Weekly Market Review August 30, 2015 September 5, 2015

Transcription

1 Weekly Market Review August 30, 2015 September 5, 2015 September 6, 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 employers added 173,000 workers in Aug. Jobless rate dropped to 5.1%, the lowest since Apr 2008 Trade gap fell 7.4% to the smallest since Feb at $41.9bn in Jul, signaling underlying strength of economy ISM US manufacturing index fell to 51.1 in Aug from 52.7 in Jul, recording slowest pace of expansion since May 13 JP Morgan/Markit Global Manufacturing PMI sank to its lowest reading since Jul 2013 to 50.7 in Aug (51 in Jul) Canada s economy shrank 0.5% in 2Q2015 as oil prices plunged. 1Q2015 contraction revised up to 0.8% from 0.6% ECB lowered Eurozone 2016 GDP growth forecast to 1.7% from 1.9%, citing weaker oil & slowing emerging markets Eurozone manufacturing eased as Markit s final manufacturing PMI edged down to 52.3 in Aug from 52.4 in Jul Unemployment rate dropped to 10.9% in Jul from 11.1% in Jun, the lowest since Feb 2012 Markit s Aug manufacturing PMI rose to 53.2 vs for Germany, slid to 48.3 vs in Jul for France Seasonally adjusted German factory orders fell 1.4% in Jul after rising 1.8% in Jun, indicating a bumpy recovery Italy grew 0.4% in 2Q2015 and 0.3% in 1Q2015, more than previous estimate of 0.3% and 0.2% growth, respectively Markit/Nikkei Japan final manufacturing PMI edged up to 51.7 in Aug from 51.2 in July as new orders improved Industrial output fell 0.6% MoM in Jul vs. rising 1.1% in Jun, hurting an expected rebound in the economy China official factory PMI slid to 49.7 in Aug from 50 in Jul, recorded the lowest reading in three years Cabinet will relax minimum capital requirements for investments in various sectors as ports, railways etc. Russia and China signed multi-billion dollar deals on Sep 3 in oil, gas, post services and other areas Australia s GDP expanded 0.2% QoQ in 2Q2015 vs. 0.9% in 1Q2015, as China slowdown weighed on exports Brazilian manufacturing sector PMI by Markit slid to 45.8 in Aug from 47.2 in Jul. New orders suffered sharp drop India s economy expanded 7% YoY in 2Q2015 vs. 7.5% YoY in 1Q2015, lower than the estimates of 7.4% growth South African Chamber of Commerce & Industry s business confidence index dropped to 84.3 in Aug vs in Jul South Korea s exports slid 14.7% YoY in Aug, an eighth straight monthly decline hit by weak overseas demand 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 20, Brazil - Bovespa 46, Russia - Micex 1, BSE Sensex 25, Shanghai Comp 3, Page I 3

4 GCC EQUITIES Banks will fund 30% of Deyaar Development s $817mn Midtown project, phase I of which will complete by Sep 18 Etihad Airways is reportedly seeking to raise as much as $500mn for fleet expansion Dubai-based jewelry retailer Atlas defaulted on loans worth AED500mn; at least 15 banks expected to get affected Emaar Properties will launch Creekside 18, with 480 apartments on Sep 12 despite recent dip in property prices Emirates Extrusion Factory plans to commence its 3 rd extrusion line in Dubai, raising its capacity by 7,000 mtpa Etisalat s Board of Directors approved foreign and institutional investors to own its shares from Sep 15, 2015 First Gulf Bank is reportedly seeking to raise $1bn from a syndicated loan to boost lending as liquidity tightens Al Othaim Real Estate & Inv. Co. reportedly raised SAR1bn through a debut Sukuk issue to fund its expansion Al Wathba National Insurance Co. successfully acquired all other partner s shares in Vision Capital Brokerage Co. Saudi Telecom Company expects to spend $1bn in 2H2015 on enhancing its network to meet surging demand Al-Rajhi United s subsidiary and Baseel property co. plans to develop SAR1.2bn shopping complex in Riyadh Metlife AIG ANB Coop. Ins. Co. received approval from Saudi Arabian Monetary Agency to raise capital by $175mn Saudi Arabia awarded $162mn Riyadh Metro contract for constructing key facilities to India-based Larsen & Toubro Saudi Aramco reduced its pricing for all October crude oil sales to the US as refining demand plunges Salalah Mills will build a new flour mill worth OMR7.5mn by 1Q2017; will increase paid-up capital by 10% Oman Development Bank plans to extend funding to more sectors and introduce new products, such as leasing Qatar allowed Islamic Holding Group to raise its capital by 2mn QAR50/share, including QAR40 premium Investcorp s net income rose 13% YoY to $116.7mn in the year ending Jun BoD proposed $15/share dividend Bahrain-based Seera Investment Bank reported $1.6mn net profit in 2Q2015 vs. $1.7mn net loss in 2Q2014 Bahrain s Bank ABC and HSBC successfully arranged $106mn syndicated loan for Turkey-based Yapı Kredi Leasing Naseej signed MoU with BBK to provide housing loans for villas offered within its BHD6mn Yasmeenat Saar project 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 72, ; *Current Page I 4

5 CURRENCIES The US dollar climbed versus most of its 16 major peers this week after Aug US labor data bolstered expectations Fed will raise interest rates in Sep for the 1 st time since The Bloomberg Dollar Spot index gained 0.5% The euro dropped 0.3% since Aug 28 in its first consecutive weekly loss against US dollar since the period ended July 3, after the European Central Bank cut its economic forecasts and signaled it may expand stimulus Canada s dollar slipped 0.6% against US dollar as the economy contracted for a second quarter in 2015 and as US jobs data bolstered bets that the Federal Reserve will consider raising rates this month Australian dollar weakened 3.8% this week and fell to a fresh six year low of US cents, after the US greenback gained on the back of monthly jobs data which bolstered bets the Fed will cut interest rates at its Sep meeting Brazil s real slumped 7.3% in the past 5 days against US dollar as assurances that Finance Minister Joaquim Levy would remain in his post failed to quash concern the country will lose its investment-grade rating Russia ruble declined 5.0% since Aug 28, tracking weaker oil and as Citigroup Inc. said the currency will remain under pressure until oil ends its declines while Morgan Stanley forecasted Russia s recession will last another year 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 Malaysia s ringgit depreciated 1.5% against US dollar, registering 11 th straight week of losses as lower energy prices weigh on the oil exporter s earnings and capital flows out of emerging markets amid slowing Chinese growth EUR/USD 1 year performance GBP/USD 1 year performance Page I 5

6 COMMODITIES Brent crude futures lost 0.9% in the week as traders focused on a supply glut and stock prices declined on Wall Street after US jobs report came slightly below expectations. WTI crude gained 1.8% as US rigs count dipped by 13 Gold prices in the spot market lost 0.9% since Aug 28, recording a 2 nd week of decline after US payrolls data failed to allay uncertainty over the prospect of a near-term interest rate hike from the Federal Reserve Chicago Board of Trade (CBoT) wheat futures suffered 4.0% decline in the week as the US wheat continued to face stiff export competition from northern hemisphere harvests, including Russia Comex copper futures lost 1.15% this week, unnerved by prospects of an increase in US interest rates and the reopening next week of the hard-hit Chinese stock market LME tin futures surged 8.3% in the week ended Sep 4, leading a rally in industrial metals. Inventories tracked by the LME fell to lowest since 2008 whereas an official in Indonesia, the world s largest supplier, said the country is not planning to relax a ban on mineral-ore exports 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 jumped 4.7% in the past five days on technical recovery after prices hit multi-year low last week on worries about economic growth in key consumer China ICE sugar futures gained 2.7% during the week ended Sep 4, helped by forecasts for wet weather in center-south Brazil later this month and a weak monsoon in India hit by El-Nino weather pattern WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES Long-term US treasury bonds posted weekly gain, sending 10-year yield 5.6 bps down as the employment report pointed to resilient US economy and raised some concerns that Fed may raise interest rates as soon as Sep 2015 Eurozone government bonds advanced after the ECB stirred speculation it will extend asset purchases to help boost inflation and growth. President Mario Draghi revamped the QE program on Sep 3, raising the purchase limit to 33% per issue of a country s debt stock, up from 25% previously. 10-year Italian bonds yield fell 4 bps to 1.88%, German 10-year bund yield dropped 7 bps to 0.67% while Portugal s 10-year yield slumped 9 bps to 2.5% this week India s 10-year sovereign bonds yield slipped 2.3 bps since Aug 28 to 7.75% on speculation slowing economic growth increases the chances of an interest-rate cut at this month s central bank meeting Brazil s central bank left its benchmark Selic rate at 14.25% on Sep 2, the highest level in nine years taking pressure off an economy struggling with recession despite concerns that a budget crisis could stoke inflation Reserve Bank of Australia left the cash rate unchanged at a record-low 2% on Sep 1 as a declining currency cushions the impact of lower commodity prices amid weaker outlook for key trading partner China 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 Sweden s Riksbank left its main repurchase rate at a record low of minus 0.35% and its bond-buying target at $16.12bn on Sep 3, saying its existing policies were supporting the economy and would lead to inflation moving closer to its 2% target 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 Egypt 3.07% 3.15% 2 Kenya 2.75% 1.05% 3 Jamaica 2.73% 2.39% 4 Nigeria 2.36% 2.31% 5 Greece 2.02% 1.69% 6 Colombia 1.48% -0.16% 7 Slovakia 1.26% 0.93% 8 Mongolia 1.13% 1.22% 9 Romania 0.83% 0.46% 10 Mauritius 0.72% 0.36% Ref Country YTD Change YTD Change (USD Adj.) 1 Venezuela % % 2 Jamaica 31.35% 27.48% 3 Hungary 28.27% 19.21% 4 Argentina 27.39% 15.71% 5 Malta 27.02% 17.05% 6 Denmark 25.83% 15.73% 7 Ireland 20.86% 11.38% 8 Slovakia 17.55% 8.33% 9 Estonia 16.27% 7.15% 10 Botswana 14.09% 3.35% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Japan -7.02% -4.90% 2 Spain -5.13% -5.44% 3 India -4.51% -4.95% 4 Russia -4.37% -4.37% 5 Portugal -4.33% -4.64% 6 Namibia -3.91% -7.74% 7 Peru -3.75% -3.42% 8 Austria -3.60% -3.91% 9 Hong Kong -3.57% -3.58% 10 US -3.40% -3.40% Ref Country YTD Change YTD Change (USD Adj.) 1 Peru % % 2 Greece % % 3 Colombia % % 4 Egypt % % 5 Indonesia % % 6 Singapore % % 7 Turkey % % 8 Nigeria % % 9 Taiwan % % 10 Bulgaria % % Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Tin 8.28% 2 Palm Oil 4.66% 3 Lean Hogs 4.10% 4 Aluminium 3.08% 5 Sugar 2.73% 6 Rough Rice 2.24% 7 Zinc 1.88% 8 WTI Crude 1.84% 9 Zinc 1.82% 10 Cocoa 1.70% Ref Commodity YTD Pct Change 1 Cocoa 8.87% 2 Cotton 4.65% 3 Rough Rice 3.13% Ref Commodity Weekly Change 1 Gasoline % 2 Rubber -9.05% 3 Soybean Oil -4.86% 4 Live Cattle -4.13% 5 Wheat -4.04% 6 Coffee -3.82% 7 Corn -3.79% 8 Platinum -2.68% 9 Bean Meal -2.33% 10 Natural Gas -2.21% Ref Commodity YTD Pct Change 1 Nickel % 2 Coffee % 3 Lumber % 4 Palladium % 5 Steel Rebar % 6 Tin % 7 Wheat % 8 Sugar % 9 Rubber % 10 Zinc % 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