield firmed 4.92 basis points (bps) in the week ended Dec 4 to 2.27% after US employment data for Nov appeared to set the seal on an interest rate increase later in Dec 2015 The European Central Bank cut its deposit rate to -0.3% from -0.2% on Dec 3 and said it would extend its bond purchase through March However, the stimulus failed to meet investor expectations leading to higher bond yields. German and French 10-yr yield climbed around 22.0 bps each to 0.68% and 1.00%, respectively The Bank of Canada kept its overnight interest rate at 0.50% on Dec 2 as expected, noting that Canadian and global growth is evolving broadly in line with its Oct 2015 outlook The Reserve Bank of Australia left the cash rate at 2.0% for the 7 th month in a row on Dec 1. The RBA said the low inflation outlook left scope for further policy easing, should that be appropriate to lend support to demand The Reserve Bank of India kept the benchmark repurchase rate at 6.75% on Dec 1 after cutting it four times in 2015 to meet inflation targets that are starting to look more vulnerable Bank Indonesia lowered the interest rate it pays banks on their reserve requirement deposits to 2.50% from 3.00% previously on Dec 1, as a part of easing of reserve requirements to encourage them to lend more 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 National Bank of Kazakhstan delayed its monetary policy meeting on Dec 3, originally scheduled for Nov 2, saying it was looking for ways to address money market imbalances without giving a new date for policy meet 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 Egypt 5.47% 5.59% 2 Serbia 3.41% 6.01% 3 China 2.58% 2.45% 4 Estonia 1.26% 4.01% 5 Venezuela 1.25% 1.25% 6 Lebanon 0.88% 0.88% 7 Jordan 0.79% 0.82% 8 Hong Kong 0.76% 0.77% 9 Singapore 0.70% 1.81% 10 Denmark 0.54% 3.28% Ref Country YTD Change YTD Change (USD Adj.) 1 Venezuela % % 2 Jamaica 75.78% 68.01% 3 Argentina 52.36% 32.58% 4 Latvia 43.03% 28.64% 5 Hungary 42.05% 29.36% 6 Slovakia 36.16% 22.46% 7 Denmark 35.19% 21.38% 8 Malta 34.13% 20.63% 9 Ireland 29.26% 16.25% 10 Estonia 19.76% 7.71% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Greece -6.50% -3.96% 2 Namibia -6.16% -5.95% 3 Netherlands -5.35% -2.77% 4 Russia -5.21% -5.21% 5 Germany -4.80% -2.21% 6 South Africa -4.56% -4.34% 7 France -4.37% -1.77% 8 Poland -3.50% -1.91% 9 Mongolia -2.98% -3.18% 10 Belgium -2.97% -0.33% Ref Country YTD Change YTD Change (USD Adj.) 1 Ukraine % % 2 Peru % % 3 Colombia % % 4 Greece % % 5 Egypt % % 6 Cyprus % % 7 Nigeria % % 8 Poland % % 9 Namibia % % 10 Mongolia % % Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Soybean Oil 10.61% 2 Platinum 5.23% 3 Rubber 5.09% 4 Corn 4.73% 5 Lead 4.21% 6 Aluminium 3.91% 7 Soybeans 3.78% 8 Sugar 3.41% 9 Silver 3.25% 10 Palladium 2.92% Ref Commodity YTD Pct Change 1 Cocoa 15.77% 2 Sugar 6.61% 3 Cotton 4.91% Ref Commodity Weekly Change 1 Gasoline -8.65% 2 Rough Rice -6.48% 3 Live Cattle -5.73% 4 Gasoil -5.38% 5 WTI Crude -4.17% 6 Brent Crude -4.15% 7 Feeder Cattle -3.96% 8 Lean Hogs -2.85% 9 Steel Rebar -2.38% 10 Orange Juice -2.27% Ref Commodity YTD Pct Change 1 Nickel % 2 Steel Rebar % 3 Lean Hogs % 4 Palladium % 5 Zinc % 6 Feeder Cattle % 7 Heat Oil % 8 Platinum % 9 Copper % 10 Coffee % 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