Weekly Market Review. 24 th February nd March 2014

Transcription

1 Weekly Market Review 24 th February nd March 2014

2 Contents International Equity Markets GCC Equity Markets Currencies Commodities Interest Rates

3 International Equity Markets S&P index touched its all time high on the back of positive data points from the housing market and improving consumer confidence index. FED s encouraging statements about supporting the economy and not going too stringent on tapering also helped the stocks gain Emerging market stocks rose as china s YUAN tumbled the most on record spurred by speculation that the central bank will widen the trading band Canadian stocks ended the week almost flat as gains from the energy stocks was offset by a fall in large mining stocks. The economy seems to be on the right track, growing by 2.9% in Q4 compared with the 2.7% in the prior 3 months as consumer spending increased European stocks rose for a fourth week as companies from Scania AB to Dixons Retail Plc rallied amid a resurgence in mergers-and-acquisitions activity India s Sensex posted a stupendous weak, shrugging off the weaker than expected Q3 FY14 GDP. Last quarter GDP rose merely 4.7%, compared with a 4.8% rise the previous quarter. This is the seventh consecutive quarter of sub 5 percent growth S&P DJI Nasdaq Comp Euro Stoxx FTSE Dax CAC Nikkei Hang Seng Brazil - Bovespa Russia - Micex BSE Sensex Shanghai Comp S&P Index 1 year performance Euro Stoxx 50-1 year performance

4 GCC Equities DFM closed the week flat as investors took profit off the table as the rally had made many stocks especially the real estate players valuations expensive Gulf Pharmaceutical Industries registered a 14.9% year-on-year growth in net profit to Dh230.4 million. Sales during the year rose 15.4% to Dh1,362.1 million, driven by the private market sales which saw a growth of 19.4% Mesaieed Petrochemical Holding rose more than five fold on its first day of trading after completing the country s biggest initial public offering in five years Moody s said Egypt s banking system outlook remains negative. The negative outlook, unchanged since 2011, reflects continuing political and social tensions and the government s strained finances, which continue to undermine investor and consumer confidence. However, Egypt s military-backed government resigned after eight months in office which gave the EGX a relief rally Abu Dhabi Commercial Bank (ADCB) became the first Gulf lender to sell dollar bonds this year. It sold $750 million of five-year notes yesterday to yield 1.4% points over the benchmark midswap rate Dubai Abu Dhabi Saudi Tadawul* Qatar Index Kuwait Price Index Oman MAM Bahrain All Share Egypt EGX Istanbul 100 Index Nakheel said it has initiated early repayment of 2.35 billion Dirhams ($639.8 million) of bank debts 18 months ahead of maturity in September 2015 DFM Index 1 year performance Qatar Index 1 year performance

5 Currencies Dollar index slid below the 80 mark as tension rises on Ukraine shores, making speculators cautious on trading the currency basket Indonesia s rupiah led a rally in Asian currencies this month, posting its biggest gain since 2009, as signs the U.S. economy is losing momentum fueled speculation the Federal Reserve will cut stimulus more slowly. Reduction in country s current account deficit (from 3.85% to 1.98%) also adds to the rally. Foreign reserves climbed above $100 billion in January for the first time since May. The yuan slid ~1% percent to per dollar in Shanghai, its biggest monthly loss since official and market exchange rates were unified at the start of 1994 The euro had its biggest monthly gain since April as higher-than-projected inflation spurred speculation the European Central Bank will refrain from additional monetary stimulus at a meeting this week. The Indian rupee strengthened to its highest in more than a month boosted by bunched-up dollar inflows and selling by exporters, and aided by gains in the euro, which improved risk appetite. In the offshore non-deliverable forward PNDF, the one-month contract was at while the three-month was at EUR / USD GBP / USD AUD / USD USD / JPY USD/ CHF USD/ CAD USD/ BRl USD/ RUB USD/ INR USD/ CNY DXY Index YUAN 1 year movement EURO 1 year movement

6 Commodities Holdings in exchange-traded products backed by the metal climbed 0.4 percent in February, the first increase in 14 months, data compiled by Bloomberg show. Assets declined last year for the first time since the products were introduced in 2003 India raises the benchmark import price of gold to $433 per 10 grams from $421 earlier Copper slipped to the lowest price in more than two months amid concern that China s growth is slowing and as stockpiles rose in the biggest user Wheat rose to the highest in more than two months on speculation freezing temperatures in the Midwest may damage crops in the U.S., the world s top exporter, and dry conditions in the Black Sea region may stress plants. Profit booking towards the later part of the week, kept the prices subdued Crude inventories climbed by 68,000 bbl to 362.4m last week Gold spot Silver spot Copper-CMX Brent - ICE WTI - Nymex Wheat- CBOT Corn- CBOT Soybean- CBOT S&P GSCI Spot Index Baltic Dry Index WTI 1 year chart Gold spot 1 year chart

7 Interest Rates The cost of swapping euro funding streams for those in dollars to service foreign loans fell this year to the lowest since January The cross- currency basis swap has shrunk from a three-year high reached in 2011 as Europe s banks focused on shrinking their balance sheets instead of expanding abroad U.S. banks are leading a shift in how banks account for their bond investments after a $44 billion plunge in value exposed a potential drain on capital under new rules. The largest U.S. lenders are moving assets into the held- to-maturity column of their books instead of designating them as available for sale The difference in yields on 10-year notes and inflation- protected debt, known as the break-even rate, widened by 0.02 percentage point to 2.18 percentage points, due to a pickup in consumer spending Greek bond yields are back below 7 percent as signs Europe is putting the debt crisis behind it boost demand for the region s assets Germany s Aaa credit-rating outlook was increased to stable from negative by Moody s Investors Service, which cited increased cooperation among European Union members to reduce economic contagion in the region. USD- 1w Libor USD - 3m Libor USD - 6m Libor USD - 10yr AED-1m EIBOR AED-3m EIBOR AED-12m EIBOR UK - 10yr Japan - 10yr U.S. 10 year generic bond yield 1 year performance UK 10 year bond yield 1 year performance

8 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.