Weekly Market Roundup. May 22, 2016 May 28, 2016

Transcription

1 Weekly Market Roundup May 22, 2016 May 28, 2016

2 Table of Contents International Equity Markets GCC Equity Market Currencies Commodities Interest rates 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. Equity & Commodity Top/ Bottom Markets

3 International Equity Markets Last Close 5 Day % YTD % P/E (2016) *Div. Yield S&P 500 2, DJI 17, Nasdaq Comp 4, Euro Stoxx FTSE 100 6, Dax 10, CAC 40 4, Nikkei , Hang Seng 20, Brazil - Bovespa 49, Russia - Micex 1, Americas US 1Q16 GDP rose 0.8% (vs. initial estimate of +0.5% and 1.4% growth recorded in 4Q15) o Conference Board s leading economic index advanced 0.6% in Apr after remaining flat in Mar US new home sales surged 16.6% to 619,000 in Apr (vs. 531,000 in Mar), highest since Jan 2008 & above consensus Europe Eurozone s flash consumer confidence index improved to -7 in May (vs in Apr), better than estimates o Markit s flash composite PMI slipped to 16-month low of 52.9 in May (vs. 53 in Apr), below forecasts Ifo Institute s business climate indicator for Germany rose to in May (vs in Apr), highest since Dec 2015 UK s 1Q16 GDP expanded 0.4% QoQ (vs. +0.6% in 4Q15), posting 13th consecutive quarter of positive growth o Retail sales balance rebounded to +7% in May (vs. -13% in Apr), below consensus estimates of +8% Rest of the World China's industrial profits grew 4.2% YoY in Apr (vs % in Mar). During Jan-Apr, industrial profits rose 6.5% YoY Japan s trade surplus reached 823.5bn in Apr (vs bn in Mar) as exports fell 10.1% & imports declined 23.3% o All-industry activity index inched up 0.1% in Mar (vs. -0.9% in Feb) due to increase in industrial output o Leading index, measuring future economic activity, advanced to 99.3 in Mar (vs in Feb) BSE Sensex 26, Shanghai Comp 2, Source: Bloomberg, Mashreq Private Banking; *Current 3

4 GCC Equity Market UAE DP World launched 7-year $1.2bn Sukuk issue to fund partrepurchase of its $1.5bn Sukuk, due to mature in 2017 Emirates Islamic Bank launched sale of $750mn Sukuk with 5 years duration Noor Bank launched 5-year Sukuk issue worth $500mn with perpetual tenor and an option to redeem after 5 years Last Close 5 Day % YTD % P/E (2016) *Div. Yield Dubai 3, Abu Dhabi 4, Saudi Tadawul 6, Qatar Index 9, Kuwait Index 5, Oman MSM 30 5, Bahrain All Share 1, Egypt EGX 30 7, Istanbul 100 Index 78, Dubai Group intends selling 48.4% stake in Shuaa Capital & divest holdings in EFG Hermes and Bank Muscat in 2016 Etihad Airways equity partnership group, consisting of itself, Etihad Airport Services, Air Berlin, Air Serbia, Air Seychelles and Alitalia, raised $500mn in new financing Saudi Arabia GE and Saudi Arabian Industrial Investments Co. signed $3bn MoU to help develop local manufacturing industry Saudi Cement Co. inked contract to sell 40% stake worth ~SAR24.7mn in Kuwait-based Group International Cement; announced an interim dividend of SAR2.75 per share for 1H16 Rest of GCC Qatar reportedly sold $9bn worth Eurobonds, marking the largest-ever bond issue in the Middle East Qatar National Bank successfully closed syndication of its 3-year 2.25bn senior unsecured Euro term loan facility Warba Bank carried $155mn Shari ah-compliant finance deal in favor of Turkey-based Ziraat Bank Source: Bloomberg, Mashreq Private Banking; *Current 4

5 Currencies 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 Japanese yen slipped for a fourth consecutive week by 0.15% against the US dollar as sharp rally in the US S&P 500 index and broader risk pushed the JPY lower Chinese yuan slipped for a fourth month by 0.25% this week to a 3-month low against the greenback, with the market preparing for a more volatile yuan in the near future as the US Fed is expected to hike rates further in Jun Canadian dollar strengthened by 0.7% against its US counterpart during the week ended May 27 as crude oil prices gained and moved briefly above $50 per barrel, while the market s expectation of future volatility for the currency fell to its lowest in four months Brazilian real depreciated 2.56% against US dollar over the past five trading days as the country s ongoing political crisis weakened expectations that a new economic team will be able to fix Brazil s economy quickly Russian ruble appreciated 1.34% against US dollar from May 20, as global oil prices strengthened this week, crossing $50 per barrel mark for the first time since Nov 2015 Indian rupee appreciated by 0.61% against US dollar, led by solid performance by local equity markets and increased selling of US currency by exporters and banks amid higher foreign inflows Foreign Exchange Solutions Wide range of foreign currencies and FX services from Mashreq Learn More 5 Source: Bloomberg, Mashreq Private Banking

6 Commodities 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 US WTI & Brent crude futures gained further this week by 1.23% & 3.31%, respectively. Prices were supported by global supply shock and the US Energy Information Administration (EIA) data that showed crude inventories fell 4.2mn barrels at the end of previous week (vs. consensus estimates of 2.5mn) Baltic Dry Index Source: Bloomberg, Mashreq Private Banking Gold prices declined 3.13% during the week ended May 27 as the US dollar rallied and investors raised bets on the Federal Reserve increasing interest rates as early as in Jun 2016 Copper futures gained 2.7% from May 20 as new home sales in the US reached 8-year high, boosting demand for the metal, and as short traders closed out their positions being unsure about the short-term market direction due to mixed signals from top metals consumer China Corn futures climbed 4.63% in the week as buying resumed in the grain market due to ongoing export demand and rainfall continues to delay planting in the US and on news that China made large purchases Wheat futures rose 2.94% this week on short covering and as rains pummeled ripe wheat fields from northern Texas into southern Oklahoma, either stalling harvest or preventing it from starting altogether Sugar prices increased 2.64% over the past five trading days as global demand stayed strong in the face of shrinking supplies and investors bought the sweetener in anticipation of a price rise Apply Now 6

7 Interest Rates 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 Source: Bloomberg, Mashreq Private Banking The 10-year US government bond yield edged up 1.26 basis points (bps) to 1.85% after the Federal Reserve Chair Janet Yellen said gradual US interest rate increases would be appropriate in coming months if the economy improves further and the labor market tightens Bank of Canada kept its key interest rate unchanged at 0.5% on May 25, warning that wildfires in oil-rich Alberta will damp growth in 2Q16 as the economy continues to adjust to lower oil prices Turkey s central bank cut its overnight lending rate to 9.5% from 10% on May 24, shortly after a new cabinet line-up was unveiled by the incoming Prime Minister, Binali Yildirim, a loyalist of President Recep Tayyip Erdogan Central bank of Colombia lifted its key rate by a quarter point to 7.25% on May 27 as inflation unexpectedly eased to 7.93% in Apr (after reaching 15-month high in Mar) and evidence grew economy is cooling faster than forecasted National Bank of Ukraine trimmed its benchmark interest rate for a 2nd month to 18% from 19% on May 26, citing disinflation as a result of weak domestic consumer demand, tight monetary policy and an appreciation of the local currency (hryvnya) Kenya s central bank slashed its benchmark rate by 1% to 10.5% on May 23 as inflation fell to 5.27% in Apr from 6.45% in Mar, well within the government s preferred band of % Benefit from higher and attractive interest rates with our Certificate of Deposit Learn More

8 Equity Markets Top Performers WEEKLY Country/ Market Weekly Change Weekly Change (USD Adj.) 1 Nigeria 6.53% 6.53% 2 India 5.34% 6.03% 3 Ireland 4.41% 3.70% 4 Kazakhstan 4.32% 3.96% 5 Taiwan 4.09% 4.58% 6 Belgium 3.93% 3.22% 7 Spain 3.83% 3.13% 8 Netherlands 3.82% 3.11% 9 Dubai UAE 3.75% 3.75% 10 Germany 3.73% 3.03% Equity Markets Bottom Performers YTD Country/ Market YTD Change YTD Change (USD Adj.) 1 Peru 37.61% 39.80% 2 Russia 21.20% 21.20% 3 Kazakhstan 20.65% 22.12% 4 Namibia 14.59% 13.33% 5 Brazil 13.15% 24.26% 6 Hungary 12.92% 16.48% 7 Colombia 12.88% 16.72% 8 Pakistan 11.82% 12.00% 9 Slovakia 11.40% 14.18% 10 Estonia 10.99% 13.76% 8 WEEKLY Country/ Market Weekly Change Source: Bloomberg, Mashreq Private Banking Weekly Change (USD Adj.) 1 Ukraine -3.75% -4.13% 2 Saudi Arabia -3.18% -3.13% 3 Serbia -2.41% -3.60% 4 Morocco -1.90% -2.26% 5 Laos -1.75% -1.65% 6 Malta -1.65% -2.32% 7 Colombia -1.52% -2.23% 8 Brazil -1.35% -3.24% 9 Vietnam -1.09% -1.39% 10 Qatar -0.99% -1.01% YTD Country/ Market YTD Change YTD Change (USD Adj.) 1 China % % 2 Italy % % 3 Mongolia % % 4 Zambia % -7.64% 5 Japan % -3.29% 6 Ghana % % 7 Bahrain -9.63% -9.62% 8 Ukraine -9.09% % 9 Romania -7.59% -5.03% 10 Czech Republic -6.89% -4.59%

9 Commodity Markets Top Performers WEEKLY Commodity Weekly Change 1 Rubber 6.10% 2 Natural Gas 5.19% 3 Corn 4.63% 4 Cotton 4.23% 5 WTI Crude 3.31% 6 Cocoa 3.19% 7 Ethanol 3.18% 8 Wheat 2.94% 9 Copper 2.70% 10 Sugar 2.64% Commodity Markets Bottom Performers YTD Commodity YTD % Change 1 Bean Meal 52.33% 2 Gasoil 37.47% 3 Heat Oil 35.73% 4 Lean Hogs 34.66% 5 WTI Crude 33.18% 6 Brent Crude 32.30% 7 Gasoline 28.79% 8 Soybeans 24.71% 9 Lumber 20.07% 10 Ethanol 18.36% 9 WEEKLY Commodity Weekly Change 1 Rough Rice -8.54% 2 Platinum -4.53% 3 Palladium -4.01% 4 Gold -3.13% 5 Coffee -2.73% 6 Orange Juice -2.40% 7 Silver -1.82% 8 Tin -1.52% 9 Feeder Cattle -1.30% 10 Live Cattle -1.12% Source: Bloomberg, Mashreq Private Banking YTD Commodity YTD % Change 1 Feeder Cattle % 2 Live Cattle % 3 Natural Gas -7.19% 4 Rough Rice -6.92% 5 Cocoa -6.42% 6 Lead -5.24% 7 Nickel -4.54% 8 Palladium -4.35% 9 Coffee -4.26% 10 Copper -0.98%

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