Weekly Market Review September 14, 2014 September 20, 2014

Transcription

1 Weekly Market Review September 14, 2014 September 20, 2014 September 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 Fed announced a further $10bn reduction in its monthly bond purchases, renewed its pledge to keep interest rate near zero for a considerable time, but indicated rates may rise faster than expected, when it starts moving Consumer prices slid 0.2% in August, 1 st time in nearly 1-1/2 years Homebuilders sentiment hit a near 9 year high in Sept., builders reported sharp pick up in buyer traffic Factory production dropped 0.4% in August as motor vehicle production fell sharply US housing starts declined 14.4% and permits fell 5.6% in August. However, July s data was revised upwards, suggesting housing market continued to gradually improve Fitch ratings affirmed AAA credit rating of US while maintaining its Stable outlook Organization for Economic Cooperation and Development slashed Euro zone growth forecast from 1.2% to 0.8% in 2014 while projection for US growth was reduced to 2.1% from earlier 2.6% for 2014 Inflation in Euro zone rose 0.1% MoM in August. YoY inflation rose 0.4%, higher than initial estimate of 0.3% Trade surplus rose to 21.2bn in July from 18bn in July 2013 as exports rose 0.3% while imports rose 1% IMF predicted a de-growth in Italy s GDP by 0.1% in 2014, cutting its previous forecast of 0.3% growth Moody s Investors Service affirmed France s Aa1 credit rating and kept the rating outlook Negative UK survived Scottish independence referendum after 55.3% voters supported No with 44.7% backing split Japan's government cut its economic assessment for the 1 st time in 5 months on pausing private consumption Trade deficit stood at 948.5bn Yen, 26 th month of deficit in a row as exports fell 1.3% YoY in August Average new home prices across China fell 1.1% in August versus 0.9% drop in July, adding to economic gloom Chinese embassy official in India said that China and India will sign a $6.8bn deal to establish two industrial parks The Thomson Reuters/INSEAD Asia Business Sentiment Index fell to 66 in the 3Q2014 from 74 in 2Q2014 on China s slowdown worries, end to US stimulus policy and decline in the outlook for regional economic hubs like Singapore 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 24, Brazil - Bovespa 57, Russia - Micex 1, BSE Sensex 27, Shanghai Comp 2, S&P year performance Euro Stoxx year performance Page I 3

4 GCC EQUITIES Mashreq bank said it has no interest in purchasing Standard Chartered UAE assets, but is open to acquisitions in Egypt and Turkey Fitch Ratings upgraded Al Hilal Bank s Viability rating from bb- to bb. Outlook was affirmed at Stable Investment Corporation of Dubai and Kerzner International Holdings will build a $1.4bn expanse of lavish suites and residences next to Dubai s Atlantis resort Etihad Airways plans to raise about $2bn in loans in 2014 to fund its equity investments and aircraft purchases Abu Dhabi listed investment firm, Waha Capital, plans to buy back up to 10% of its outstanding shares Emaar properties said it received sufficient orders to cover the entire tranche allocated to the qualified institutional investors within the range of AED per share. It plans to raise AED5.8bn from IPO UAE based Ithmar Capital has picked Credit Suisse and Deutsche Bank to manage $436mn Dubai IPO Omniyat plans to launch 3 mega-projects worth AED3.5bn during the upcoming property show in Dubai Dubai based district cooling services provider, Empower, secured a $127.8mn financing from Dubai Islamic Bank Abu Dhabi based Mubadala posted a 23% rise in 1H2014 profit to AED1.34bn on higher JV income and one-off gains S&P Dow Jones will upgrade Qatar and the UAE from frontier indices to emerging markets on September 22, 2014 The Emirate of Ajman plans to develop a new international airport with an investment of AED2.1bn Saudi based Savola group signed an agreement to sell its entire stake in Masharef Project for SR593.5mn Thailand based PTT tied up with Saudi Aramco in bid for building $22bn Vietnam refinery Qatar base Gulf Drilling International signed QR825mn rig deal with Singapore based Keppel FELS Ooredoo Kuwait, 92% owned by Qatar s Ooredoo, cut 165 jobs as its market share shrinks and profits fall Qatar National Bank acquired an additional 11% stake in Ecobank Transnational for about $283mn Bahrain based Investcorp acquired a portfolio of office and industrial properties in US for $250mn Last Close Change 5 Day % YTD % Dubai 5, Abu Dhabi 5, Saudi Tadawul 11, Qatar Index 14, Kuwait Index 7, Oman MSM 30 7, Bahrain All Share 1, Egypt EGX 30 9, Istanbul 100 Index 76, DFMGI 1 year performance Saudi Tadawul 1 year performance Page I 4

5 CURRENCIES The US currency gained 1% to $ per euro, the strongest since July 10, 2013 as Federal Reserve signaled interest rates will rise next year while other central banks pushed stimulus plans The UK currency rose 1.3% in the week to pence per euro as Scotland voted to keep the UK s 307 year old union intact, dousing concern a separatist win would delay Bank of England plans to raise interest rates Yen depreciated 1.6% to per dollar after Bank of Japan Governor Haruhiko Kuroda said he won t hesitate to adjust monetary policy if needed to spur inflation. It touched , the weakest level since Aug. 29, 2008 Brazil s real declined 1.25% in the week as a voter poll showed a drop in voter support for Marina Silva as President Dilma Rousseff defended her economic and fiscal policies before the October election Malaysia s ringgit weakened 1.1% over the past five days to per dollar after Bank Negara Malaysia left its key rate unchanged at 3.25% Indonesia s rupiah declined 1.3% in the week to close at 11,968 per dollar as overseas investors sold $195mn more shares than they bought in the first four days of the week, the most since December 2013 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 The Bloomberg-JPMorgan Asia Dollar Index, which tracks 10 regional currencies excluding the yen against the greenback, fell 0.2% in the week to The prospect of higher US interest rates dimmed the appeal of emerging-market assets EUR/USD 1 year performance GBP/USD 1 year performance Page I 5

6 COMMODITIES Gold fell more than 1%, it s third straight weekly drop as equities surged to a record, crimping demand for the precious metal as an alternative asset whereas silver slumped 4.4% to four year low Brent crude closed above $98 a barrel, rising 0.4% in the week, as OPEC talk of a production cut balanced worries about ample supply at a time of fragile demand Cocoa surged 6% in the week on speculation that the spread of Ebola may derail deliveries from West Africa, the world s top producing region Soybean, corn and wheat futures fell 12.3%, 2.2% and 4.8%, respectively, amid prospects for record global crops and decreasing demand for supplies from the US, the world s biggest exporter ICE cotton slumped 6.5% in the week after an industry website reported that Beijing may link a large amount of import quota to domestic cotton purchases, a move expected to crimp demand for foreign fiber in China 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 1, Nickel closed 3.4% down in the week as data from industry group on September 19, showed the global nickel market was in a 5,200 ton surplus in July as compared to a 4,800 ton deficit in June WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES US Treasury debt prices rose as traders took advantage of recent rise in yields to do some bargain hunting. Yield on 10 year note fell 3.6 bps in the week to 2.57%. US will sell $93bn worth of fixed rate notes starting September 23 US five year, 30 year yield curve narrowed to 1.47% after the Federal Reserve signaled it will raise short term interest rates in 2015 while inflation remained below the central bank s target UK two year yield rose 0.06% to 0.89% whereas 10 year yield declined 1.5 bps to 2.54% as Scotland s rejection of independence from the union put the focus back on to when the Bank of England will raise interest rates Spanish 10 year yields fell 14 bps in the week to 2.20% as markets viewed Scotland's "No" vote in its independence referendum as having reduced prospects of a stronger push for a breakaway in Catalonia German 10 year bunds dropped 4 bps to 1.04%, Italian 10 year yields declined 9 bps to 2.37% and Portuguese 10 year rates dell 6 bps to 3.17% after demand for the ECB s first targeted loan program came in below economist estimates, boosting speculation policy makers may resort to sovereign bond purchases to avert deflation 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 The yield on 10 year Chinese notes fell 25 bps in the week to 4.05% as the central bank cut the rate on 14 day repos by 20 bps and monetary authority provided nation s five biggest banks with 100bn Yuan each via 3-month loans Yield on Malaysia s 3 year sovereign bonds, the most sensitive to the policy outlook, fell 11 bps for the week to 3.5% as central bank kept the policy rate on hold after raising it in July, first time in more than three years 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 Argentina 4.77% 4.40% 2 Croatia 2.78% 1.72% 3 Dubai UAE 2.76% 2.76% 4 Venezuela 2.70% 2.70% 5 Egypt 2.67% 2.65% 6 Luxembourg 2.67% 1.61% 7 Ghana 2.37% 8.82% 8 Sweden 2.37% 1.92% 9 Japan Nikkei 2.34% 0.74% 10 Slovenia 2.29% 1.23% Ref Country YTD Change YTD Change (USD Adj.) 1 Argentina % 66.10% 2 Dubai UAE 51.28% 51.28% 3 Egypt 43.44% 39.35% 4 Qatar 38.26% 38.25% 5 Kazakhstan 36.00% 15.31% 6 Saudi Arabia 29.60% 29.60% 7 India 27.96% 30.01% 8 Slovenia 27.66% 19.17% 9 Denmark 25.59% 17.49% 10 Philippines 23.73% 23.46% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Ukraine -7.23% % 2 Cyprus -4.06% -5.05% 3 Russia -3.55% -3.55% 4 Vietnam -3.04% -3.07% 5 Australia -1.77% -3.00% 6 Canada -1.71% -0.55% 7 Hungary -1.49% -1.40% 8 Slovakia -1.48% -2.49% 9 Singapore -1.44% -1.54% 10 Kazakhstan -1.33% -2.29% Ref Country YTD Change YTD Change (USD Adj.) 1 Russia % % 2 Jamaica % % 3 Portugal -9.87% % 4 Malta -9.81% % 5 Austria -9.65% % 6 Estonia -6.59% % 7 Latvia -6.03% % 8 Mongolia -2.13% % 9 Greece -1.21% -7.78% 10 Malaysia -0.94% 0.34% Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Cocoa 6.02% 2 Natural Gas/ICE 3.71% 3 Gasoline 3.68% 4 Palm Oil 2.20% 5 Brent Crude 1.32% 6 Rough Rice 1.20% 7 Soybean Oil 0.93% 8 Zinc 0.59% 9 Copper 0.53% 10 Feeder Cattle 0.49% Ref Commodity YTD Pct Change 1 Coffee 60.79% 2 Feeder Cattle 38.33% 3 Nickel 27.88% 4 Lean Hogs 24.06% 5 Cocoa 20.30% 6 Live Cattle 15.71% 7 Palladium 13.19% 8 Zinc 10.71% 9 Aluminium 9.76% 10 Orange Juice 4.62% Ref Commodity Weekly Change 1 Bean Meal % 2 Soybeans % 3 Steel Rebar -8.55% 4 Ethanol -8.54% 5 Cotton -6.54% 6 Lumber -5.46% 7 Wheat -4.77% 8 Silver -4.33% 9 Nickel -3.40% 10 Palladium -3.18% Ref Commodity YTD Pct Change 1 Rubber % 2 Soybeans % 3 Bean Meal % 4 Natural Gas/ICE % 5 Cotton % 6 Steel Rebar % 7 Wheat % 8 Corn % 9 Palm Oil % 10 Rough Rice % 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