Weekly Market Review October 4, 2015 October 10, 2015

Transcription

1 Weekly Market Review October 4, 2015 October 10, 2015 October 11, 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 Moody s upheld the US triple-a credit rating with a stable outlook, supported by strong GDP growth & US dollar Import prices fell 0.1% in Sep, half the pace in Jul & Aug, boosting optimism it may help Fed to raise rates The IMF cut global growth forecast by 0.2 percentage point each to 3.1% & 3.6% in 2015 & 2016, respectively The World Bank lowered developing East Asia & Pacific region 2015 growth forecast to 6.5% from 6.7%. It also cut 2015 sub-saharan Africa 2015 growth by 0.5% to 3.7% on China slowdown and tighter global financial conditions The UN s Latin American arm said Latin American economies are expected to contract 0.3% in 2015 as Brazil drags G20 finance ministers agreed on Oct 8 to back proposals drawn up by the OECD to tackle corporate tax avoidance 12 nations including the US, Canada, Australia & Japan reached Trans-Pacific Partnership pact on Oct 5 after 5 years Markit s final composite Eurozone PMI stood at 53.6 in Sep, weaker than initial estimate of 53.9 and 54.3 in Aug Order for German goods declined 1.8% on the month in Aug as demand from non-eurozone countries weakened Exports dived 5.2% MoM in Aug in the latest sign that emerging market slowdown is hurting Germany Italian industrial output slipped 0.5% MoM in Aug vs. 1.1% rise recorded in Jul due to weakening global trade British manufacturing output picked up by 0.5% MoM in Aug after falling in Jul as auto plants came back online Construction output dipped 4.3% MoM in Aug, indicating overall economic growth slowed in 3Q2015 Markit/Nikkei Japan services PMI fell to seasonally adjusted 51.4 in Sep from 53.7 in Aug as new business slackened Core machinery orders fell 5.7% in Aug, following a 3.6% decline in Jul and undermining the BoJ optimism China's central bank said it will expand a pilot scheme on relending in an effort to support a slowing economy Foreign exchange reserves dropped $43.3bn to $3.514tn in Sep as central bank stepped up yuan support The IMF said Brazilian economy will shrink 3% in 2015 vs. 1.5% estimated earlier on the back of political crisis Russia failed to reach a $3bn debt restructuring deal with Ukraine on Oct 9, but agreed to continue talking Russian Economy Minister, Alexei Ulyukayev said GDP is on course to contract 3.9% YoY in 4Q2015 Last Close 5 Day % ; *Current YTD % P/E (2015) *Div. Yield S&P 500 2, DJI 17, Nasdaq Comp 4, Euro Stoxx FTSE 100 6, Dax 10, CAC 40 4, Nikkei , Hang Seng 22, Brazil - Bovespa 49, Russia - Micex 1, BSE Sensex 27, Shanghai Comp 3, S&P year performance Euro Stoxx year performance Page I 3

4 GCC EQUITIES NMC Health made an informal cash and share offer to buy rival Al Noor Hospitals Group. Earlier in the week, Al Noor said it is in merger talks with South Africa's Mediclinic International Emirates Sembcorp Water & Power Company mulls issuing a project bond in early 2016 to refinance debt Abu Dhabi Islamic Bank said it is not considering further capital increase after an AED504mn rights issue in Sep Dubai s Al Shafar General Contracting has reportedly put on hold its IPO plan amid weak market conditions Arab National Bank issued SAR2bn 10-year Sukuk through a private placement, with a right to call after 5 years Rabigh Refining & Petrochemical Co. plans to build new units, including one to produce clean fuel, in Rabigh Alinma Bank s bottom-line in 3Q2015 grew by 13.3% YoY to SAR375mn. Total assets reached SAR82.4bn Samba Financial Group s 3Q2015 bottom-line advanced 7.03% YoY to SAR1.37bn National Shipping Co. of Saudi Arabia s net income zoomed 501.4% YoY to SAR510.3mn in 3Q2015 The Saudi CMA approved Bupa Arabia for Coop. Insurance s request to raise its capital by SAR400mn to SAR800mn Banque Saudi Fransi reported SAR1.02bn net profit in 3Q2015 vs. SAR926mn net income in 3Q2014 Sadara Chemical Co. raised its capital by ~25.5% to SAR14.76bn to counteract losses from growing operations National Bank of Kuwait received central bank s approval to issue capital-boosting bonds worth up to KWD125mn Kuwait s CMA exempted Int. Fin. Advisor from making mandatory acquisition offer to First Takaful shareholders National Bank of Oman s 3Q2015 net income advanced 6% to OMR14.9mn from OMR14.0mn in 3Q2014 Hassani Group of Companies bought 2,518,003 shares in ANC Holding LLC at OMR1.085 per share QNB Group s 9M2015 net profit rose 9% YoY to QAR8.7bn, aided by 5.1% YoY gain in net int. income to OMR9.5bn Qatar Primary Materials Co. secured $500mn deal with Hyundai Glovis Co. to ship construction material UrbaCon Trading & Contracting said Mall of Qatar will cost QAR5.4bn and will open by 3Q2016 Investcorp acquired Sweden-based sports goods manufacturer POC from Black Diamond Inc. for $65mn 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 1, Egypt EGX 30 7, Istanbul 100 Index 79, ; *Current DFMGI 1 year performance Saudi Tadawul 1 year performance Page I 4

5 CURRENCIES The US dollar weakened ~1.3% against euro this week as the Fed officials pessimistic tone toward near-term inflation, in its minutes released on Oct 8, dampened market expectation for an interest-rate hike this year Canadian dollar strengthened ~1.6% against US dollar in the week ended Oct 9 on an oil rally that lasted for the past week and a weaker US currency Brazil s real gained 4.3% against US dollar in the week as the political debate over measures to shore up the budget eased and speculation the US will refrain from raising interest rates spurred an advance in emerging markets Russian ruble appreciated 7.3% against US dollar past week amid signs that political risks in the country are abating, paving the way for an easing of international sanctions tied to the Ukraine conflict Australian dollar climbed 3.9% against US dollar since Oct 2 as the US dollar lost ground on Fed minutes, which also resulted in a rally in riskier assets, such as equities and commodities India s rupee completed a second weekly gain against US dollar, rising 1.2% amid optimism demand for local assets is picking up as investor sentiment toward emerging markets improved 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 Emerging-market currencies posted their biggest weekly gain in 17 years as prospects for a US interest rate increase in 2015 receded and oil traded around the highest level since late Aug. Indonesia s rupiah jumped 9.2% against the greenback since Oct 2, Malaysia s ringgit rose 6.9%, while the Colombian peso advanced 5.2% EUR/USD 1 year performance GBP/USD 1 year performance Page I 5

6 COMMODITIES Brent and US crude oil futures rallied in the range of 9% past week, helped by a weakening dollar, US House of Representatives authorizing US crude oil exports and 6 th consecutive weekly drop in Baker Hughes US rig count Spot gold prices advanced 1.6% in the week as expectations that the Federal Reserve will continue to delay an interest rate hike pressured the US dollar LME zinc futures climbed ~9% in the week ended Oct 9 as commodities giant Glencore said it will cut 500,000 tons of annual zinc production to cut debt and buttress its balance sheet Copper futures rose 3.8% during the past 5 days as fears of broader supply cuts by Switzerland-based Glencore PLC triggered a buying spree in industrial metals ICE orange juice futures surged 10% during the week following a government forecast that placed 2015 orange crop in Florida at its lowest since Florida is the source of the most oranges used for US juice 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 declined 6.5% in the week as a bearish outlook on key palm oil data that will be released next week by the Malaysian Palm Oil Board and a stabilizing ringgit dampened market sentiment CBoT corn futures slipped ~1.7% this week after federal forecasters raised their outlook for US crop yields this autumn, again projecting the nation s third-biggest harvest ever WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES US 10-year bond yield climbed 9.5 basis points (bps) in the week to 2.09% as investors sold US government debt perceived as a safe investment in favor of riskier assets amid a global stock market rally Eurozone bonds slid and yields climbed this week after fixed-income was pushed aside by the rally in higher returning equity and commodity markets. Italian 10-year yield firmed 6 bps to 1.69% whereas Portuguese 10-year yield strengthened 10.6 bps to ~2.4% Spanish government bonds posted a 2 nd weekly advance relative to their German peers as improving market sentiment and speculation of more European Central Bank stimulus boosted demand for the euro region s higheryielding assets. Spain s 10-year yield rose 6 bps to 1.83% while German bund yields rose 11 bps this week to 0.62% China s sovereign bonds rallied, sending the 10-year yield down 3.4 bps past week to 3.218% on speculation the central bank will lower banks reserve requirements again to bolster growth in Asia s biggest economy The Bank of England kept interest rates on hold at 0.5% on Oct 8, where they have been since March 2009, amid signs that ultra-low UK inflation is here to stay for a while longer 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 The Reserve Bank of Australia left its cash rate target at a record low 2.0% on Oct 6, where it has remained since May, waiting to see whether the falling Australian dollar and a change of Prime Minister can do the heavy lifting in reviving the nation s economy 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 Russia 15.82% 15.82% 2 Jamaica 10.39% 10.65% 3 Argentina 9.59% 10.65% 4 Indonesia 9.07% 19.10% 5 Kazakhstan 8.24% 10.19% 6 Spain 7.35% 8.71% 7 Namibia 7.32% 10.38% 8 Norway 7.23% 11.13% 9 Luxembourg 6.89% 8.24% 10 Turkey 6.48% 9.42% Ref Country YTD Change YTD Change (USD Adj.) 1 Venezuela % % 2 Jamaica 39.69% 34.75% 3 Latvia 38.38% 29.91% 4 Hungary 31.91% 25.84% 5 Argentina 30.16% 17.90% 6 Malta 29.71% 21.78% 7 Denmark 26.05% 18.12% 8 Slovakia 23.94% 16.36% 9 Ireland 17.45% 10.27% 10 Italy 17.07% 9.91% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Ukraine -4.18% -7.26% 2 Laos -1.88% -1.74% 3 Bahrain -1.69% -1.65% 4 Nigeria -1.38% -1.70% 5 Latvia -1.28% -0.03% 6 Morocco -1.07% -0.29% 7 Mauritius -0.96% -0.33% 8 Kenya -0.90% -0.04% 9 Ghana -0.79% -1.58% 10 Malta -0.70% 0.56% Ref Country YTD Change YTD Change (USD Adj.) 1 Peru % % 2 Ukraine % % 3 Greece % % 4 Egypt % % 5 Colombia % % 6 Bulgaria % % 7 Slovenia % % 8 Cyprus % % 9 Laos % % 10 Nigeria % % Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Lumber 10.39% 2 Orange Juice 10.01% 3 Brent Crude 9.39% 4 WTI Crude 8.98% 5 Zinc 8.96% 6 Lead 8.34% 7 Platinum 8.02% 8 Gasoil 6.52% 9 Live Cattle 6.26% 10 Sugar 5.99% Ref Commodity YTD Pct Change 1 Rough Rice 13.10% 2 Cocoa 4.78% 3 Cotton 2.22% 4 Silver 0.88% Ref Commodity Weekly Change 1 Steel Rebar -7.96% 2 Palm Oil -6.51% 3 Aluminium -2.08% 4 Rough Rice -1.92% 5 Corn -1.67% 6 Cocoa -1.49% 7 Wheat -0.78% Ref Commodity YTD Pct Change 1 Steel Rebar % 2 Nickel % 3 Lumber % 4 Live Cattle % 5 Coffee % 6 Platinum % 7 Rubber % 8 Orange Juice % 9 Tin % 10 Bean Meal % 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