Weekly Market Review. December 6, 2015 December 12, 2015

Transcription

1 Weekly Market Review December 6, 2015 December 12,

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 core retail sales gained 0.6% in Nov after rising 0.2% in Oct. Overall retail sales inched up 0.2% vs. 0.1% in Oct Producer prices advanced 0.3% after falling 0.4% in Oct. However, it fell 1.1% in 12-months through Nov University of Michigan s preliminary index of consumer sentiment rose to 91.8 in Dec from 91.3 in Nov Initial jobless claims increased 13,000 to 282,000 for the week ended Dec 5, highest level since early Jul Eurozone GDP rose 0.3% in 3Q2015 after rising 0.4% in 2Q2015, bolstered by private consumption & govt. spending German industrial production edged up 0.2% in Oct after declining 1.1% in Sep. Production was unchanged YoY UK manufacturing output inched down 0.4% MoM in Oct, pointing toward a weak start for industry in 4Q2015 Ireland s economy grew 7.0% in the year ending Sep-2015 following a 5.2% expansion last year, best since 2007 Denmark s central bank & finance ministry cut their 2015 growth forecast to 1.4% from 1.8% & 1.5%, respectively Greece s jobless rate inched down to 24.6% in Sep from an upwardly revised 24.7% in Aug 2015 Japan revised its 3Q2015 GDP showing an annualized 1.0% growth vs. a preliminary estimate of 0.8% decline Core machinery orders jumped 10.7% MoM in Oct, the most since Mar 14 & following Sep s 7.5% growth China s exports fell for a 5 th month in Nov by 6.8% YoY (in US$ terms). Imports fell for a 13 th straight month by 8.7% Consumer inflation moved up 1.5% YoY in Nov vs. rising 1.3% in Oct, led by higher food & services prices Aggregate financing rose to yuan 1.02tn in Nov vs. a Bloomberg median forecast of yuan 970bn Russian state statistics service said economy contracted 4.1% YoY in 3Q2015, confirming an earlier trend South Africa s current-account deficit widened to 4.1% of GDP in 3Q2015 from 3.1% in 2Q2015 as imports increased Moody s put Brazil s credit rating on review for a possible downgrade due to recession & risk of political paralysis Brazil s consumer prices rose to a 12-year high of 10.48% in the 12-months through Nov vs. 9.93% in Oct Mexico s industrial output grew 0.5% YoY in Oct, the slowest pace in 5 months as oil sector shrank & manuf. cooled Venezuela s president said annual inflation is near 100% & the economy is likely to contract around 4% in 2015 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 4, Euro Stoxx FTSE 100 5, Dax 10, CAC 40 4, Nikkei , Hang Seng 21, Brazil - Bovespa 45, Russia - Micex 1, BSE Sensex 25, Shanghai Comp 3, Page I 3

4 GCC EQUITIES UAE-based Finance House raised AED300mn worth Tier I capital. The issue was structured as Mudaraba Sukuk Emirates Nat. Oil Co. said retail expansion in the UAE & KSA will boost food & beverage revenue over 100% in 2016 Drake & Scull Engineering won an AED245mn mechanical, electrical & plumbing works for a project in Abu Dhabi Abu Dhabi Financial Group said the company is looking at potential acquisitions in its home market in 2016 Emirates REIT entered into an AED400mn Islamic finance agreement with the Abu Dhabi Commercial Bank Abu Dhabi National Energy Co. completed the Fujairah 1 desalination plant expansion, raising its capacity by 30% French sovereign fund and other leading companies acquired shares worth SAR563mn in the Kingdom Holding Co. Saudi Aramco is reportedly seeking a $4.7bn loan for an oil refinery it developed in joint venture with China Saudi ORIX Leasing announced the redemption of its 2012 Sukuk certificates at face value on Dec 26, 2015 Bupa Arabia For Cooperative Insurance s shareholders approved increasing capital from SAR400mn to SAR800mn Saudi Electricity Co. inked a deal with the Export-Import Bank of Korea for up to $3bn of loans over the next 3 years Global conglomerate 3M started construction of its largest Middle East & Africa region manuf. unit in Saudi Arabia Arab National Bank s board of directors recommended the distribution of 5.5% dividend (SAR550mn) for 2H2015 Abdullah Al-Khodari Sons withdrew its rights issue application due to current market conditions; said contracts worth SAR315.3mn with Northern Borders University have remained unsigned as per government directives Oman Power & Water Procure. Co. will build 3 independent water projects in Oman with 2.4mn m 3 /day capacity The Commercial Bank signed a new $1bn 3-year term loan to refinance existing debt and for general purposes Qatar First Bank plans to list its shares on Qatar Exchange by 1Q2016-end for trading, without raising new funds Bahrain s Investcorp acquired a portfolio of properties in Atlanta, San Francisco and Boston for around $400mn Aluminium Bahrain said its $3.5bn 6 th potline construction will begin in 2016, metal production expected by Jan 19 Bahraini government will award $1.1bn Bahrain International Airport expansion project within the next 6-8 weeks Last Close 5 Day % YTD % P/E (2015) *Div. Yield Dubai 2, Abu Dhabi 4, Saudi Tadawul 6, Qatar Index 10, Kuwait Index 5, Oman MSM 30 5, Bahrain All Share 1, Egypt EGX 30 6, Istanbul 100 Index 70, ; *Current DFMGI 1 year performance Saudi Tadawul 1 year performance Page I 4

5 CURRENCIES The US dollar weakened against major peers during the week, with USD index slipping 0.80%. The greenback was hurt by slumping commodities and market volatility concerns which overshadowed healthy US data The Canadian dollar depreciated 2.95% against US dollar in the week ended Dec 11, its worst week since Jan 2015 as tumbling crude-oil prices undermined the commodity currency Chinese yuan lost 0.82%, recording its biggest weekly drop since an Aug 2015 devaluation on speculation China s central bank is taking advantage of a stronger dollar to allow a decline before the US raises interest rates Brazil s real weakened 3.21% from Dec 4 against US dollar amid speculation that tension between Finance Minister Joaquim Levy and Planning Minister Nelson Barbosa over fiscal policy is heating up again, adding another hurdle to passing measures needed to shore up the budget and restore growth Russian ruble slumped 3.44% against US dollar this week to the lowest since Aug 2015 as crude oil s slide below $40 per barrel prompted the central bank to keep interest rates on hold to avoid stoking inflation Indian rupee slipped 0.31% during the past five days against US dollar to the lowest level in over 2 years. Fresh dollar demand from importers led by capital outflows and decline in local equities largely weighed on the rupee 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 Korea s won posted the biggest weekly loss since Sep 2015, falling 2.0% to 1, per US dollar as a slump in crude oil prices and a looming US interest-rate increase damped risk appetite EUR/USD 1 year performance GBP/USD 1 year performance Page I 5

6 COMMODITIES Brent and WTI crude recorded biggest weekly decline of 2015, dropping 11.8% & 10.9%, respectively. A report from the International Energy Agency said global inventories will swell by 300mn barrels in The report also said world oil demand will slow to 1.2mn barrels per day in 2016 as support from sharply falling oil prices begins to fade Spot gold prices fell 1.1%, recording a seventh week of drop out of the last eight weeks as investors positioned for a likely US rate hike by the Federal Reserve in its two-day policy-setting meeting on Dec 15-16, 2015 New York Mercantile Exchange s Comex division copper futures advanced 1.6% this week on support from a slumping dollar and optimism surrounding recent supply-cut announcements by large mining companies The Intercontinental Exchange (ICE) orange juice futures jumped 7.25% during the past five days after the US Department of Agriculture cut its forecast for the Florida orange crop by 6.8% to the lowest in 52 years 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 Bursa Malaysia Derivatives exchange (MDE) palm oil futures rose 1.5% in the week as forecasts of rain in key producing areas heightened concerns over supply disruptions in the monsoon season The ICE sugar futures dropped 5.8% from Dec 4 as signs of softer demand triggered an exodus of bullish traders. The weakening of the currency of Brazil, the largest sugar exporter, also played a role as it encourages more export The Baltic Exchange s main sea freight index tracking rates for ships carrying dry bulk commodities declined ~7.3% this week on the back of low vessel demand across nearly all vessel sizes WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES US 10-year bond yield dropped 14.2 basis points (bps) in the week ended Dec 11 to 2.13% as new stress in a number of riskier markets drove investors piling into the safety of the US government bonds German, French and Italian yields posted their biggest weekly declines in at least a month, a turnaround from last week, suggesting initial reaction to the ECB s Dec 3 policy measures may have been overdone. German 10-yr yield slid 13.8 bps to 0.54%, French 10-yr yield fell 14.1 bps to 0.86% while Italy s 10-yr yield dipped 11.5 bps to 1.54% The Bank of England kept interest rates on hold at 0.5%, where they have been since March 2009, on Dec 10 amid expectations that inflation will remain low after another sharp fall in the oil price and a leveling off in wage growth The Swiss National Bank kept its target range for three-month Libor at between -1.25% & -0.25% on Dec 10 and said it would remain active if necessary in the currency market to weaken the significantly overvalued Swiss franc Russia s central bank left its benchmark one-week auction rate unchanged at 11% for a third consecutive meeting on Dec 11 as a slump in oil prices triggered a new bout of ruble weakness, raising the risk of faster inflation Peru s central bank raised the benchmark interest rate to 3.75% on Dec 10 as widely expected, its second hike in four months as it tries to tame inflation stoked by the sol currency s depreciation 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 Korea left its benchmark seven-day repurchase rate at 1.5% for a 6 th consecutive month on Dec 10, opting to wait for the US Fed s anticipated rate increase and assess its effects on the global economy and markets 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 14.39% 14.39% 2 Jamaica 6.07% 5.80% 3 Jordan 2.16% 2.20% 4 Pakistan 1.04% 2.03% 5 Kenya 1.00% 1.07% 6 Malta 0.42% 1.39% 7 Colombia 0.37% -3.52% 8 Bulgaria 0.28% 1.33% 9 Zambia 0.13% -1.72% 10 Botswana 0.00% -4.21% Ref Country YTD Change YTD Change (USD Adj.) 1 Venezuela % % 2 Jamaica 86.45% 77.75% 3 Argentina 48.96% 29.05% 4 Latvia 42.82% 29.69% 5 Hungary 39.03% 25.81% 6 Malta 34.69% 22.31% 7 Slovakia 32.81% 20.60% 8 Denmark 29.73% 17.59% 9 Ireland 26.87% 15.20% 10 Estonia 19.28% 8.32% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Namibia % % 2 Dubai UAE -8.10% -8.10% 3 Luxembourg -6.71% -5.81% 4 Poland -5.93% -6.11% 5 Sweden -5.67% -5.89% 6 Turkey -5.37% -8.21% 7 Greece -4.82% -3.90% 8 UK -4.58% -3.94% 9 Italy -4.57% -3.65% 10 Spain -4.45% -3.52% Ref Country YTD Change YTD Change (USD Adj.) 1 Ukraine % % 2 Peru % % 3 Greece % % 4 Namibia % % 5 Colombia % % 6 Egypt % % 7 Poland % % 8 Dubai UAE % % 9 Cyprus % % 10 Nigeria % % Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Orange Juice 7.25% 2 Lumber 3.45% 3 Wheat 2.44% 4 Lead 2.43% 5 Copper 1.64% 6 Palm Oil 1.51% 7 Gasoline 0.89% Ref Commodity YTD Pct Change 1 Cocoa 15.05% 2 Orange Juice 7.18% 3 Cotton 3.32% 4 Sugar 0.41% Ref Commodity Weekly Change 1 Heat Oil % 2 Brent Crude % 3 WTI Crude % 4 Natural Gas -8.97% 5 Gasoil -8.21% 6 Sugar -5.81% 7 Steel Rebar -4.76% 8 Coffee -4.76% 9 Feeder Cattle -4.59% 10 Bean Meal -4.52% Ref Commodity YTD Pct Change 1 Nickel % 2 Steel Rebar % 3 Heat Oil % 4 Brent Crude % 5 WTI Crude % 6 Palladium % 7 Natural Gas % 8 Lean Hogs % 9 Feeder Cattle % 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