BEMO WEEKLY INSIGHTS I EQUITY MARKETS

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1 BEMO WEEKLY INSIGHTS I EQUITY MARKETS INTERNATIONAL MARKETS INDICES Last Price WTD % YTD % 10D Vol World % 0.47% 3.11% Developed % 1.73% 3.07% Emerging % -8.29% 2.17% Frontier % -9.38% 0.48% Europe % -1.08% 1.85% Latin America % -9.31% 5.31% Asia Pacific % -4.81% 0.88% INTERNATIONAL EQUITY INDICES Last Price Daily % YTD % 10D Vol EuroStoxx % -2.84% 4.05% FTSE % -0.68% 0.62% CAC % 1.52% 3.47% DAX % -4.47% 3.96% Swiss SMI % -4.27% 3.26% Nikkei % -3.99% 5.46% CSI % % 0.06% INTERNATIONAL MARKETS INDICES Last Price WTD % YTD % 10D Vol Major Indices DowJones % 2.40% 0.66% S&P % 0.00% 0.55% Nasdaq % 0.00% -3.09% Sectors Indices Discretionary % 14.19% 0.17% Staples % -6.98% 0.13% Energy % 3.89% -1.40% Financials % -0.02% 2.61% Healthcare % 8.37% 0.95% Industrials % -1.10% -0.21% IT % 15.83% -4.30% Materials % -2.90% 2.67% Telecom % -8.35% -2.60% Utilities % 0.37% -0.35% Real Estate % -0.40% 1.62% Major benchmark indices ended mixed for the week, witnessing a downturn on Friday as markets reacted negatively to the imposition of U.S sanctions on Turkey and the subsequent defiant speech by President Erdogan. The announcement of a supplementary 25 percent tariffs on $16 billion worth of Chinese goods further contributed to a souring mood on Wall Street. Large-cap indices recorded losses, while the technology heavy Nasdaq Composite and smaller-cap benchmarks moved slightly higher. Within the S&P 500, consumer staples and real estate lagged behind. On a positive note, momentum early in the week was largely attributed to favorable Q2 earnings. Earnings for the S&P 500 are anticipated to have grown over 24 percent for the same quarter a year ago according to FactSet, topping estimates and resulting in one of the best quarters in nearly eight years. What began as a positive week for European equities was reversed following the announcement that the U.S is doubling tariffs on steel and aluminum for Turkish imports in response to the jailing of an American pastor. The news sent the Turkish Lira plummeting and caused most European equities to end the week lower, with banks suffering the steepest losses. The Eurozone s chief financial watchdog also raised concerns regarding the exposure of some of the biggest banks to Turkey, most notably BBVA, UniCredit and BNP Paribas. German and French benchmarks, the DAX 30 and the CAC 40, ended the week with losses of more than 1 percent. Italy s benchmark ended over 2 percent lower for the week as uncertainty regarding budget negotiations for the new government also weighed in. Japanese stocks recorded an overall loss for the week, with the Nikkei 225 roughly one percent lower following mixed cues from Wall Street and a stronger Yen despite better than expected economic data in Japan. INDICES PERFORMANCE VS VOLATILITY SECTORS PERFORMANCE VS VOLATILITY

2 BEMO WEEKLY INSIGHTS I FOREIGN EXCHANGE FOREIGN EXCHANGE MARKET Last Price WTD % 10D Vol 25RR Major USD Cross Rate USD Index % 0.15% - EUR/USD % -0.05% USD/JPY % -1.85% GBP/USD % -0.04% USD/CAD % -0.38% AUD/USD % -0.31% NZD/USD % -0.04% USD/CHF % 0.05% USD/NOK % 0.05% USD/SEK % 0.00% USD/CNY % 0.41% Major EUR Cross Rate EUR/GBP % -0.01% EUR/CHF % -0.22% EUR/JPY % -1.65% FX PERFORMANCE VS VOLATILITY MARKET COMMENTARY The U.S dollar was one of the strongest performers last week as expected. Buoyed by a flight to safety following the crisis in Turkey and Russia and the subsequent waning of risk appetite across the financial markets, the U.S dollar stood at a 14-month high. Looking forward, retail sales and consumer confidence data figures are sure to influence the Federal Reserve s policy expectations. The dollar s strength negatively impacted its rival peers. The Euro closed lower last week as fresh concerns emerged on the Eastern front with the Turkish lira in freefall. Investor sentiment largely centered on European banks exposure to the Lira which weighed in negatively on the single currency. Turkish borrowers owe Spanish, French, and Italian banks over $100 billion combined which, are speculated to be inadequately hedged against the devaluation of the lira, fueling the probability of default. The Turkish lira took a near 20 percent plunge on Friday. The market continued to push the British pound lower last week as the GBPUSD cross hit a one-year low around Looking forward, inflation and wages figures could provide much-needed respite for the Sterling while talks of EU concession in Brexit negotiations regarding the trade of goods and freedom of movement could also boost the pound. The Chinese Yuan slid for the ninth-straight week amid the broader currency woes caused by Turkey s financial troubles. The decline marks the currency s longest losing streak since China adopted its current foreign exchange regime in DISTANCE FROM 52 WEEKS LOW/HIGH 25 RISK REVERSAL

3 BEMO WEEKLY INSIGHTS I FIXED INCOME GLOBAL BOND INDICES Yield Yield (in Bps) Benchmark Indices US 10 Years Benchmark EU 10 Years Benchmark UK 10 Years Benchmark Sovereign Bonds US Treasury Bond Eurozone Sovereign Bond Japan Sovereign Bond Corporate Bonds US Investment Grade Bond US High Yield Bond EUR Investment Grade Bond EUR High Yield Bond USD Emerging Market IG & HY DAYS HIGH YIELD VS INVESTMENT GRADE A flight to safety ensued on Friday following the commotion in Turkey, with the yield on U.S treasuries on Friday moving down to its lowest level in nearly a month. The decline in yields was momentarily interrupted after a report on consumer prices suggested that inflation on a YoY basis is slowly creeping up, increasing the expectations for at least one interest-rate hike by the Federal Reserve. The Treasury Department auctioned off record levels of debt in order to help fund Trump s Tax Cuts and Jobs act with $26 billion worth of 10-year notes on Wednesday. Core Eurozone bond yields declined in tandem with their American counterparts at the end of the week amid the renewed move to safe-haven assets in the aftermath of the Turkish financial market deteriorating and the subsequent spillover into Europe. The German 10- year Bund yield fell to around 0.32 % by the end of the week and the U.K s GILT falling to 1.24 %. The Bank of Japan renewed its commitment to ultra-low interest rates. The yield on the benchmark 10-year Japanese government bond will be allowed to move 0.2 percent above or below their target of zero. 10-year Turkish government bonds witnessed a harsh selloff, with yields rising more than 15 percent to settle around 22 percent, a record high. SOVEREIGN BENCHMARK 10 Y YIELD CHANGES UNITED STATES EUROPEAN UNION UNITED KINGDOM LAST WEEK - CURRENT EU VS US 2Y & 10Y BENCHMARK SPREAD

4 BEMO WEEKLY INSIGHTS I COMMODITIES ENERGY PRECIOUS METALS BASE METALS Energy Last Price WTD % WTI Crude Future % Brent Crude Future % NYMEX Gasoline % NYMEX Heat Oil % ICE Gasoil % NYMEX Natural Gas % ENERGY PERFORMANCE VS VOLATILITY Precious Metals Last Price WTD % Gold Spot $/Oz % Silver Spot $/Oz % Platinum Spot $/Oz % Palladium Spot $/Oz % Gold Future % Silver Future % PRECIOUS METALS PERFORMANCE VS VOLATILITY Base Metals Last Price WTD % LME Aluminum % LME Copper % LME Zinc % LME Nickel % LME Lead % LME Tin % AGRICULTURAL Agricultural Last Price WTD % Corn CBT % Wheat CBT % Soybeans CBT % Bean Meal CBT % Rough Rice CBT % MDE Palm Oil % Soybean CBT % Coffee ICE % Sugar #11 ICE % Cotton #2 ICE % Cocoa ICE % Ethanol CME % Lumber CME % Orange Juice ICE % Live Cattle CME % Feeder Cattle CME % Lean Hogs CME % Gold futures ended lower for the day and the week on Friday as a sharp increase in the dollar which drew global interest on Friday overshadowed growing worries in Turkey. Russian market volatility added to the global theme with newly announced U.S sanctions agitated the ruble which lost significant ground against the dollar further strengthening it. Oil prices settled higher on Friday on forecast for rising demand but remained lower for the week. The International Energy Agency lifted global demand view by 110,000 barrels a day to 1.5 million barrels for In the same report, the agency indicated that global supply rose by 300,000 barrels per day last months on the back of greater supply from both Russia and OPEC member countries. The increase in trade tensions following U.S announcement of an additional 25 percent of $16 billion worth of Chinese goods and subsequent retaliation by the Chinese Ministry of Commerce worried investors, fearing it could impact global demand and growth.

5 BEMO WEEKLY INSIGHTS I ECO CALENDAR ECONOMIC CALENDAR Country Event Surv(M) Prior Time Date Canada CPI YoY 2.50% 2.50% 15:30 8/17/2018 Canada CPI NSA MoM 0.10% 0.10% 15:30 8/17/2018 Eurozone CPI YoY 2.10% 2.00% 12:00 8/17/2018 Eurozone GDP SA QoQ 0.30% 0.30% 12:00 8/14/2018 Eurozone GDP SA YoY 2.10% 2.10% 12:00 8/14/2018 France CPI YoY 2.30% 2.30% 9:45 8/14/2018 Germany ZEW Survey Expectations :00 8/14/2018 Germany ZEW Survey Current Situation :00 8/14/2018 Germany CPI YoY 2.00% 2.00% 9:00 8/14/2018 Germany CPI MoM 0.30% 0.30% 9:00 8/14/2018 Italy CPI EU Harmonized YoY 1.90% 1.90% 11:00 8/13/2018 Japan Industrial Production MoM % 7:30 8/14/2018 Russia Industrial Production YoY 2.60% 2.20% 08/15/18-08/16/18 Russia Unemployment Rate 4.70% 4.70% 16:00 8/17/2018 United Kingdom CPI YoY 2.50% 2.40% 11:30 8/15/2018 United Kingdom CPI MoM 0.00% 0.00% 11:30 8/15/2018 United Kingdom Jobless Claims Change k 11:30 8/14/2018 United Kingdom CPI Core YoY 1.90% 1.90% 11:30 8/15/2018 United States Initial Jobless Claims 215k 213k 15:30 8/16/2018 United States U. of Mich. Sentiment :00 8/17/2018 United States DOE U.S. Crude Oil Inventories k 17:30 8/15/2018 United States MBA Mortgage Applications % 14:00 8/15/2018 United States Retail Sales Advance MoM 0.10% 0.50% 15:30 8/15/2018 United States Housing Starts 1260k 1173k 15:30 8/16/2018 United States Industrial Production MoM 0.30% 0.60% 16:15 8/15/2018 Banque BEMO sal Head Office - Private and Corporate Banking 96 Pasteur Building, Pasteur Street, Medawar Area, P.O. Box: , Beirut - Lebanon Tel: Fax: Wealth & Investment Management research@bemobank.com Beirut Central District Riad El Solh Square, Esseily Building Bloc A, 7th Floor Beirut - Lebanon Tel: Fax: Disclaimer: This report is published for information purposes only. The information herein has been compiled from, or based upon sources considered to be reliable (Bloomberg, Financial Times, SeekingAlpha, DailyStar ), but we do not guarantee or assume responsibility for its completeness and accuracy. This document should not be construed as a solicitation to take part in any investment, or as constituting any representation or warranty on our part. This report is not to be relied upon in substitution for the exercise of specialists. We may not have taken any steps to ensure that the securities referred to in this report are suitable for any particular investor. The investments and services contained or referred to herein are not purported to be exhaustive, any person considering an investment should seek specialist advice on the suitability of an investment. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your individual circumstances, or otherwise constitutes a personal recommendation. Clients understand that it is their responsibility to seek legal and/or tax advice regarding the legal and tax consequences of their investment transactions. The consequences of any action taken on the basis of information contained herein are solely the responsibility of the recipient. Investment instruments are subject to risk, including possible loss of principal amount invested. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. The value of securities and financial instruments is subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities or financial instruments. Some investments mentioned in this report may have a high level of volatility. High volatility investments may experience sudden and large falls in their value causing losses when that investment is realized. Some investments may not be readily realizable and it may be difficult to sell or realize those investments, similarly it may prove difficult to obtain reliable information about the value, or risks, to which such an investment is exposed. This report may provide the addresses of websites or references. We have not reviewed any such site and takes no responsibility for the content contained therein. Such address or reference is provided solely for convenience and information. Accessing such website through this report shall be at the recipients own risk.