Weekly Market Review February 15, 2015 February 21, 2015

Transcription

1 Weekly Market Review February 15, 2015 February 21, 2015 February 22, 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 manufacturing sector expanded as Markit s flash PMI rose to 54.3 in Feb from January s final reading of 53.9 Factory output edged up 0.2% in Jan while the growth was revised downwards from 0.3% to zero in Dec Conference Board s US Leading Economic Index gained 0.2% in Jan after a downwardly revised 0.4% advance in Dec Markit's composite flash Euro zone PMI rose to 53.5 in Feb, its best since July, from a final reading of 52.6 in Jan European Commission s flash Euro zone consumer confidence index improved above expectations by 1.8 pts in Feb Euro zone finance ministers agreed in principle to extend heavily indebted Greece's financial rescue by 4 months German initial composite PMI by Markit climbed to 54.3 in Feb vs. a final reading of 53.5 in Jan ZEW s economic sentiment index rose to 53.0 in Feb from 48.4 in Jan, rising for a 4 th consecutive month Employment in manufacturing sector rose to a record high of 5.3mn at the end of 2014 Swiss ZEW investor sentiment plunged by 62.2 points in Feb to -73 pts post removal of franc s cap by central bank British annual CPI fell to 0.3% in Jan, its lowest level since 1989, boosting household s spending power Markit s preliminary composite PMI for France jumped to 52.2 from 49.3 in Jan, the highest reading since Aug 2011 The Organisation for Economic Cooperation & Development raised Italy s 2015 growth forecast to 0.6% from 0.2% Greek consumer prices fell 2.8% in Jan vs. 2.6% drop recorded in Dec, posting deflation for a 23 rd month FDI in China grew at its strongest pace in nearly four years in Jan, surging 29.4% YoY to $13.9bn China launched its ambitious $40bn Silk Road Infrastructure fund to finance proposed Belt and Road initiative Japan's economy grew 2.2% YoY in 4Q2014. GDP grew 0.6% QoQ, following two straight quarters of contraction Markit/JMMA s flash Japan manufacturing PMI fell to a seasonally adjusted 51.5 in Feb from a final 52.2 in Jan Exports jumped 17% YoY in Jan, reflecting a weak yen is boosting country s exports and helping economy Moody s cut Russia s credit rating by one level to Ba1, the highest level of junk, on Ukraine issue and falling oil price Israel s 4Q2014 GDP grew at an annualized 7.2%. GDP expanded 0.6% in 3Q2014, impacted by Gaza war Last Close Change 5 Day % YTD % S&P 500 2, DJI 18, Nasdaq Comp 4, Euro Stoxx FTSE 100 6, Dax 11, CAC 40 4, Nikkei , Hang Seng 24, Brazil - Bovespa 51, Russia - Micex 1, BSE Sensex 29, Shanghai Comp 3, S&P year performance Euro Stoxx year performance Page I 3

4 GCC EQUITIES Moody s upgraded Abu Dhabi Commercial Bank's standalone baseline credit assessment to baa3 from ba1 Al Maha Ceramic s BoD approved raising Sohar factory production capacity by 120%; recommends dividend, bonus Damac Properties awarded 5 major construction contracts worth AED1.2bn in Dubai during Jan 2015 London-listed UAE healthcare provider NMC Health secured a 5-yr $825mn from a group of six banks Abu Dhabi Nat. Co. for Building Material posted a net profit of AED4.7bn in FY14 vs. a net loss of AED22.4bn in FY13 Emirates Integrated Telecom. posted 6.2% gain in FY2014 net profit to AED2.1bn, proposes AED0.2/share dividend Emaar Properties 4Q2014 earnings gained 14% YoY to AED861mn. Earnings were up 23% on a QoQ basis Dubai Financial Market recorded ~167% increase in FY2014 net profit to AED759mn Dubai-based National Petroleum Services secured a $200mn financing from HSBC, Emirates NBD & Al Hilal Bank Etisalat s Egyptian subsidiary, Etisalat Misr signed a $120nm 3-yr loan with HSBC and National Bank of Abu Dhabi Emirates airlines reportedly hired banks to help it arrange a Sukuk of up to $1bn, backed by UK Export Finance Saudi Aramco and its partner Dow Chemical Co. plans to start production at their $20b Sadara Chemical Co. in 2015 Dar Al-Arkan Real-Estate Development Company repaid SR1.7bn Sukuk, which was due on Feb 18, 2015 Saudi s Arabian Cement Company FY2014 bottom-line zoomed around 236% to SAR645mn United Cooperative Assurance Company s shareholders approved board s proposal to increase capital by SR210mn AXA Cooperative Insurance plans capital increase from SR200mn to SR450mn through rights issue offering Agility plans to spend $100mn for expansion in 2015, targeting Ghana, Mozambique, Angola and Nigeria Oman Telecommunication Co. recommends 75% cash dividend, in addition to 40% cash dividend distributed in Aug Bank Dhofar considers raising up to $300mn of capital, preferably through a Tier I capital boosting bond Qatar Insurance s shareholders approved capital increase from QR1.6bn to QR1.85bn; proposed dividend, bonus Qatar s Dlala Brokerage & Invest. Holding s earnings soared 1128% to QR67mn in FY2014, recommends 28% bonus DFMGI 1 year performance Saudi Tadawul 1 year performance Last Close Change 5 Day % YTD % Dubai 3, Abu Dhabi 4, Saudi Tadawul 9, Qatar Index 12, Kuwait Index 6, Oman MSM 30 6, Bahrain All Share 1, Egypt EGX 30 9, Istanbul 100 Index 85, Page I 4

5 CURRENCIES US dollar strengthened 0.1% against euro and 0.2% against yen in the week as currency traders see more than 50% chance Fed will raise rates by Sept despite the latest minutes of meeting showing many officials called for keeping rates lower for a longer period UK pound appreciated 0.1% in the week to pence per euro, extending its gain into a third week after data showed UK wage growth accelerated and unemployment fell in the fourth quarter of 2014 Brazil s real weakened 1.2% in the week and dropped to a decade low of per dollar on speculation the government will struggle to pare deficits as Latin America s largest economy contracts Canadian dollar depreciated 0.67% in the week to per US dollar after data showed retail sales dropped by a more than expected 2.0% in December, the largest decline since April 2010 Russian ruble gained around 2.2% in the week to per dollar as higher oil prices coupled with a Ukraine ceasefire agreement and stabilization in the town of Debaltsevo inspired investors Japan and South Korea will not renew a $10bn 14-year-old currency swap accord, aimed at helping tide one another over financial crises, when it ends of Feb 23, 2015 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 West Texas Intermediate (WTI) crude futures lost 5.3% in the week while Brent also lost 2.1% as a report from Energy Information Administration (EIA) showed US crude inventories rose 7.7mn barrels to 425.6mn last week, rising for a sixth straight week to record highs Gold prices in the spot market lost 2.2% in the week, registering a fourth straight weekly loss as hopes for a successful resolution to Greece's debt talks dimmed appeal of a safe haven investment Cotton futures gained 3.5% in the week as forecasts from US Department of Agriculture showed world cotton stocks will fall in for the first time in six years, led by a drop in Chinese production to a 12-year low Cocoa futures rose 2.4% in the week, boosted by a diminishing outlook for production in Ghana and quality concerns in top grower Ivory Coast 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 Coffee futures plunged around 10% during the week as dealers said rains across key growing areas of Brazil and the highest January production in Colombia since 2008 improved the outlook Sugar futures shed 4.3% in the week as a decision by India to offer export incentives to mills added to concerns about already ample supplies of the sweetener WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES US 10-year yield rose 6.1 bps in the week to 2.11% amid speculation Janet Yellen will reiterate the Federal Reserve s commitment to raise interest rates later this year Greece s government bonds posted their first weekly drop in Feb and yields rose 61 bps to 9.73% before Euro zone and Greece officials agreed to a provisional accord that extends bailout funds for four months Benchmark 10-year UK government bonds declined for a third week, the longest streak since Sept sending yields higher by 8.9 bps to 1.77% as Bank of England policy makers said they see consumer prices rising fairly sharply next year when effects of weaker oil prices may fade Ukraine s benchmark government securities due July 2017 fell more than 10 cents during the week, lifting the yield to 52.8% as an offensive by pro-russian rebels threatened to deepen the nation s financial distress before debtrestructuring talks Colombia held the benchmark rate at 4.5% for a sixth month as accelerating inflation deterred policy makers from moving to stimulate the country s slowing economy. Consumer prices rose 3.82% YoY in Jan, the fastest pace in three years and near the upper limit of the bank s target range 2-4% 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 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 Nigeria 6.52% 8.63% 2 Denmark 6.23% 5.86% 3 Italy 3.01% 2.89% 4 Switzerland 2.78% 2.12% 5 Portugal 2.53% 2.41% 6 Kenya 2.36% 2.47% 7 Japan 2.34% 2.10% 8 Israel 2.29% 3.02% 9 Austria 2.14% 2.02% 10 Montenegro 1.63% 1.51% Ref Country YTD Change YTD Change (USD Adj.) 1 Russia 15.14% 15.14% 2 Italy 14.89% 8.08% 3 Denmark 14.68% 7.66% 4 Portugal 13.98% 7.22% 5 Finland 13.75% 7.00% 6 Sweden 13.64% 5.81% 7 Austria 13.47% 6.74% 8 Slovakia 13.29% 6.58% 9 France 13.06% 6.36% 10 Germany 12.70% 6.02% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Greece -4.46% -4.56% 2 Egypt -2.73% -2.69% 3 Venezuela -2.12% -2.12% 4 Colombia -2.07% -5.01% 5 Bulgaria -1.84% -2.02% 6 Peru -1.46% -1.69% 7 Laos -1.35% -1.35% 8 Argentina -1.31% -1.56% 9 Dubai UAE -1.17% -1.17% 10 Slovakia -0.95% -1.06% Ref Country YTD Change YTD Change (USD Adj.) 1 Nigeria % % 2 Venezuela % % 3 Kazakhstan % % 4 Cyprus % % 5 Colombia -9.53% % 6 Peru -6.93% % 7 Mongolia -6.90% % 8 Bulgaria -6.57% % 9 Ghana -4.54% % 10 Mauritius -3.50% -8.40% Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Heat Oil 10.35% 2 Lean Hogs 8.80% 3 Bean Meal 5.14% 4 Rough Rice 4.45% 5 Cotton 3.51% 6 Gasoline 2.83% 7 Cocoa 2.44% 8 Palm Oil 1.63% 9 Soybeans 1.58% 10 Palladium 0.72% Ref Commodity YTD Pct Change 1 Heat Oil 14.36% 2 Gasoline 14.31% 3 Gasoil 13.52% 4 Rubber 12.25% 5 Cotton 7.30% 6 Brent Crude 5.04% 7 Cocoa 4.02% 8 Silver 3.42% 9 Natural Gas 2.15% 10 Gold 1.44% Ref Commodity Weekly Change 1 Coffee -9.66% 2 Natural Gas -7.23% 3 Silver -6.44% 4 Zinc -4.83% 5 Nickel -4.71% 6 Sugar -4.32% 7 Lead -4.19% 8 Platinum -3.54% 9 Orange Juice -2.91% 10 Lumber -2.38% Ref Commodity YTD Pct Change 1 Lean Hogs % 2 Steel Rebar % 3 Wheat % 4 Ethanol % 5 Coffee % 6 Feeder Cattle -9.24% 7 Lumber -8.34% 8 Copper -8.23% 9 Nickel -7.89% 10 Tin -7.73% 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