Weekly Market Review January 4, 2015 January 10, 2015

Transcription

1 Weekly Market Review January 4, 2015 January 10, 2015 January 11, 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 Jobs in US rose by 2,52,000 in Dec 2014 after increasing at a revised 3,53,000 in Nov. Jobless rate fell to 6-1/2 year low of 5.6%. However, average hourly earnings fell by 0.2%, biggest decline recorded in at least eight years New orders for factory goods fell for a fourth straight month by 0.7% in Nov Services sector growth slowed as Institute for Supply Management s index fell to 56.2 from 59.3 in Nov Markit/JP Morgan s Global All-Industry Output Index fell to a 14-month low of 52.3 in Dec from 53.1 in Nov Markit s final Euro zone Composite PMI for Dec stood at 51.4 vs in Nov and lower than flash reading of 51.7 German industrial production fell 0.1% MoM in Nov, signaling the recovery in economy remains vulnerable Exports dropped more than expected 2.1% for a second consecutive month in Nov UK s NIESR estimates economy grew by 2.6% in 2014 vs. 1.7% in 2013, strongest full year performance since 2007 Factory production gained by 0.7% MoM in Nov while total industrial output fell 0.1% Switzerland s consumer prices declined 0.3% YoY in Dec after falling 0.1% in Nov, lowest since Oct 2013 Greece s jobless rate fell to 25.8% in Oct from an upwardly revised 26% rate in Sept and lowest since Aug 2012 China s factory-gate prices fell at sharpest rate of 3.3% YoY in 2 years in Dec, suggesting room for monetary easing Consumer annual inflation stood at a near five-year low of 1.5% in Dec. Prices rise 0.3% in Dec from Nov Japan approved $26bn extra budget for current fiscal to fund stimulus spending and pull economy out of recession Brazil recorded 6.41% annual inflation in 2014, just below the upper tolerance limit of 6.5% set by it s central bank Industrial output unexpectedly declined 0.7% MoM in Nov as production of durable goods fell sharply Fitch has cut Russia s rating to BBB minus from BBB citing significant deterioration in country s economic outlook Canada shed 4,300 job positions in Dec after losing 10,700 jobs in Nov. Jobless rate remained unchanged at 6.6% HSBC/Markit India Services sector PMI eased to 51.1 in Dec from a five-month high of 52.6 in Nov Mexico s annual inflation eased to 4.08% in Dec vs. 4.17% in Nov but was still above central bank s target of 4% 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 48, Russia - Micex 1, BSE Sensex 27, Shanghai Comp 3, S&P year performance Euro Stoxx year performance Page I 3

4 GCC EQUITIES HSBC UAE PMI for non-oil private sector edged up 58.4 in Dec from 58.3 in Nov as output rose strongly UAE utility Tabreed completed refinancing of AED2.6bn debt facilities, arranged by Abu Dhabi Commercial Bank UAE-based Massar Solutions plans to raise AED576mn through IPO of its 40% shares on Abu Dhabi exchange Kuwait awarded $4.2bn contract to develop heavy oilfields to Petrofac International and an Athens-based company Dubai Aluminium raised $1.8bn 7-year loan with around 15 local and international vendors for business purpose Dubai-based real estate developer, Limitless seeks more time from creditors as it failed to pay $400mn by Dec 31 Danube Group will issue main construction tender for its AED300mn residential project in next one month RAK Ceramics is in the process of selling assets in Sudan and Bangladesh. Expects to receive more than $50mn S&P affirmed Ras Al-Khaimah National Insurance Co. Counterparty credit and Insurer Financial Strength Rating Saudi Capital Market Authority approved Saudi British Bank capital increase approval from SR10bn to SR15bn Saudi-based Roots Group Arabia Co. hired Gulf International Bank to manage its SR1bn IPO Jabal Omar Development Co. secured a SR4bn loan from National Commercial Bank for a period of 15 years Saudi-based Acwa Power won a $2bn contract to build two solar plants totaling 350MW in southern Morocco Saudi-based Advanced Petrochemical Co. announced 24% YoY increase in 4QQ2014 net profit to SR200mn Qatar s Barwa Real Estate Co. acquired remaining 50% stake in Lusail Golf Development for QR2.48bn Qatar s Mesaieed Petrochem. announced QR1.1/share dividend resulting in QR1.38bn dividend distribution in 2014 Qatari Diar transferred its shares worth QR1.35bn in Al Khaliji Commercial Bank to Qatar Investment Authority Qatar Airways finalized an order for four Boeing 777 freighters valued at $1.24bn at current list prices Renaissance Services finalized equity partnership for its OMR75mn Permanent Accommodation project in Duqm Ooredoo Kuwait won a court appeal against a $124.97mn judgment in favour of the Ministry of Communications Bahraini sovereign fund, Mumtalakat signed a $500mn 5-year loan with a group of banks DFMGI 1 year performance Last Close Change 5 Day % YTD % Dubai 3, Abu Dhabi 4, Saudi Tadawul 8, Qatar Index 12, Kuwait Index 6, Oman MSM 30 6, Bahrain All Share Saudi Tadawul 1 year performance 1, Egypt EGX 30 8, Istanbul 100 Index 87, , Page I 4

5 CURRENCIES Japanese yen appreciated 1.7% in the week against dollar to per dollar as dollar slid after an unexpected drop of 0.2% in US wages added to speculation the Federal Reserve won t be in any hurry to raise interest rates Euro posted a fourth weekly decline and dropped 1.3% in the week to per dollar as industrial output declined in Germany, France and Finland UK pound fell 1.1% in the week to per dollar as economic data added weight to speculation that the UK recovery is too frail for the Bank of England to raise interest rates this year Canadian dollar weakened for a seventh week by 0.7% to per US dollar after employment unexpectedly shrank last month as US payrolls grew more than forecast, adding to speculation the Canadian economy is falling behind that of its biggest trade partner India s rupee completed its biggest weekly gain since May as it appreciated 1.5% to per dollar on optimism that demand for emerging-market assets will be sustained amid the prospect of further euro-area stimulus The Czech koruna lost 1.65% in the week to close at per euro as growing deflation risk drove speculation the central bank will try to weaken the currency. Data showed that Czech inflation slowed to 0.1% in Dec 2014 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 EUR/USD 1 year performance GBP/USD 1 year performance Page I 5

6 COMMODITIES Brent and West Texas Intermediate futures capped their seventh straight weekly decrease, falling 11.2% and 8.2%, respectively, on growing evidence that OPEC won t pare output to reduce a global supply surplus Gold gained 2.8% in the week on speculation that the Federal Reserve won t soon raise US interest rates, as wage gains lagging behind the pace of employment growth signal inflation remains tame Copper futures prices dropped 2.2% in the week as signs of slowing economic growth added to concerns that demand will dwindle in China, the world s biggest consumer of industrial metals Coffee futures gained nearly 12% in the week and ended at their highest level in a month as investors fretted about a new spate of dry weather in Brazil, supplier of one-third of world s coffee Cotton futures rose around 2% in the week to post strongest weekly performance in six weeks as mills continued to buy at relatively low prices and a dip in the US dollar provided some support 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 WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES US treasuries rose in the best start to a year since 1998, driving the 10-year yield down 16.6 bps in the week to 1.94%, as tumbling oil prices lower the outlook for inflation and combine with record-low global sovereign yields to bolster demand for US debt The Bank of England left its key interest rate unchanged at a record-low 0.5 % on January 8 as a weakening euro area holds back UK economic growth and impedes rebalancing Spanish bonds fell the most relative to German bunds since 2013 on speculation that rates at almost record lows don t offer value amid concern ECB stimulus will fall short of traders estimates. 10-year yield rose 23bps in the week to 1.72% Germany-based Commerzbank AG said a glut of supply in the first weeks of 2015 may dent the appeal of periphery bonds relative to German bunds. Euro-area governments sold around 28bn of bonds in the week, with Commerzbank predicting more than 30bn of supply next week. Irish and Italian bond fell, sending 10-year yield up 7 and 14 bps in the week 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 Brazil s swap rates declined 0.41 percentage points in the week to 12.48% after a report showing an inflation slowdown added to speculation that the central bank will limit further increases in borrowing costs 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 Vietnam 4.42% 4.50% 2 Slovakia 3.76% 2.38% 3 Morocco 3.63% 2.45% 4 Sri Lanka 3.50% 3.35% 5 Latvia 2.60% 1.24% 6 Slovenia 2.58% 1.21% 7 Turkey 2.56% 4.81% 8 Philippine 2.38% 2.05% 9 Thailand 2.12% 2.49% 10 Pakistan 1.81% 1.86% Ref Country YTD Change YTD Change (USD Adj.) 1 Vietnam 4.42% 4.50% 2 Sri Lanka 4.20% 3.97% 3 Morocco 3.88% 2.10% 4 Slovakia 3.76% 1.56% 5 Pakistan 3.71% 3.44% 6 Latvia 2.60% 0.43% 7 Philippine 2.38% 1.86% 8 Venezuela 2.38% 2.38% 9 Turkey 2.25% 4.05% 10 Thailand 2.12% 2.31% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Nigeria % % 2 Greece -6.78% -8.02% 3 Spain -6.10% -7.36% 4 Italy -4.98% -6.25% 5 Kazakhstan -4.46% -4.74% 6 Bulgaria -4.05% -5.32% 7 Colombia -3.85% -5.56% 8 Portugal -3.48% -4.76% 9 Cyprus -2.98% -4.28% 10 Peru -2.77% -3.13% Ref Country YTD Change YTD Change (USD Adj.) 1 Nigeria % % 2 Colombia -5.70% -7.28% 3 Greece -5.64% -7.64% 4 Spain -5.45% -7.45% 5 Kazakhstan -4.46% -4.83% 6 Italy -4.39% -6.41% 7 Bulgaria -4.05% -6.07% 8 Namibia -2.87% -2.22% 9 Peru -2.77% -2.99% 10 Dubai UAE -2.64% -2.64% Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Coffee 11.80% 2 Sugar 5.22% 3 Soybean Oil 4.98% 4 Soybeans 4.89% 5 Silver 4.82% 6 Nickel 3.17% 7 Gold 2.93% 8 Platinum 2.60% 9 Bean Meal 2.05% 10 Cotton 1.98% Ref Commodity YTD Pct Change 1 Coffee 8.07% 2 Silver 5.05% 3 Soybean Oil 4.91% 4 Gold 3.28% 5 Soybeans 3.16% 6 Palm Oil 2.97% 7 Sugar 2.69% 8 Platinum 2.10% 9 Cocoa 1.99% 10 Orange Juice 1.68% Ref Commodity Weekly Change 1 Brent Crude % 2 Gasoil -9.68% 3 Ethanol -9.45% 4 WTI Crude -8.22% 5 Gasoline -7.69% 6 Heat Oil -5.16% 7 Natural Gas -3.85% 8 Live Cattle -3.06% 9 Wheat -3.01% 10 Lean Hogs -2.80% Ref Commodity YTD Pct Change 1 Brent Crude % 2 Ethanol -9.28% 3 WTI Crude -9.22% 4 Gasoil -8.44% 5 Gasoline -7.81% 6 Heat Oil -7.78% 7 Natural Gas -7.37% 8 Wheat -4.41% 9 Copper -3.33% 10 Live Cattle -3.08% 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