Weekly Market Review July 10, 2016 July 16, 2016

Transcription

1 Weekly Market Review July 10, 2016 July 16, 2016 July 17, 2016

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 The IMF kept unchanged US growth forecasts at 2.2% in 2016 & 2.5% in 2017 citing negligible impact of Brexit Retail sales grew 0.6% in Jun after edging up 0.2% in May; better than forecasts Consumer prices inched up 0.2% in Jun (same as in May), driven partly by increase in energy prices Europe Eurozone s GDP is expected to grow by 1.6% in 2016, driven by consumption, according to Insee, Istat and Ifo Eurozone s consumer prices edged up 0.1% YoY in Jun after sliding 0.1% in May Industrial production declined 1.2% MoM in May (vs. +1.4% in Apr). However, it grew 0.5% on YoY basis Bank of France left unchanged France s 2Q16 GDP growth forecast at 0.2% Germany s consumer prices increased 0.3% YoY in Jun (vs. +0.1% in May); matches preliminary estimates Theresa May formally appointed as 13th PM as well as 2 nd female PM of the UK, replacing David Cameron Rest of the World China s 2Q16 GDP expanded 6.7% YOY, same as in 1Q16 and marginally above consensus forecasts of 6.6% Exports, in USD terms, slipped 4.8% YoY in Jun whereas imports fell 8.4% Cabinet office slashed Japan s FY17 growth forecast to 0.9% (vs. +1.7% predicted in January) 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 21, Brazil - Bovespa 55, Russia - Micex 1, BSE Sensex 27, Shanghai Comp 3, ; *Current S&P year performance Euro Stoxx year performance Page I 3

4 GCC EQUITIES UAE Capital Intelligence affirmed Commercial Bank of Dubai s Financial Strength Rating at BBB+ with stable outlook JV of Arabtec Construction & Turkey-based TAV secured financing worth AED1.05bn from Mashreq & Arab Bank Abu Dhabi s 4Q15 GDP grew 7.7% YoY, reaching AED196.1bn; non-oil inflation adjusted GDP rose 8.8% YoY in 4Q15 Union National Bank s net profit declined 17.3% YoY to AED469.5mn in 2Q16 Saudi Arabia Royal Dutch Shell seeks up to $2bn from Saudi Aramco as part of the breakup of their joint venture in the US Banque Saudi Fransi s 2Q16 net profit expand 3.2% YoY to SAR1.05bn; above forecasts of SAR1.03bn Kingdom Holding Co. completed acquisition of 5.8% stake in France-based AccorHotels worth $3.2bn Saudi Binladin Group reportedly repaid SAR1bn worth of Sukuk matured in late June after delay of several weeks Rest of GCC Qatar National Bank s 2Q16 net profit rose 16% YoY to QAR3.38bn aided by its acquisition of Turkey s Finansbank Qatar Airways Group s FY15-16 net profit reached QAR1.6bn (vs. QAR374mn in FY14-15) with a net margin of 4.5% S&P affirmed long-term corporate credit rating on Ooredoo at A- with a stable outlook 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 7, Istanbul 100 Index 82, ; *Current DFMGI 1 year performance Saudi Tadawul 1 year performance Page I 4

5 CURRENCIES The US dollar index increased against other major currencies by 0.29% this week, after strong US and China economic data drove the Japanese Yen lower as investors continued to focus on upcoming central bank meetings amid growing expectations for additional stimulus measures British pound appreciated against the US dollar by 1.84%, as the Bank of England refrained from adding potentially currency-debasing stimulus and the appointment of Theresa May as Prime Minister eased concerns over leadership Japanese yen depreciated against the greenback by 4.32%, following a string of strong US economic data and expectations of powerful monetary and fiscal stimulus from Japan Canadian dollar rose against the US dollar by 0.54% after the Bank of Canada held its benchmark interest rate unchanged and downplayed the impact of the UK vote to leave the European Union and weaker US demand, stating export-driven growth is coming Brazilian real appreciated against the US dollar by 0.6% in spite of the central bank s efforts to limit gains, amid investor optimism that the interim government will win lawmakers support for measures to cut the budget deficit and stimulate growth Russian ruble strengthened against the US dollar by 0.28%, with the economy recording current-account surplus in 1H2016 of $15.9bn amid prospects for stimulus in major economies even as oil prices stabilize 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, WTI crude rose 1.82% and 1.19%, respectively, in the week ended Jul 15 after data showed US retail sales rose more than expected in Jun, reinforcing views of steady economic growth in 2Q16 The ICE cotton futures jumped 12.0% in the week as the US Department of Agriculture estimated global stockpiles would drop 9 mn bales on year by July 2017, lower than its previous estimates Gold prices slipped 2.11% from Jul 8 as global risk sentiment improved and US dollar strengthened after the release of better-than-expected US data, such as, retail sales, consumer prices, industrial production Steel rebar prices rallied by 9.86% to 10-week high during the week after a local government in China s top producing province ordered mills to restrict output at a time when inventories have shrunk to at least a 6-year low COMEX copper futures increased by 5.29% over the past five trading days aided by the release of better-thanexpected 2Q16 economic growth data for China and prospects of delay of an interest rate hike in the US 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 The LME zinc futures rose 2.89% this week on the back of increased risk appetite among investors after the selection of a new British Prime Minister and on hopes of more stimulus WTI Crude 1 year performance GOLD 1 year performance Page I 6

7 INTEREST RATES 10-year US yield jumped 19.3 basis points (bps) to 1.55% due to a broad wave of sell-off, suggesting sentiment in the financial markets is shifting away from gloom and doom that was heightened right after the UK s vote in late June to quit the European Union The Bank of England kept interest rates unchanged at 0.5% on Jul 14, as it refrained from injecting more money into the British economy, defying market expectations of an interest rate cut Malaysia s central bank cut its interest rate, for the first time in seven years, to 3.0% from 3.25% on Jul 13 to bolster a slowing economy amid fears of greater volatility in global growth following Britain's decision to leave the European Union The Bank of Canada maintained its target for the overnight rate at 0.5%, as the overall balance of risks, including inflation, remains within the zone for the current monetary stance, according to the governing council South Korea s central bank held its benchmark interest rate at a record low of 1.25% on Jul 14, while cutting its projection for growth and inflation amid uncertainty to the economic outlook and hit to consumption anticipated from the implementation of an anti-corruption law 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 Chile s central bank, on Jul 14, left its benchmark interest rate at 3.5% for the seventh consecutive month, as a weak economy gradually pulls inflation back toward the target range of 2-4% from an actual 4.2%, at present 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 Japan 9.21% 4.15% 2 Austria 6.99% 7.06% 3 Argentina 6.49% 4.89% 4 Czech Republic 6.45% 6.53% 5 Namibia 6.34% 7.61% 6 Turkey 6.16% 6.11% 7 Egypt 5.57% 5.58% 8 Hong Kong 5.33% 5.38% 9 Qatar 4.66% 4.71% 10 Kazakhstan 4.64% 4.42% Ref Country YTD Change YTD Change (USD Adj.) 1 Peru 46.34% 52.37% 2 Argentina 33.99% 16.04% 3 Brazil 28.21% 55.24% 4 Russia 27.30% 27.30% 5 Kazakhstan 19.80% 20.30% 6 Pakistan 19.42% 19.56% 7 Namibia 17.95% 27.30% 8 Colombia 16.11% 26.31% 9 Thailand 15.84% 19.34% 10 Philippine 15.51% 15.67% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Kenya -1.92% -2.04% 2 Malta -1.55% -1.49% 3 Ghana -0.82% -1.60% 4 Botswana -0.75% 0.22% 5 Mauritius -0.44% -0.41% 6 Latvia -0.26% -0.20% 7 Bulgaria -0.20% -0.13% 8 Nigeria -0.17% -0.17% 9 Slovenia -0.13% -0.07% 10 Zambia -0.08% -0.71% Ref Country YTD Change YTD Change (USD Adj.) 1 Italy % % 2 Zambia % -9.97% 3 Venezuela % % 4 Ireland % % 5 Portugal % % 6 China % % 7 Japan % -1.16% 8 Greece % % 9 Ghana % % 10 Spain % -9.00% Page I 8

9 COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Cotton 12.04% 2 Steel Rebar 9.86% 3 Lumber 7.72% 4 Rubber 6.81% 5 Palladium 5.31% 6 Gasoline 3.74% 7 Lead 3.08% 8 Zinc 2.89% 9 Coffee 2.07% 10 Soybean Oil 2.05% Ref Commodity YTD Pct Change 1 Silver 45.99% 2 Bean Meal 39.77% 3 Zinc 36.98% 4 Orange Juice 31.32% 5 Steel Rebar 30.74% 6 Lumber 30.51% 7 Lean Hogs 30.31% 8 Brent Crude 27.71% 9 Heat Oil 26.96% 10 Sugar 26.71% Ref Commodity Weekly Change 1 Natural Gas -4.67% 2 Orange Juice -2.70% 3 Feeder Cattle -2.70% 4 Lean Hogs -2.65% 5 Bean Meal -2.46% 6 Cocoa -2.26% 7 Gold -2.11% 8 Aluminium -2.10% 9 Ethanol -1.89% 10 Platinum -1.77% Ref Commodity YTD Pct Change 1 Live Cattle % 2 Feeder Cattle % 3 Wheat -9.63% 4 Rough Rice -9.04% 5 Cocoa -4.55% 6 Palm Oil -4.09% 7 Corn -1.81% 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