Weekly Market Review December 14, 2014 December 20, 2014

Transcription

1 Weekly Market Review December 14, 2014 December 20, 2014 December 21, 2014

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 CPI fell 0.3% MoM after being flat in Oct and rose 1.3% YoY in Nov. However, Fed said it expects inflation to rise gradually to 2% target and signaled it was on track to raise borrowing costs by mid-2015 US initial jobless claims fell by 6,000 to 289,000 for the week ended Dec 13, suggesting strengthening labor market Conference Board Leading Economic index rose 0.6% in Nov, after a downwardly revised 0.6% gain in Oct Philadelphia Fed business activity index fell to 24.5 from 40.8 in Nov, showing factory activity grew at a slower pace US companies borrowed $6.8bn in Nov to spend on capital investment, down 8% YoY and 18% MoM Markit s US flash manufacturing PMI fell to 53.7 in Dec. Output sub index fell to 54.7 from 55.6 in Nov Markit s composite flash Euro zone PMI rose to 51.7 in Dec. Output sub index stood at 48, showing firms cut prices for 33 rd month GfK consumer sentiment index for Germany rose to 9 for Jan, the highest level in eight years, from 8.7 in December British inflation rose 1% YoY in Nov vs. 1.3% YoY increase in Oct, leaving BoE under no pressure to raise rates soon Markit s preliminary services PMI for France rose to 49.8 in Dec from 47.9 in Nov. Composite PMI rose to 49.1 Greece's jobless rate dropped to 25.5% in 3Q2014 vs. 26.6% in 2Q2014, the lowest rate recorded since 3Q2012 Asian Development Bank trimmed developing Asia s growth forecast from 6.2% & 6.4% to 6.1% & 6.2% in 2014 & 2015, respectively. However, it expects sliding oil prices to help economies in the region Japan s exports rose 4.9% YoY in Nov, less than forecasts and below 9.6% YoY gain of Oct, while imports slid 1.7% China s new home prices in 70 cities fell 3.7% YoY & 0.5% MoM in Nov, in spite of govt. relaxing lending rules in Oct HSBC/Markit flash manufacturing PMI fell to 49.5 in Dec as compared to a final reading of 50 in Nov Brazil central bank s economic activity index dropped 0.26% MoM in Oct, well below the forecasts of 0.2% increase India's trade deficit widened to an 18-month high of $16.86bn in Nov, led by higher gold imports IMF said Nigeria s growth will slow to 5% in 2015 on declining oil prices and depreciating currency Last Close Change 5 Day % YTD % S&P 500 2, DJI 17, Nasdaq Comp 4, Euro Stoxx FTSE 100 6, Dax 9, CAC 40 4, Nikkei , Hang Seng 23, Brazil - Bovespa 49, , Russia - Micex 1, BSE Sensex 27, Shanghai Comp 3, S&P year performance Euro Stoxx year performance Page I 3

4 GCC EQUITIES Dubai-government controlled property developer, Limitless plans to sell land in Dubai to repay $1.2bn loan Abu Dhabi Islamic Bank finalized an AED1bn finance facility to Baniyas Investment & Development Company Aldar Properties said it will cut its debt by 1/3 rd over the next two years, from current AED9.6bn to around AED6bn Dubai-based property developer Nakheel said it would propose a plan to restart $550mn project in Vietnam DP World shareholders approved buying Economic Zones World from Dubai World for $2.6bn and delist from LSE Dubai Aluminium is reportedly seeking $1.8bn loan for 7 years to fund expansion Kellogg again raises its offer to EGP86.36/share vs. Abraaj s offer of EGP84.66/share to acquire Egypt s Bisco Misr Drake & Scull International s BoD will discuss proposal to buy bank 10% of its share capital at the 7 th board meeting Drake & Scull Engineering won an AED82.5mn healthcare project in Abu Dhabi Stock exchanges of Dubai and Bahrain will introduce new & simplified way of share transfer between them in 2015 Saudi Hollandi Bank recommended SR952.6mn capital increase & SR1/share cash dividend for 2014 worth SR476mn Abdullah Al-Khodari Sons signed contract with Taibah University for constructing two colleges worth SR228mn Qatar s Barwa Real Estate won QR750mn contract from Manateq to build, operate & transfer low cost warehouses Qatar-based Ezdan Holding Group approved the proposal to raise foreign ownership limit to 49% from current 25% Qatar s Gulf Warehousing Co. won QR685mn contract to build Bu-Sulba Logistics Hub aimed to serve SMEs in Qatar AM Best affirmed Bahrain National Insurance Co s financial strength and issuer credit rating with stable outlook Orpic signed EPC contract and financing agreements with two Spain-based firms and Ahli Bank & Ahli United Bank, respectively, for $320mn Muscat-Sohar pipeline project Haya Water plans to invest OMR117mn to roll-out fiber optic cabling across its water reuse network in Muscat Bank of Bahrain and Kuwait announced it exited its 24% stake in Saudi Mais For Medical Products Limited Last Close Change 5 Day % YTD % Dubai 3, Abu Dhabi 4, Saudi Tadawul 8, Qatar Index 11, Kuwait Index 6, Oman MSM 30 5, Bahrain All Share 1, Egypt EGX 30 8, Istanbul 100 Index 83, DFMGI 1 year performance Saudi Tadawul 1 year performance Page I 4

5 CURRENCIES US dollar advanced 1.9% in the week to USD per euro after Federal Reserve chief Janet Yellen signaled that the central bank is poised to increase interest rates starting as early as April 2015 Japanese yen weakened 0.6% in the week to per dollar after the Bank of Japan said in a statement on December 19 that it will boost its monetary base at an annual pace of JPY80tn Chinese Yuan weakened 0.5% in the week to per dollar after economic data released in the week fueled concerns that the world s second-largest economy is losing momentum Russian ruble plunged more than 11% on an intraday basis on December 16 to hit a record low of 80 per dollar, led by falling oil prices. However, it recovered and closed 2.3% down in the week against dollar after Finance Minister Anton Siluanov confirmed govt. sold foreign currency, and on expectations that exporters will increase dollar sales. Asian currencies retreated in the week, led by Indian rupee which fell 1.6% to 63.3 per dollar, as Russian ruble plunged to a record and global funds pulled more than $3bn from stock markets in South Korea, Taiwan and India Canadian dollar fell 0.2% in the week to C$1.16 per dollar after a report showed inflation slowed more than forecast in Nov, adding to speculation slumping crude-oil prices will damp economic growth and keep interest rates low for longer 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 Colombia s peso appreciated 4.5% in the week to 2, per dollar, led by a stabilization in the price of crude oil, the Andean nation s biggest exports EUR/USD 1 year performance GBP/USD 1 year performance Page I 5

6 COMMODITIES Crude oil futures logged their fourth consecutive weekly loss as Brent futures lost 1.2% while WTI futures were down 1.6% amid a supply glut and weak global demand Gold declined 2.1% in the week as the dollar firmed and investor appetite for risk increased on expectations of rising US interest rates Lead futures lost 5.8% in the week amid signs of slowing economic growth in China, world s biggest metals consumer Tin futures lost 6% in the week as French bank Societe Generale estimated supply will be about enough to meet demand in 2014 and 2015, while Myanmar has emerged as a new source for China amid restricted output from top exporter Indonesia 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 Cocoa futures rose 3.08% in the week on chart-based buy signals and concerns about how Olam International's expansion will impact supplies. Olam International, a leading agri-business agreed during the week to buy Archer- Daniels-Midland Co. s cocoa business for $1.3bn to become a top-three processor of beans Baltic dry index lost around 7% in the week as rates for capesize and panamax vessels continued to plunge. A glut of iron ore and a decline in China s coal imports are also contributing to the fall WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES The 10-yr US yield gained 8 bps in the week to 3.85% after Federal Reserve chief Janet Yellen suggested an interestrate increase in April 15 has not been ruled out as economic growth leads the central bank to wind down stimulus UK government bonds fell and 10-yr yield climbed 5 bps in the week to 1.85% amid speculation that the yields the securities offer are not attractive enough given the nation s improving prospects Spain s 10-year yield dropped 18 bps in the week to 1.7% on the prospects that the European Central Bank will start sovereign-debt purchases in 2015 Switzerland s central bank that it would impose an interest rate of -0.25% from Jan 22, 2014 on the cash commercial banks and other financial institutions hold with the central bank, above a certain threshold The 10-yr Indian bonds fell and yield rose 9.3 bps in the week to 7.96% amid concern demand for emerging-market assets will suffer as global growth falters and investors prepare for higher US interest rates Russian central bank raised its key interest rate to 17% from 10.5% on Dec 16 in an emergency move to halt a collapse in the ruble as oil prices decline and the country's sanctions-hit economy slides toward recession 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 Colombia s central bank kept its benchmark interest rate unchanged at 4.5% as a construction boom sustains demand amid a slump in the price of crude oil. The bank also said it won t buy more dollars 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 Ukraine 7.22% 6.78% 2 Norway 6.24% 6.05% 3 China 5.80% 5.24% 4 Colombia 5.74% 10.77% 5 Canada 5.37% 5.20% 6 Greece 4.60% 2.64% 7 United Kingdom 3.88% 3.29% 8 Tunisia 3.63% 2.90% 9 Brazil 3.44% 3.23% 10 United States 3.41% 3.41% Ref Country YTD Change YTD Change (USD Adj.) 1 Argentina 48.81% 13.45% 2 China 46.91% 42.97% 3 Venezuela 38.96% 38.96% 4 India 29.29% 26.23% 5 Egypt 23.84% 20.36% 6 Turkey 23.26% 14.51% 7 Pakistan 22.76% 28.52% 8 Sri Lanka 22.66% 22.28% 9 Denmark 21.57% 8.49% 10 Philippine 20.98% 19.97% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Kazakhstan % % 2 Egypt -8.67% -8.63% 3 Cyprus -6.67% -8.41% 4 Vietnam -5.57% -5.51% 5 Hungary -5.40% -9.39% 6 Qatar -5.28% -5.30% 7 Bulgaria -5.03% -6.82% 8 Dubai UAE -4.68% -4.68% 9 Kenya -4.48% -4.43% 10 Serbia -4.10% -5.49% Ref Country YTD Change YTD Change (USD Adj.) 1 Russia % % 2 Nigeria % % 3 Greece % % 4 Portugal % % 5 Kuwait % % 6 Oman % % 7 Austria % % 8 Cyprus % % 9 Hungary % % 10 Malta % % Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Rubber 5.22% 2 Corn 3.60% 3 Cocoa 3.08% 4 Coffee 0.98% 5 Wheat 0.76% 6 Cotton 0.58% 7 Steel Rebar 0.53% 8 Palm Oil 0.28% 9 Lumber 0.09% 10 Soybean Oil 0.00% Ref Commodity YTD Pct Change 1 Coffee 57.81% 2 Feeder Cattle 32.06% 3 Live Cattle 19.52% 4 Palladium 12.55% 5 Nickel 12.23% 6 Cocoa 10.00% 7 Zinc 7.89% 8 Aluminium 5.90% 9 Orange Juice 4.62% 10 Wheat 4.46% Ref Commodity Weekly Change 1 Natural Gas -8.72% 2 Nickel -6.45% 3 Lean Hogs -6.43% 4 Silver -6.04% 5 Tin -6.00% 6 Lead -5.81% 7 Ethanol -5.59% 8 Orange Juice -5.43% 9 Bean Meal -4.06% 10 Gasoil -3.05% Ref Commodity YTD Pct Change 1 Brent Crude % 2 Gasoline % 3 WTI Crude % 4 Gasoil % 5 Heat Oil % 6 Rubber % 7 Cotton % 8 Natural Gas % 9 Soybeans % 10 Steel Rebar % 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