Weekly Market Review August 17, 2014 August 23, 2014

Transcription

1 Weekly Market Review August 17, 2014 August 23, 2014 August 24, 2014

2 CONTENTS International Equity Markets GCC Equities Currencies Commodities Interest Rates Page I 2

3 INTERNATIONAL EQUITY MARKETS US Fed s July meeting minutes hinted at a slack in job market, indicating interest rates might be lower for a longer time Markit s preliminary US manufacturing PMI rose to 58 in August, highest since April 10, from 55.8 in July US Conference Board s Leading Economic index gained 0.9% in July after a revised 0.6% rise in June Home construction in US jumped 15.7% in July, existing home sales gained in July while US homebuilders confidence rose in August CPI edged up 0.1% in July after increasing 0.3% in June and initial jobless claims fell last week by 14,000 ECB president Mario Draghi, said, ECB was ready to use all the tools at its disposal to lift euro zone inflation if it continued to drop Markit's composite flash PMI for Eurozone fell to 52.8 from July's A reading above 50 shows expansion The composite PMI in Germany fell to 54.9 in August from 55.7 in July Markit's composite PMI for France rose to 50.0 from 49.4 in July, revealing stagnant business activity UK inflation dropped 1.6% in July, making it less likely that BoE will raise rates this year UK annual house prices grew 10.2% in June, down from 10.4% in May Britain s retail sales grew 0.1% in July, down from 0.2% in June Japan's exports rose 3.9% YoY in July, whereas Imports rose 2.3%, leaving a deficit of 964bn Yen The Markit/JMMA flash Manufacturing PMI rose to 52.4 in August, up from a final reading of 50.5 in July The HSBC/Markit flash China Manufacturing PMI fell to 50.3 from July's reading of 51.7, heightening concerns about increasing softness in the economy The average price of new homes in 70 Chinese cities slid about 0.9% in July from June Brazil's current account deficit widens more than forecast in July to $6bn from $3.3bn in June Last Close Change 5 Day % YTD % S&P 500 1, DJI 17, Nasdaq Comp 4, Euro Stoxx FTSE 100 6, Dax 9, CAC 40 4, Nikkei , Hang Seng 25, Brazil - Bovespa 58, , Russia - Micex 1, BSE Sensex 26, Shanghai Comp 2, S&P year performance Euro Stoxx year performance Page I 3

4 GCC EQUITIES According to consultancy firm, EC Harris, announced and planned construction projects in UAE is expected to be worth $315bn in 2014, with $212bn worth of projects under implementation as of May 2014 UAE national banks customer deposits grew 80% in June 2014 to AED1,210.4bn as compared to Dec 2013 FT FDI Intelligence: UAE received $6.2bn in greenfield FDI in 2013, overall FDI grew for 4th consecutive year Mashreq bank launched the Gold Edge Invest account whereby customers can invest in gold electronically Dubai property developer, Nakheel is repaying all of its AED7.9bn worth of bank debt, 4 years ahead of schedule Airport retailer Dubai Duty Free is repricing a $1.75bn syndicated loan for the 2nd time in just over a year to obtain more favorable terms Abu Dhabi's Sudatel Telecom reported an 8 fold increase in its net income to $28mn in 1H2014. EBITDA margin in 1H2014 stood at 32% vs. 27% in 1H2013 Abu Dhabi s Al Hilal Bank raised $500mn from sale of Islamic Bonds to boost capital Dubai's Gulf General Investment reported an 85% YoY decline in 2Q2014 net profit to AED3.8mn. Revenue was down 2.7% YoY at AED361mn Saudi Aramco invests $30mn in US-based Siluria Technologies to produce low-cost gasoline from natural gas Saudi CMA published the draft rules wherein a single foreign investor could own no more than 5% of any listed firm, while all foreign institutions combined could own no more than 20% MSCI raised the weightings of three Qatari companies in its emerging market index, effective Aug 2014 end Standard Chartered Private Equity announced to invest $75mn for a 9.8% stake in Topaz Energy & Marine, a subsidiary of Oman based Renaissance Services Kuwait Petroleum Corporation signed a 10-year deal with China s Sinopec to export 300,000 barrels per day of crude oil, estimated to be worth $120bn Last Close Change 5 Day % YTD % Dubai 4, Abu Dhabi 5, Saudi Tadawul 10, Qatar Index 13, Kuwait Index 7, Oman MSM 30 7, Bahrain All Share 1, Egypt EGX 30 9, Istanbul 100 Index 78, , DFMGI 1 year performance Saudi Tadawul 1 year performance Page I 4

5 CURRENCIES The dollar gained 1.2% to $ per euro, its sixth-straight weekly rally, the longest since the period ending Jan. 13, 2012 on promising economic data The pound fell 0.7% in the week to touch $1.6572, its lowest level since April as UK inflation rose less than forecast The Canadian dollar traded at an almost four-month low as annual consumer price inflation in Canada slowed to 2.1% in July following June s 2.4% pace China's Yuan posted its biggest weekly loss since June after HSBC/Markit's preliminary manufacturing PMI came at 50.3 in August, below estimates Colombia s peso plunged 2.1% in the week, the most among major emerging-market currencies, on speculation dollar inflows into the country will slow The Philippine peso dropped 0.4% in the week to per dollar while Malaysia s ringgit declined 0.2% to 3.16 as dollar demand rose on Fed meeting minutes Argentina s peso sank 1.5% in the week to 8.4 per dollar as traders foresee a devaluation for the second time in The peso was earlier devalued 15% in the week ended Jan 24, 2014 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 Gold price slid nearly 2% in the week, its second straight weekly decline after Fed July meeting minutes hinted that Fed may raise interest rates earlier than anticipated Brent registered a second weekly loss as US crude production reached highest in 28 years and OPEC pumped more oil in July despite conflicts in West Asia and Africa Copper prices gained 3.2% in the week on speculation that demand will increase after stronger-than-expected housing data in US. HSBC/Markit flash manufacturing PMI for China showing expansion also helped prices advance Palm oil tumbled below $633 a metric ton for the first time in more than five years as forecasts for a record US harvest of soybeans used to produce an alternative oil threaten to curb demand Wheat futures in Chicago rose the most in a week on speculation that a global grain surplus will be smaller than forecast after Canada reported a 26% drop in output and rains delayed the US harvest 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 1, Baltic dry index hit a four month high of 1,096 on Aug 21 and closed at 1,088, up 7.2% in the week WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES The 10-year UK gilt yield rose 8bps in the week to 2.41% as below forecast inflation reduced bets that BoE is close to raising interest rates Italian 10-year government bond yields fell to a record low in the week on bets European Central Bank officials will maintain monetary stimulus even as their peers in the UK and US consider tighter policy Spain s 10-year yields dropped to end the week at 2.38%, a drop of 2bps from Aug. 15 as reports showed euro-area manufacturing and services grew at a slower pace in August and consumer confidence declined Five year US treasury note yields surged and the difference with 30-year US securities yield flattened in the week as Fed Chairperson Janet Yellen said rates may go up sooner than estimated driven by labor market improvements China s seven-day repurchase rate, a gauge of funding availability between banks, fell three basis points in the week to 3.5% on optimism policy makers will ensure ample funds in the financial system to aid economic growth India s 10 year benchmark ended almost flat at 8.52%. Overseas funds bought a net $2.6bn of government and corporate notes on Aug. 20, the biggest single-day inflow in figures going back to 2002 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 Thailand s 10 year sovereign bonds fell this week, the most in two months and yields rose 5bps to 3.62% as its GDP increased 0.4% YoY in 2Q2014, avoiding slipping into recession and fading chances of an interest rate cut 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 Venezuela 6.72% 6.72% 2 Argentina 5.78% 4.26% 3 Slovenia 4.55% 3.31% 4 Greece 3.75% 2.52% 5 Cyprus 3.25% 2.02% 6 Portugal 3.08% 1.86% 7 Finland 2.97% 1.75% 8 Turkey 2.92% 2.53% 9 Montenegro 2.78% 1.56% 10 Spain 2.72% 1.50% Ref Country YTD Change YTD Change (USD Adj.) 1 Argentina 70.12% 32.00% 2 UAE Dubai 45.63% 45.62% 3 Kazakhstan 41.56% 19.91% 4 Egypt 38.19% 34.23% 5 Ukraine 36.36% % 6 Qatar 32.72% 32.73% 7 Saudi Arabia 25.76% 25.77% 8 Slovenia 24.83% 20.28% 9 India 24.79% 27.53% 10 Vietnam 22.89% 22.31% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Ukraine -1.88% -4.96% 2 Malta -0.86% -2.03% 3 Lebanon -0.76% -0.76% 4 Egypt -0.75% -0.84% 5 Namibia -0.66% -1.58% 6 Slovak Republic -0.61% -1.79% 7 Israel -0.61% -1.88% 8 Hong Kong -0.41% -0.41% 9 South Korea -0.32% -0.42% 10 Botswana -0.19% -1.25% Ref Country YTD Change YTD Change (USD Adj.) 1 Portugal % % 2 Russia % % 3 Malta % % 4 Jamaica % % 5 Austria -9.74% % 6 Latvia -7.15% % 7 Venezuela -6.49% -6.49% 8 Estonia -4.74% -8.21% 9 Japan Nikkei -4.62% -3.37% 10 Hungary -4.10% % Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Bean Meal 11.59% 2 Cotton 6.07% 3 Soybeans 5.76% 4 Zinc 3.52% 5 Copper 3.27% 6 Aluminium 3.15% 7 Rubber 3.01% 8 Lumber 2.06% 9 Lead 1.74% 10 Natural Gas 1.69% Ref Commodity YTD Pct Change 1 Coffee 64.05% 2 Nickel 34.89% 3 Feeder Cattle 29.63% 4 Palladium 23.57% 5 Cocoa 17.98% 6 Aluminium 14.60% 7 Zinc 14.45% 8 Ethanol 13.66% 9 Live Cattle 12.90% 10 Lean Hogs 8.72% Ref Commodity Weekly Change 1 Palm Oil -6.69% 2 WTI Crude -3.80% 3 Coffee -3.79% 4 Platinum -2.66% 5 Lean Hogs -2.19% 6 Gold -1.81% 7 Sugar -1.76% 8 Orange Juice -1.62% 9 Soybean Oil -1.55% 10 Tin -1.54% Ref Commodity YTD Pct Change 1 Natural Gas/ICE % 2 Rubber % 3 Palm Oil % 4 Cotton % 5 Rough Rice % 6 Soybean Oil % 7 Corn % 8 Soybean % 9 Steel Rebar -9.21% 10 Gasoil -8.90% 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