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 % -3.60% 2.59% Developed % -1.90% 1.83% Emerging % % 8.59% Frontier % % 3.39% Europe % -7.75% -0.71% Latin America % -5.97% -0.15% Asia Pacific % % 4.31% INTERNATIONAL EQUITY INDICES Last Price Daily % YTD % 10D Vol EuroStoxx % -9.04% -1.21% FTSE % -9.27% 0.03% CAC % -4.56% -0.71% DAX % % -2.71% Swiss SMI % -8.29% -0.33% Nikkei % -2.17% -2.36% CSI % % -3.55% INTERNATIONAL MARKETS INDICES Last Price WTD % YTD % 10D Vol Major Indices DowJones % 2.51% 0.95% S&P % 0.00% 2.54% Nasdaq % 0.00% 6.12% Sectors Indices Discretionary % 10.22% 6.55% Staples % -8.20% 0.63% Energy % 1.33% -1.87% Financials % -5.34% -0.24% Healthcare % 10.22% 2.45% Industrials % -2.56% -0.72% IT % 12.38% 7.37% Materials % % -1.49% Telecom % -8.41% 4.95% Utilities % 0.54% -0.12% Real Estate % -6.48% 0.16% Equities last week witnessed their biggest drop since early February. Stocks fell sharply, causing the S&P 500 index to lose in excess of 5 percent Wednesday through Thursday with the selloff being attributed to a variety of reasons. A deepening of the U.S trade conflict with China, signs of weakness in the global economy with a weaker growth outlook as per the International Monetary Fund, rising Treasury bond yields and inflationary fears, all collectively weighed in on sentiment during the week. Selling continued Thursday, despite the release of lower than expected Consumer Price Index figures temporarily abating inflationary fears and offering minor relief. Materials and industrials stocks were among the worst performers following the drop in commodities. Technology shares were under pressure with FANGs tumbling several percentage points over the week. Utilities performed well. The global rout in equities inevitably spread to Europe last week. European stocks followed their global counterparts lower as worries that rising interest rates would curb global growth. The spotlight remained on Italy last week as Berlin slashed its growth forecast to 1.8 percent for both 2018 and 2019, citing worries that persistent setbacks with regards to the Italian fiscal budget might lead to downwards revisions from rating agencies. Technology stocks were among the worst performers, similar to their U.S counterparts. A notable underperforming sector in Europe last week was the luxury goods sector amid news that the Chinese government would be cracking down on traveling citizens bringing in undeclared designer handbags. Utilities and telecommunications fared better. Japanese equities posted losses as contagion spread. Investor sentiment remained clouded by the impact of U.S trade tensions on corporate earnings as well as the prospects of increased yields on long-term U.S treasuries. The benchmark Nikkei 225 Index fell more than 3.5 percent, a decrease of more than 900 points, consequently turning negative year-to-date albeit only modestly. Equities with particular exposure to China fared badly as did economically sensitive sectors 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 Indices USD Index % 0.15% - EUR/USD % -0.15% USD/JPY % 0.22% GBP/USD % -0.61% USD/CAD % 0.10% AUD/USD % 0.05% NZD/USD % 0.38% USD/CHF % 0.50% USD/NOK % -0.17% USD/SEK % -0.60% USD/CNY % 0.00% Major EUR Cross Rate EUR/GBP % 0.01% EUR/CHF % -0.15% EUR/JPY % -0.21% FX PERFORMANCE VS VOLATILITY MARKET COMMENTARY The U.S dollar suffered losses versus several of its peers last week, strengthening towards the middle of the week in the wake of the global equity selloff as risk aversion swept financial markets before paring gains. Minutes from September s FOMC meeting remain in focus as they are likely to weigh in on the dollar. The euro was mixed against its peers last week, and remained out of the spotlight as other currencies took center stage during and after the equity selloff. The euro s performance remained tied to the ongoing debt saga in Italy as the economic calendar last week in Europe was somewhat muted. Late Thursday, the Italian government passed a new budget bill with the European Union Commission voicing grave concerns. The Eurozone s September CPI release on Thursday remains in focus as well as any developments in Italy. The pound sterling strengthened versus the dollar last week, constituting its second straight week of advances on expectations that a break in the current impasse between the United Kingdom and the European Union would be announced. Next week s EU summit meeting in Brussels taking place on the 17th and 18th of October remains in focus with crucial developments in Brexit negotiations. The Japanese yen was among the best performing currencies last week amid an increase in safe haven demand following the global selloff in equities midweek. A broader weakness in the dollar in the closing stages of the week also weighed in. The Federal Reserve s FOMC minutes for the month of September remain in focus as they could impact the dollar. 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 U.S treasuries endured a volatile week, fluctuating before yields settled lower amid a global equity selloff. The most significant events for treasuries came in on Thursday. Global political and trade tensions amid President Trump s criticism of the Federal Reserve s interest rate hikes caused treasuries to climb. U.S headline and core inflation figures came in below projections for September with the consumer price index rising mildly, temporarily abating inflationary fears and causing yields to fall. This week s FOMC minutes remain in focus. German bonds were among the best performing debt instruments last week as political and economic turmoil took center stage. Their performance was notably buoyed by negative developments in Italy regarding the government s fiscal budget and additionally by the rout in equities, both sparking demand for safer assets. Japanese government bonds strengthened last week and largely tracked moves in their American counterparts. Investors flocked to safe-haven assets following the turmoil in the stock market and uncertainty in trade tensions. Bank of Japan governor Kuroda warned last week that escalating trade tension, emerging market turbulence and significant debt loads pose risks to the world economy while reiterating his commitment to Japan s quantitative easing program. 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 % U.S oil benchmarks gains on Friday failed to stop their first weekly decline in five weeks as signs of rising crude supplies contributed to the weekly loss. The U.S Energy Information Administration revealed on Thursday that domestic U.S. crude supplies climbed by 6 million barrels, a much larger increase than initially expected. Oil benchmarks largely moved in synchronization with the two-day selloff taking place across global market. The rout in global equities in turn raised concerns about economic growth and consequently energy consumption, causing a fall in oil prices among other commodities. OPEC released their monthly report last Thursday where they revealed a rise in OPEC and Russian crude-oil production for the month of September, enough to make up for the eventual shortfall from U.S sanctions on Iran. Both OPEC and the International Energy Agency indicated last week a lowering of demand growth prospects due to economic risks from trade and higher oil prices. Baker Hughes reported an increase in the number of active U.S rigs drilling for oil by to 869, the largest weekly increase since the beginning of August and the first increase following three straight weeks of declines. Gold recorded a second straight week of gains on Friday as the global rout in equities pushed investors towards the safe-haven asset despite it pulling back from its highest level in more than two months as U.S equities very slightly recovered by the week s close. Gold was also supported by the University of Michigan s Consumer Sentiment Index figures released on Friday, where the 5-year inflation outlook came in lower than expected. Higher inflation boosts probabilities of rate hikes which, in turn, make gold less attractive as a non-interest bearing asset.

5 BEMO WEEKLY INSIGHTS I ECO CALENDAR KEY ECONOMIC INDICATORS Country Event Surv(M) Prior Time Date Canada CPI YoY 2.70% 2.80% 15:30 10/19/2018 Canada CPI NSA MoM 0.10% -0.10% 15:30 10/19/2018 China CPI YoY 2.50% 2.30% 4:30 10/16/2018 China GDP YoY 6.60% 6.70% 5:00 10/19/2018 China PPI YoY 3.50% 4.10% 4:30 10/16/2018 China Money Supply M2 YoY 8.30% 8.20% 10/15/18-10/16/18 Eurozone CPI YoY 2.10% 2.00% 12:00 10/17/2018 Germany ZEW Survey Expectations :00 10/16/2018 Germany ZEW Survey Current Situation :00 10/16/2018 Italy CPI EU Harmonized YoY 1.60% 1.60% 12:00 10/16/2018 Japan Industrial Production MoM % 7:30 10/15/2018 Russia Industrial Production YoY 2.50% 2.70% 10/15/18-10/16/18 Russia Unemployment Rate 4.70% 4.60% 16:00 10/17/2018 United Kingdom CPI YoY 2.60% 2.70% 11:30 10/17/2018 United Kingdom CPI MoM 0.30% 0.70% 11:30 10/17/2018 United Kingdom Jobless Claims Change k 11:30 10/16/2018 United Kingdom CPI Core YoY 2.00% 2.10% 11:30 10/17/2018 United Kingdom PPI Output NSA MoM 0.20% 0.20% 11:30 10/17/2018 United States Initial Jobless Claims 210k 214k 15:30 10/18/2018 United States DOE U.S. Crude Oil Inventories k 17:30 10/17/2018 United States MBA Mortgage Applications % 14:00 10/17/2018 United States Retail Sales Advance MoM 0.60% 0.10% 15:30 10/15/2018 United States Housing Starts 1210k 1282k 15:30 10/17/2018 United States Industrial Production MoM 0.20% 0.40% 16:15 10/16/2018 United States Existing Home Sales 5.29m 5.34m 17:00 10/19/2018 Banque BEMO sal Head Office - Private and Corporate Banking 96 Pasteur Building, Pasteur Street, Medawar Area, P.O. Box: , Beirut - Lebanon Tel: Fax: Investment & Research 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, 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.