Weekly Market Review. July 31 st, 2016 August 6 th, 2016

Transcription

1 Weekly Market Review July 31 st, 2016 August 6 th,

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 Americas US non-farm payroll increased by 255,000 jobs in Jul (vs. an upwardly revised +292,000 jobs in Jun); beats forecast Personal spending inched up 0.4% in Jun (same as in May); slightly above estimates Consumer credit increased by $12.3bn in Jun (vs. a downwardly revised +$17.9bn in May) Europe Markit s Eurozone composite PMI strengthened to 53.2 in Jul (vs in Jun); reaching a 6-month high Retail sales increased 1.6% YoY in Jun (same as in May); below consensus Germany s factory orders slipped 0.4% MoM in Jun (vs. +0.1% in May) due to weak foreign demand Markit s UK manufacturing PMI slid to 48.2 in Jul (vs in Jun), lowest since Feb 2013 & indicating contraction Rest of the World China s official manufacturing PMI fell to 49.9 in Jul (vs in Jun), marginally below consensus reading of 50 Japan s manufacturing activity remained in contraction as Nikkei s PMI rose to 49.3 in Jul (vs in Jun) Japan's leading index, signaling the future economic activity, stood at 98.4 in Jun (same as in May) UAE s non-oil private sector growth quickened as Emirates NBD PMI rose to 55.3 in Jul (vs in Jun) Last Close 5 Day % YTD % P/E (2015) *Div. Yield S&P 500 2, DJI 18, Nasdaq Comp 5, Euro Stoxx FTSE 100 6, Dax 10, CAC 40 4, Nikkei , Hang Seng 22, Brazil - Bovespa 57, Russia - Micex 1, BSE Sensex 28, Shanghai Comp 2, ; *Current S&P year performance Euro Stoxx year performance Page I 3

4 GCC EQUITIES UAE Emaar Properties 2Q16 net profit increased 8% YoY to AED1.27bn. Revenue reached AED3.73bn Emirates Airline reportedly seeks to raise around $2.5bn to fund purchase of Airbus Group s A380 superjumbos Fitch affirmed Emirates Islamic Bank s long-term Issuer Default Rating (LT IDR) at A+ and upgraded DP World s LT IDR to BBB from BBB- ; outlook on both ratings is stable Aldar Properties 2Q16 net profit rose 9.7% YoY to AED657.4mn; agrees to refinance loans worth AED1.8bn Healthcare firm AVIVO Group plans to raiseusd500mn by listing in London in Mar 2017 Saudi Arabia Saudi Arabian Monetary Agency offered short-term loans worth SAR15bn to banks in late June to improve liquidity Saudi Arabia s cabinet plans to establish a $1.1bn fund to develop venture capital industry and support SME s Rest of GCC Qatar International Islamic Bank successfully completed issuance of QAR1bn Sukuk to maintain a higher CAR Gulf International Services 2Q16 net profit plunged 67.2% YoY to QAR81.8mn Ahli United Bank raised its stake in Commercial Bank of Iraq by 10% to 64.71% Last Close 5 Day % YTD % P/E (2015) *Div. Yield Dubai 3, Abu Dhabi 4, Saudi Tadawul 6, Qatar Index 10, Kuwait Index 5, Oman MSM 30 5, Bahrain All Share 1, Egypt EGX 30 8, Istanbul 100 Index 76, ; *Current DFMGI 1 year performance Saudi Tadawul 1 year performance Page I 4

5 CURRENCIES The US dollar index advanced 0.7% this week after release of a stronger than expected non-farm payroll and average hourly earnings data gave a strong fillip for a rate hike in 2016 British pound depreciated by 1.19% during the week against the US dollar after the Bank of England surprised markets by restarting its money printing program to buy government and corporate debt alongside the first interest rate cut in seven years Japanese yen appreciated against the US dollar by 0.24% as it remained choice of traders who continuously scout for the comfort of a safe-haven asset, amid an external environment that is still hurting investor sentiment towards riskier assets Brazilian real strengthened against the US dollar by 2.57% on speculation that a wave of monetary stimulus in developed markets will make Brazil s higher interest rates more attractive to foreign investors Russian ruble appreciated 0.72% against the US dollar as optimism global central banks will keep the cost of money low boosted the allure of a currency that has offered the second-best carry trade in emerging markets in 2016 Canadian dollar weakened against the greenback by 1.09% weighed on by another downturn in oil prices as well as surprisingly poor Canadian labor figures, which showed that employment in Jul declined by 31,200 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 EUR/USD 1 year performance GBP/USD 1 year performance Page I 5

6 COMMODITIES Brent crude futures gained 4.26% while WTI futures edged up 0.48% in the week, aided by short covering as investors shrugged off strong gains in the US dollar and another week of higher rig counts in US oil fields Gold prices in the spot market declined by 1.14% during the week on speculation that a stronger-than-expected nonfarm-payrolls report might provide the US Federal Reserve evidence to lift benchmark interest rates sooner than later The London Metals Exchange s (LME) copper futures fell 2.76% this week as traders reduced positions on the prospects of swelling supply Cotton futures increased by 3.34% in the week ended Aug 5, due to a fall in supplies by China and India, two major cotton producers and consumers 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 Sugar futures climbed 6.8% this week, buoyed by the strength of Brazil's currency, which makes sales less attractive to local producers and slow exports from the world s top supplier Baltic dry index declined by 3.05% from Jul 29 due to fairly large sell-off in the past few weeks after demand to ship raw materials ebbs as the summer season starts to wrap up WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES US 10-year yield jumped 13.5 basis points (bps) this week to 1.59% after data showing US employment increased more than expected in July and a wages rise boosted expectations for a 2016 Federal Reserve interest rate hike The Bank of England (BoE) slashed its benchmark interest rate by 25 bps to a record low of 0.25% on Aug 4, lowest in its 322-year history. The BoE also expanded asset purchase program by 60bn to cushion the economy from the aftershocks of the vote to leave the European Union Italy s government bond gained for a 3 rd week, sending 10-year yield 3 bps down to 1.135% after the BoE s decision to cut interest rates reinforced global trend toward easier monetary policy that supports fixed-income securities Thailand s central bank held its key interest rate unchanged for a 10 th consecutive policy session at 1.5% on August 3, citing that accommodative policy stance remained conducive for economic recovery amid the greater risk of global uncertainties Romania s central bank left its benchmark interest rate unchanged at a record-low 1.75%, painting a bleaker outlook for overcoming deflation as it targets to achieve an inflation rate of 2.5% by 2017 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 Australia's central bank lowered its key interest rate by 25 bps to 1.5%, with the rate now at a fresh record low, as the bank seeks to reinvigorate growth amid weak inflation and subdued wage growth 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 Indonesia 3.92% 3.57% 2 Poland 3.73% 5.03% 3 Mauritius 3.31% 3.78% 4 Egypt 2.80% 2.82% 5 Kazakhstan 2.56% 3.31% 6 Sri Lanka 1.93% 2.00% 7 Slovakia 1.86% 1.23% 8 Jordan 1.60% 1.38% 9 Namibia 1.59% 2.60% 10 Peru 1.21% 1.71% Ref Country YTD Change YTD Change (USD Adj.) 1 Peru 56.32% 59.93% 2 Brazil 33.01% 65.36% 3 Argentina 31.86% 14.90% 4 Kazakhstan 26.81% 23.67% 5 Russia 23.57% 23.57% 6 Namibia 22.04% 37.34% 7 Pakistan 20.03% 20.38% 8 Indonesia 18.01% 24.59% 9 Thailand 17.91% 21.06% 10 Egypt 17.83% 3.83% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Denmark -4.88% -5.42% 2 Venezuela -4.86% -4.86% 3 Vietnam -3.81% -3.83% 4 Czech Republic -3.62% -4.18% 5 Laos -3.15% -3.13% 6 Argentina -2.59% -1.43% 7 Ukraine -2.28% -2.32% 8 Nigeria -2.09% -1.93% 9 Zambia -2.07% 1.64% 10 Japan -1.90% -1.34% Ref Country YTD Change YTD Change (USD Adj.) 1 Italy % % 2 Zambia % % 3 China % % 4 Venezuela % % 5 Japan % 0.86% 6 Ireland % % 7 Portugal % % 8 Czech Republic % -9.32% 9 Laos % % 10 Greece % -9.04% Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Feeder Cattle 6.85% 2 Sugar 6.82% 3 Cocoa 6.56% 4 Palm Oil 5.52% 5 Orange Juice 5.01% 6 Brent Crude 4.26% 7 Gasoline 4.19% 8 Live Cattle 4.07% 9 Cotton 3.34% 10 Heat Oil 3.21% Ref Commodity YTD Pct Change 1 Silver 42.21% 2 Zinc 40.83% 3 Sugar 33.53% 4 Orange Juice 31.00% 5 Steel Rebar 29.33% 6 Platinum 28.52% 7 Bean Meal 27.05% 8 Tin 26.07% 9 Gold 25.83% 10 Lumber 25.23% Ref Commodity Weekly Change 1 Natural Gas -6.85% 2 Rough Rice -6.39% 3 Bean Meal -4.06% 4 Rubber -3.86% 5 Silver -3.08% 6 Corn -3.06% 7 Soybeans -2.78% 8 Copper -2.76% 9 Palladium -2.65% 10 Coffee -2.53% Ref Commodity YTD Pct Change 1 Rough Rice % 2 Live Cattle % 3 Wheat % 4 Feeder Cattle % 5 Corn -9.62% 6 Cocoa -5.92% 7 Lead -0.42% 8 Soybean Oil -0.10% 9 10 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