Weekly Market Review May 3, 2015 May 9, 2015

Transcription

1 Weekly Market Review May 3, 2015 May 9, 2015 May 10, 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 US nonfarm payrolls gained 223,000 in Apr after rising 85,000 in Mar. Jobless rate fell to 5.4%, lowest since May 08 Private jobs increased 169,000 in Apr, below expectations while nonfarm productivity fell 1.9% in 1Q2015 Factory goods orders rebounded, rising 2.1% in Mar after falling 0.1% in Feb The ISM services sector index rose to 57.8 in Apr from 56.5 in Mar due to a surge in business activity Trade deficit expanded by 43.1% in Mar to reach $51.4bn as imports gained more than exports European Commission raised euro zone growth forecast to 1.5% from 1.3% in 2015 due to cheap oil, weak euro and stable global growth. Consumer prices forecasted to expand 0.1% in 2015 vs. 0.1% fall estimated earlier Markit s Euro zone final composite PMI stood at 53.9 in April, signaling business activity expanded Euro zone retail sales fell 0.8% MoM in Mar for the 1 st time since Sep 14, However, it was up 1.6% YoY German exports rose 1.2% MoM in Mar while imports climbed by 2.4%. However, industrial output dipped by 0.5% British Prime Minister David Cameron won with clear majority. His party held 331 seats in the 650-seat house French industrial output advanced 1.4% in 1Q2015 despite dipping 0.3% MoM in Mar, raising hopes of recovery Greece defied demands of its creditors to cut pensions or ease layoffs as it seeks bailout funds from EU/IMF Greek consumer prices fell 2.1% YoY in Apr with the annual pace of deflation unchanged from Mar China s exports contracted 6.4% YoY in Apr while imports tumbled 16.2%, fueling expectations of more stimulus HSBC/Markit China manufacturing PMI fell to 48.9 in Apr from 49.6 in Mar as new orders shrank Asian Development Bank boosted its development fund by 50% to $20bn as it faces competition from China s AIIB HSBC India service PMI fell to 52.4 in Apr vs. 53 in Mar as services sector lose momentum on soft domestic demand Australia s central bank trimmed 2015 growth forecast to 2.5% vs % earlier, inflation expected at 2.5% Russia HSBC PMI stood at 48.9 in Apr as manufacturing activity shrank for the fifth consecutive month HSBC/Markit UAE PMI improved to 56.8 in Apr from 56.3 in Mar, Saudi PMI eased to 58.3 in Apr from 60.1 in Mar Last Close Change 5 Day % YTD % S&P 500 2, DJI 18, Nasdaq Comp 5, Euro Stoxx FTSE 100 7, Dax 11, CAC 40 5, Nikkei , Hang Seng 27, Brazil - Bovespa 57, Russia - Micex 1, BSE Sensex 27, Shanghai Comp 4, S&P year performance Euro Stoxx year performance Page I 3

4 GCC EQUITIES Emaar Properties 1Q2015 net profit rose 7.2% YoY to AED1.03bn. Revenue jumped 25% YoY to AED3.0bn Abu Dhabi National Hotels reported a drop of 42% YoY in its 1Q2015 net income to AED88.7mn Dubai-based Palma Development plans an AED1.5bn seafront residential project on Dubai s Palm Jumeirah Tabreed seeks shareholders nod to buy back 25% of mandatory convertible bonds worth AED1bn Emirates Airline s bottom-line climbed to AED4.56bn in FY from AED3.25bn in FY on lower oil prices Emaar Properties Egyptian unit, Emaar Misr for Development targets to raise $372mn through its IPO Drake & Scull Engineering secured an AED290mn MEP contract for a mixed-used development project in Dubai Abu Dhabi state-controlled venture, Dolphin Energy is seeking to raise a $1bn incremental loan National Bank of Abu Dhabi partially repurchased and canceled AED125mn of outstanding convertible notes Shuaa Capital recorded a net loss of AED1.6mn in 1Q2015 vs. a net profit of AED8.2mn in 1Q2014 Saudi Airlines Catering Co. will develop a SAR200mn residential project in Dahban at Jeddah province; BoD proposes SAR143.5mn dividend for 1Q2015 Abdullah A. M. Al-Khodari Sons bagged SAR119mn contract for waste collection & disposal in Jazan National Shipping Co. of Saudi Arabia considers a debut Sukuk issue worth up to SR3.9bn in 2Q2015 Kuwait s Alargan Intnl. Real Estate Co. earned SAR317.3mn net profit from stake sale in a partner company in Saudi International Financial Advisors BoD recommended writing-off KD65.5mn accumulated losses for FY2014 Oman s central bank approved Bank Dhofar s plan to issue a capital-boosting bond of up to $300mn Galfar Engineering & Contracting won two contracts worth a cumulative value of OMR142.72mn Doha Bank plans to infuse around $250mn in its Indian operations over 3 years to support the $2.5bn loan book Bahrain-based Gulf Finance House said it will buy a mall in Jeddah, Saudi Arabia for SAR180mn Aluminium Bahrain s net income surged by 117.5% YoY to BHD37.2mn in 1Q2015 Last Close Change 5 Day % YTD % Dubai 4, Abu Dhabi 4, Saudi Tadawul 9, Qatar Index 12, Kuwait Index 6, Oman MSM 30 6, Bahrain All Share 1, Egypt EGX 30 8, Istanbul 100 Index 84, DFMGI 1 year performance Saudi Tadawul 1 year performance Page I 4

5 CURRENCIES US dollar recovered from lows reached during the week against euro and closed flat after a monthly US jobs report pointed to steady labor-market gains, likely anchoring investors predictions of higher borrowing costs in 2015 The British Pound appreciated 2.0% in the week to US dollars as a surprising UK General Election result removed a great deal of political uncertainty and encouraged traders to shed short positions Brazil s real climbed 1.3% in the week to per dollar as the nation s lower house approved reductions in labor benefits, aiding the government efforts to shore up public accounts and preserve Brazil s investment grade status Canadian dollar advanced 0.7% in the week to per dollar as a gain in full-time employment in April partially offset the biggest drop in part-time jobs in 4 years, adding to optimism the economy is recovering from a plunge in oil prices, its largest export. Unemployment rate held at 6.8% for the third straight month Malaysia s ringgit snapped a six-week gain and dropped 0.7% in the week to per US dollar as a drop in crude prices raised concern government finances in the oil-exporting nation will deteriorate Indonesian rupiah weakened 1.3% in the week to 13,121 per dollar after Indonesian Vice President Jusuf Kalla said on May 7 the central bank will gradually cut borrowing costs, while Bank Indonesia Governor Agus Martowardojo said that he would keep a tight monetary stance, to anchor inflation expectations 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 crude posted its first weekly loss of 1.6% in a month as the market fretted again about global oversupply while West Texas Intermediate (WTI) crude futures rose 0.4% in the week, helped by jobs growth data and the forming of the first storm of the hurricane season Gold spot prices gained 0.8% in the week after some investors wagered that the tepid pace of US hiring would discourage the Federal Reserve from raising interest rates until later this year Sugar futures rose 3.95% in the week on short-covering. Traders also focused on rains during the early period of the cane crush in top grower Brazil, which encouraged mills to raise cane allocations to ethanol biofuel instead of sugar Palm oil futures advanced 3.7% in the week as Malaysian ringgit weakened against the dollar, tracking lower crude prices. The weaker Malaysian currency stoked buying interest from overseas palm investors 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 Zinc futures moved up 0.4% in the week on the London Metal Exchange (LME) as investors bet that the shutdown of big mines such as Lisheen in Ireland and Century in Australia will lead to a zinc deficit Corn futures on the Chicago Board of Trade (CBOT) slid 0.35% in the week, weighed down by concerns of bumper crop as good weather across the US Midwest allowed farmers to make rapid progress in planting this year s crop WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES US 10-year yield edged up 3.4 bps in the week to 2.15% as the Federal Reserve Chief Janet Yellen said yields could see a sharp jump when officials raise the benchmark interest rate for the first time since 2006 German government bonds declined for a third week, sending 10-year yield 17.6 bps higher to 0.55%, deepening a rout in Europe s debt markets as investors turned against record-low and negative yields Australia's central bank cut interest rates on May 5 for the second time in 2015 by a quarter to 2%, seeking to support the economy against sliding Norway's Norges Bank held its main interest rate at where it has been since Dec 2014 i.e. 1.25% on May 7. However, the central bank signaled that the rates may be lowered in Jun 2015 to counter the effects of a slowing economy and a rising currency while keeping inflation close to a 2.5% target China s seven-day repo rate dropped for a 10 th week by 9 bps to 2.28%, the longest run since 2009, as monetary easing leaves banks flush with cash at a time of weakening economic growth 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 India s 10-year sovereign bonds completed their biggest weekly decline since Dec 2014, resulting in yield climbing by 12 bps to 7.98% as overseas investors withdrew $494mn from local government and corporate notes on May 7, the biggest single-day sale since January Withdrawals for the week totaled $938mn 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 Botswana 3.05% 3.46% 2 Russia 2.93% 2.93% 3 Ireland 2.68% 2.68% 4 Germany 2.23% 2.23% 5 Greece 1.95% 1.95% 6 Indonesia 1.88% 0.54% 7 Serbia 1.71% 1.12% 8 Brazil 1.64% 3.00% 9 Chile 1.54% 2.75% 10 Norway 1.47% 3.17% Ref Country YTD Change YTD Change (USD Adj.) 1 Venezuela 47.61% 47.61% 2 Argentina 42.27% 34.89% 3 Hungary 36.73% 32.52% 4 Russia 34.00% 34.00% 5 China 30.03% 29.95% 6 Denmark 29.46% 19.60% 7 Jamaica 27.59% 26.54% 8 Portugal 27.32% 17.86% 9 Italy 22.62% 13.51% 10 Austria 21.08% 12.08% Ref Country Weekly Change Weekly Change (USD Adj.) 1 China -5.31% -5.40% 2 Dubai UAE -2.97% -2.97% 3 Estonia -2.73% -2.73% 4 Sweden -2.48% -0.80% 5 Colombia -2.08% -0.57% 6 Hong Kong -1.98% -1.99% 7 Abu Dhabi UAE -1.98% -1.98% 8 South Korea -1.96% -2.94% 9 Cyprus -1.90% -1.90% 10 Croatia -1.48% -1.54% Ref Country YTD Change YTD Change (USD Adj.) 1 Mongolia % % 2 Peru -9.65% % 3 Colombia -9.63% -8.81% 4 Kazakhstan -9.59% % 5 Cyprus -8.24% % 6 Mauritius -5.69% % 7 Bulgaria -4.23% % 8 Zambia -2.55% % 9 Bahrain -2.55% -2.56% 10 Kuwait -2.12% -4.98% Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Lean Hogs 6.38% 2 Soybean Oil 4.33% 3 Sugar 3.95% 4 Natural Gas 3.75% 5 Palm Oil 3.67% 6 Orange Juice 3.44% 7 Ethanol 3.24% 8 Palladium 3.22% 9 Nickel 2.51% 10 Silver 1.89% Ref Commodity YTD Pct Change 1 Gasoline 38.77% 2 Gasoil 16.30% 3 Lead 9.80% 4 Cotton 9.77% 5 Rubber 9.00% 6 Zinc 8.13% 7 Rubber 9.00% 8 Brent Crude 6.83% 9 WTI Crude 6.72% 10 Silver 4.87% Ref Commodity Weekly Change 1 Lumber -8.47% 2 Rough Rice -4.47% 3 Lead -3.32% 4 Gasoline -2.62% 5 Aluminium -1.87% 6 Brent Crude -1.61% 7 Heat Oil -1.44% 8 Steel Rebar -1.41% 9 Zinc -1.17% 10 Cotton -1.03% Ref Commodity YTD Pct Change 1 Lumber % 2 Coffee % 3 Wheat % 4 Tin % 5 Rough Rice % 6 Steel Rebar % 7 Natural Gas % 8 Orange Juice % 9 Bean Meal % 10 Corn -9.70% 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