Weekly Market Review September 6, 2015 September 12, 2015

Transcription

1 Weekly Market Review September 6, 2015 September 12, 2015 September 13, 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 NFIB US small business optimism index edged up in Aug indicating economy is on a steady growth path in 3Q2015 Job openings climbed 430,000 from Jun to reach a record 5.8mn in Jul. Job openings rate stood at 3.9% University of Michigan s preliminary US consumer sentiment index fell to 85.7 in Sep from 91.9 in Aug Producer prices remained flat in Aug after moving up 0.2% in Jul amid falling oil & stronger dollar UN s FAO global food price index fell 5.2% MoM in Aug, hit by ample supplies, slump in oil and slowdown in China Eurostat revised up Eurozone s 2Q2015 GDP growth to 0.4% QoQ from 0.3%, 1Q2015 figure raised to 0.5% vs. 0.4% German industrial production rose 0.7% in Jul after dropping a revised 0.9% in Jun, signaling strong recovery French industrial production slipped 0.8% MoM in Jul, suggesting that economic recovery is struggling to take hold Italian industrial output gained 1.1% in Jul, a sign Eurozone s 3 rd biggest economy will continue to recover in 3Q 15 Sweden s economy advanced 1.1% QoQ & 3.3% YoY versus earlier estimate of 1% QoQ & 3% YoY growth in 2Q2015 S&P maintained Greece s sovereign rating at CCC+/C but warned of a downgrade if reforms are not implemented Japan s economy contracted an annualized 1.2% QoQ in 2Q2015, lower than 1.6% drop reported in Aug July current account surplus, not seasonally adjusted, reached 1.81tn, the largest in July since 2010 Machinery orders declined 3.6% in Jul after dropping 7.9% in Jun, puts pressure on BOJ for more stimulus China s National Bureau of Statistics revised 2014 economic growth lower to 7.3% from 7.4% earlier Forex reserves fell by $93.9bn in Aug to $3.557tn as govt. attempts to stabilize financial markets, yuan NDRC approved 2 railway projects worth yuan 70bn to support infrastructure projects to boost growth Trade surplus widened to $60.2bn in Aug vs. $43.0bn in Jul as exports fell 5.5% & imports slid 13.8% YoY S&P downgraded Brazil s sovereign rating to BB+, the highest junk rating, from BBB- with a negative outlook Fitch said Brazil, South Africa top list of nations at risk of credit rating downgrade due to slow growth, high deficits Mexico cuts 2016 growth forecast to % vs. Mar estimate of %, plans to reduce spending, fiscal deficit S&P year performance Euro Stoxx year performance Last Close 5 Day % ; *Current YTD % P/E (2015) *Div. Yield S&P 500 1, DJI 16, Nasdaq Comp 4, Euro Stoxx FTSE 100 6, Dax 10, CAC 40 4, Nikkei , Hang Seng 21, Brazil - Bovespa 46, Russia - Micex 1, BSE Sensex 25, Shanghai Comp 3, Page I 3

4 GCC EQUITIES First Gulf Bank has reportedly raised $1bn in loans in order to boost lending as liquidity in the economy tightens Dubai Islamic Bank Pakistan Limited plans to list its shares on the Karachi Stock Exchange by 1Q2016 Al Shafar General Contracting has reportedly hired Goldman Sachs to arrange for a potential IPO on the DFM Drake & Scull International secured two projects in Abu Dhabi and Kuwait for a combined value of AED96.1mn Egyptian Housing Ministry scaled back size of house building project with Arabtec to 100,000 homes from 1 million Aramex confirmed it is in talks with Orascom Telecom and Technology Holding to create 5 logistics area in Egypt Deyaar Development signed MoU with Millennium & Copthorne Hotels to develop new hotel projects in the UAE Union properties seeks to borrow around AED450mn to fund a 271-unit project in the Emirate Saudi Aramco reportedly seeks to raise $5bn loan to replace some of its capital in JV refinery built with Sinopec Savola Group signed a JV agreement with Thai Union Frozen Products to tap the Middle Eastern seafood market Ma aden is reportedly in talks with banks to raise up to $3bn loan to refinance debt taken for a phosphate JV Abdullah A.M. Al-Khodari renewed its existing Islamic facilities agreement with Riyad Bank worth SAR344.62mn Oman Oil Refineries & Petroleum Industries Co. plans to borrow to finance 70% of its $5.2bn Liwa Plastics project Towell Infrastructure Projects Co. won a contract worth $214mn to build infrastructure for new Liwa city project Al Jazeira Services received a preliminary offer to sell its entire stake in Al Anwar Ceramics for 370 baizas/share FTSE Russel promoted Qatar from the Frontier to Secondary Emerging Market in its September 2015 annual review Qatar Gas Transport Company (Nakilat) raised foreign ownership limit to 49% from existing 25% Hamad & Mohamad Al Futtaim-Voltas Qatar JV bagged QAR500mn contract for MEP work in Doha Festival City Mall Qatar-based Aamal Co. established a new subsidiary Aamal for Maritime Transportation Services GFH Financial Group decided to voluntarily delist from Kuwait Stock Exchange to focus on Dubai Financial Market Bahrain s Seera Inv. Bank announced sale of Danish LPG gas firm, Kosan Crisplant to a regional buyer for $63.5mn DFMGI 1 year performance Last Close 5 Day % YTD % P/E (2015) *Div. Yield Dubai 3, Abu Dhabi 4, Saudi Tadawul 7, Qatar Index 11, Kuwait Index 5, Oman MSM 30 5, Bahrain All Share Saudi Tadawul 1 year performance 1, Egypt EGX 30 7, Istanbul 100 Index 71, ; *Current Page I 4

5 CURRENCIES The Bloomberg US dollar spot index slipped 0.8%, recording 1 st weekly decline since Aug 21 as dollar fell against most of its major peers after a report showing flat US producer prices raised doubts about Fed raising rates in Sep British pound registered its biggest weekly gain versus the US dollar since June, rising 1.7% as an inflation survey supported the view of Bank of England officials' contention that UK economic growth is on track Offshore yuan appreciated 0.9% in the week to per US dollar, the biggest weekly advance since Mar amid speculation the People s Bank of China was acting to contain financial-market turmoil Brazil s real weakened 0.71% against US dollar in the week ended Sep 11 hit by fears of capital outflows accelerating from recession-hit Brazil as S&P downgraded the nation to below investment grade Australian dollar strengthened 2.5% against US dollar since Sep 4, thanks to a short-covering rally on the back of a appreciation in offshore yuan and stronger than expected employment data Malaysian ringgit depreciated 1.3% to per US dollar this week, falling for the 12 th straight week as slowing Chinese growth and prospects of a US interest-rate increase sapped demand for developing-nation 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 gained 0.7% to 1,184.5 per US dollar during the week, as odds for further monetary policy easing receded after Bank of Korea Governor Lee Ju Yeol said the current interest rate is supportive for the economy EUR/USD 1 year performance GBP/USD 1 year performance Page I 5

6 COMMODITIES US crude futures slipped 3.1% this week amid reports that indicated Saudi Arabia is not in favor of an emergency OPEC meet to stem oil price fall and as Goldman Sachs projected a steep fall in crude prices in near future Spot gold prices edged down 1.4% from Sep 4, recording a 3 rd successive weekly loss as uncertainty over the timing of the US Federal Reserve's first interest rate increase in nearly a decade weighed on appetite for the metal Comex copper futures jumped 6.1% in the week on speculation that output cuts by miners including Glencore Plc. will tighten supplies and approval of $11bn railway projects by China may spur new demand Chicago Board of Trade (CBoT) corn futures climbed 7.7% during the last five days after federal forecasters trimmed their estimate for US production this autumn following adverse weather in parts of the Midwest Tokyo rubber futures advanced 4.7% in the week ended Sep 11 led by a short-covering rally. Traders said market had been oversold last week while firmer Shanghai rubber prices lent support 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 Malaysian palm oil futures advanced 3.9% in the week on sustained buying by traders even as data from Malaysian Palm Oil Board showed higher production and inventory levels in Aug. Traders said demand will sustain as palm oil is fairly cheap currently as compared to other vegetable oils Spot palladium prices firmed 3.5% this week as protests disrupted output at an Anglo American Platinum Limited mine in South Africa, among the world s top suppliers of the metals WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES US 10-year bond yield moved 6.4 bps up in the week to 2.2% as higher oil prices and fresh corporate debt sales chipped away demand for the haven debt market. Analysts said investment grade corporate bond sales could top $100bn in Sep after 10 & 30-year debt auction worth $21bn & $13bn on Sep 9 & 10, respectively, saw solid demand The Bank of England left interest rate at a record low of 0.5% on Sep 10 saying its policymakers felt the threat to the world economy from China's stock-market slump did not signal a slowdown for Britain The Bank of Canada kept the benchmark rate unchanged at 0.5% on Sep 9 and said economic growth remains on pace as a weaker currency and household spending lead a recovery from the shock of lower oil prices The Russian central bank left its main lending rate on hold at 11% on Sep 11 following five successive cuts in 2015, with the severity of the ruble s plunge taking precedence over the intensifying recession for the central bank Brazil canceled an auction of local bonds for the 2 nd time in the week on Sep 11 as 10-year bond yield climbed 18 bps in the week to 15.27% following the cut in the nation s credit rating to junk by S&P Malaysia s central bank, Bank Negara Malaysia held the overnight policy rate for a 7 th meeting at 3.25% on Sep 11 as quickening inflation and a weakening currency reduced scope for the central bank to add stimulus 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 Indonesian sovereign bonds fell and 10-year yield surged 34 bps since Sep 4 to 9.22%, the highest level since May 2010 as the rupiah dropped amid worsening sentiment toward emerging 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 Latvia 14.00% 15.93% 2 Kazakhstan 7.16% -1.80% 3 Saudi Arabia 4.53% 4.53% 4 Qatar 4.46% 4.42% 5 Greece 4.21% 5.98% 6 Taiwan 3.81% 4.04% 7 Abu Dhabi UAE 3.64% 3.64% 8 Hong Kong 3.18% 3.19% 9 South Korea 2.93% 3.69% 10 Japan 2.65% 1.29% Ref Country YTD Change YTD Change (USD Adj.) 1 Venezuela % % 2 Malta 28.96% 20.86% 3 Jamaica 28.55% 23.99% 4 Denmark 27.90% 19.66% 5 Argentina 26.91% 14.88% 6 Hungary 26.75% 19.97% 7 Ireland 23.41% 15.66% 8 Latvia 21.74% 14.09% 9 Slovakia 19.57% 12.06% 10 Estonia 16.90% 9.56% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Venezuela -3.76% -3.76% 2 Egypt -3.52% -3.60% 3 Turkey -2.19% -3.39% 4 Jamaica -2.14% -2.74% 5 Philippine -1.99% -2.28% 6 Lebanon -1.44% -1.44% 7 Indonesia -1.24% -2.28% 8 Hungary -1.18% 0.64% 9 Mongolia -1.13% -1.32% 10 Cyprus -1.04% 0.64% Ref Country YTD Change YTD Change (USD Adj.) 1 Peru % % 2 Egypt % % 3 Greece % % 4 Colombia % % 5 Turkey % % 6 Indonesia % % 7 Nigeria % % 8 Singapore % % 9 Bulgaria % % 10 Slovenia % % Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Corn 7.69% 2 Rough Rice 6.82% 3 Lumber 6.27% 4 Copper 6.14% 5 Rubber 4.66% 6 Cocoa 4.30% 7 Wheat 4.16% 8 Palm Oil 3.94% 9 Palladium 3.53% 10 Nickel 3.52% Ref Commodity YTD Pct Change 1 Cocoa 11.62% 2 Rough Rice 9.66% 3 Cotton 6.34% Ref Commodity Weekly Change 1 Gasoline -4.68% 2 Heat Oil -4.25% 3 Orange Juice -3.84% 4 WTI Crude -3.08% 5 Lean Hogs -3.06% 6 Brent Crude -2.96% 7 Gasoil -2.53% 8 Coffee -2.45% 9 Platinum -2.11% 10 Gold -1.39% Ref Commodity YTD Pct Change 1 Nickel % 2 Coffee % 3 Palladium % 4 Lumber % 5 Steel Rebar % 6 Tin % 7 Platinum % 8 Sugar % 9 Wheat % 10 Lean Hogs % 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