Weekly Market Review May 15, 2016 May 21, 2016 May 22, 2016
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
INTERNATIONAL EQUITY MARKETS Americas US consumer prices rose 0.4% in Apr (vs. +0.1% in Mar) due to higher energy prices; marginally above estimates Industrial production edged up 0.7% in Apr after falling 0.9% in Mar, led by a jump in utilities output NAHB/Wells Fargo US Housing Market Index remained unchanged at 58 in May (vs. Apr); slightly below consensus Conference Board s US leading economic index inched up 0.6% in Apr after remaining unchanged in Mar Europe Eurozone s trade surplus reached a 3-month high of 22.3bn in Mar as imports slid 2.7% while exports fell 1.3% Harmonized index of consumer prices (HICP) slipped 0.2% YoY in Apr (vs. flat in March) German producer prices fell 3.1% YoY in Apr (same as in Mar), clocking the biggest decline since Jan 2010 Confederation of British Industry cut 2016 & 2017 UK growth outlook to 2% (vs. +2.3% & +2.1% respectively, earlier) Rest of the World Japan s 1Q16 GDP expanded 0.4% QoQ (vs. a downwardly-revised -0.4% in 4Q15); beats forecasts Core machine orders jumped 5.5% MoM in Mar after declining 9.2% in Feb; more than forecasts House prices in 65 out of 70 Chinese cities gained MoM in Apr; On YoY basis, prices rose in 46 out of 70 cities Last Close 5 Day % YTD % P/E (2015) *Div. Yield S&P 500 2,052.32 0.28 0.41 17.48 2.21 DJI 17,500.94-0.20 0.44 16.30 2.62 Nasdaq Comp 4,769.56 1.10-4.75 17.74 1.35 Euro Stoxx 600 338.01 0.99-7.60 15.50 3.74 FTSE 100 6,156.32 0.29-1.38 16.52 4.55 Dax 9,916.02-0.37-7.70 12.49 3.34 CAC 40 4,353.90 0.78-6.11 14.63 3.62 Nikkei 225 16,736.35 1.97-12.07 16.23 1.93 Hang Seng 19,852.20 0.67-9.41 10.77 4.34 Brazil - Bovespa 49,722.75-4.02 14.70 13.18 3.51 Russia - Micex 1,891.33-0.83 7.38 7.11 4.49 BSE Sensex 25,301.90-0.74-3.12 16.12 1.54 Shanghai Comp 2,825.48-0.06-20.17 12.90 2.19 ; *Current S&P 500 1 year performance Euro Stoxx 600 1 year performance Page I 3
GCC EQUITIES UAE Drake & Scull International s 1Q16 net profit plunged 61% YoY to AED9.8mn; revenue fell 7.2% YoY to AED1.03bn Network International closed $350mn-equivalent, 6-year loan to finance Emerging Markets Payments acquisition Moody s Investors Service confirmed the long-term ratings of National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, Union National Bank, Al Hilal Bank and Abu Dhabi Islamic Bank; assigned negative outlook to all DP World Ltd. launched tender offer to buy back Sukuk worth up to $750mn due to mature in 2017 Saudi Arabia Saudi Electricity Co. signed $900mn loan deal with the Export-Import Bank of Korea and other international lenders Moody s downgraded long-term deposit ratings of SAMBA Financial Group, Banque Saudi Fransi, Saudi British Bank, Arab National Bank, Riyad Bank, Saudi Hollandi Bank, Saudi Investment Bank, Bank AlBilad, Bank Al-Jazira & confirmed ratings of Al Rajhi Bank & National Commercial Bank; ratings carry stable outlook Rest of GCC Moody s confirmed & downgraded Qatar National Bank s & The Commercial Bank s long-term deposit ratings with a negative & stable outlook, respectively Capital Intelligence downgraded Oman Arab Bank s Financial Strength Rating to BBB from BBB+ Last Close 5 Day % YTD % P/E (2015) *Div. Yield Dubai 3,229.87-3.43 2.50 9.48 4.43 Abu Dhabi 4,235.38-3.46-1.67 11.29 5.76 Saudi Tadawul 6,695.26 0.01-3.13 13.83 3.69 Qatar Index 9,813.96-1.28-5.90 11.73 4.18 Kuwait Index 5,324.05-1.32-5.18 4.84 Oman MSM 30 5,931.00-0.64 9.71 10.65 4.32 Bahrain All Share 1,102.56-0.80-9.32 4.94 Egypt EGX 30 7,499.49-0.28 7.04 9.33 1.97 Istanbul 100 Index 76,357.74-1.86 6.46 8.68 3.91 ; *Current DFMGI 1 year performance Saudi Tadawul 1 year performance Page I 4
CURRENCIES US dollar gained 1.4% against Japanese yen over the past five trading days as minutes from the US Federal Reserve s Apr meeting released on May 18 indicated rate hike in Jun was firmly on the table British pound appreciated 0.95% against US dollar in the week, led by release of robust retail sales data for Apr and growing expectations that Britons will vote to stay in the European Union in a referendum on June 23 Canadian dollar weakened 1.34% against its US counterpart from May 13 as data showed retail sales fell 1.0% in Mar, exceeding economists forecasts and as expectations grew that the US could raise interest rates this summer Russian ruble depreciated 2.12% against US dollar, recording the second-biggest weekly retreat in emerging markets due to pressure on emerging markets from the prospect of a Federal Reserve interest-rate increase Indian rupee slid 1.01% against US dollar this week on persistent demand for the greenback from banks and importers amid higher crude oil prices, fall in domestic equities and prospects of the US rates increase next month South Korean won declined 1.6% against US dollar, posting its biggest weekly loss since mid-feb 2016 due to the concerns about an imminent interest rate hike in the US Last Close 5 Day % 1 Mth. % YTD % 1 Year % USD Index 95.3340 0.77 0.89-3.34-0.71 EUR/USD 1.1224-0.75-0.65 3.33 1.92 GBP/USD 1.4502 0.95 1.19-1.59-6.38 USD/JPY 110.1500 1.40 0.28-8.38-9.37 USD/CHF 0.9903 1.52 1.86-1.18 4.96 USD/CAD 1.3113 1.34 3.62-5.25 6.79 USD/BRL 3.5212-0.35-0.24-11.10 13.80 USD/RUB 66.8371 2.12 2.56-7.84 33.67 USD/INR 67.4463 1.01 1.85 1.95 6.18 USD/CNY 6.5490 0.26 1.25 0.85 5.67 USD/AUD 1.3846 0.65 7.92 0.90 8.37 EUR/USD 1 year performance GBP/USD 1 year performance Page I 5
COMMODITIES US WTI & Brent crude futures gained 1.86% & 3.33%, respectively, this week as speculators raised their bets amid firming trend in Asia and as militants blew up another pipeline in African producer Nigeria Spot gold prices lost 1.64%, recording its third straight week of loss as well as the biggest weekly slide in nearly two months on growing expectations for an increase in the US interest rates as soon as next month Shanghai steel rebar futures plunged 11.67% over the past five trading days as rising output and seasonal weakness in demand in China, the world s top consumer of the metal kept pressuring prices The Intercontinental Exchange s (ICE) sugar futures edged up 1.97% from May 13 as supply woes pushed prices higher after this year s El Nino weather pattern parched fields from Thailand to India. Most of the analysts are forecasting global deficits even with a bumper crop expected from Brazil as demand is increasing in Asia Last Close 5 Day % 1 Mth. % YTD % 1 Year % Brent ICE 48.72 1.86 6.38 30.69-25.47 WTI Nymex 47.75 3.33 12.01 28.91-20.04 Gold Spot 1,252.15-1.64 0.63 17.97 3.81 Silver Spot 16.53-3.40-2.56 19.27-3.40 Copper - CMX 205.85-0.80-8.02-3.58-27.35 S&P GSCI Spot Index 367.30 1.54 4.21 17.86-16.89 Baltic Dry Index 625.00 4.17-6.58 30.75 6.66 The Chicago Board of Trade (CBoT) soybean futures rose 1.82%, recording a sixth consecutive weekly gain driven by fund buying and worries about crop damage in South America The Baltic Exchange s main sea freight index, tracking rates for ships carrying dry bulk commodities, advanced 4.17% in the week ended May 20 helped by an increase in demand for Capesize vessels WTI Crude 1 year performance GOLD 1 year performance Page I 6
INTEREST RATES The US government bonds fell sharply this week, sending 10-year yield 13.83 basis points (bps) higher to 1.84% after minutes from the Federal Reserve s Apr policy meeting suggested officials were giving serious consideration to a Jun interest-rate increase German bonds posted their first week of declines in May, leading to a 4.1 bps rise in 10-year yield to 0.165% as gains in stocks and commodities reduced demand for the safest government debt amid growing talk that another hike in the US interest rates will come sooner rather than later South Africa s Reserve Bank left its benchmark lending rate unchanged at 7% on May 19, leaving room for further tightening later in 2016 as it faced a policy dilemma of rising inflation and low growth Indonesia s central bank kept its benchmark interest rate unchanged at 6.75% for the second straight month on May 19, signaling it is not in a hurry to adjust policy until it adopts a new framework in Aug Bank Negara Malaysia kept the overnight policy rate at 3.25% for an 11 th meeting on May 19 at the Governor Muhammad Ibrahim s first policy meeting as chief, refraining from immediately adding stimulus to an economy that could need it in coming quarters Last Close 5 Day % 1 Mth. % YTD % 1 Year % USD-10yr 1.84 8.13 2.99-18.99-16.05 USD-2yr 0.88 17.48 15.70-16.36 52.93 Fed Funds Rate 0.37 0.00 0.00 85.00 208.33 USD-3m Libor 0.66 5.37 4.17 7.93 134.50 USD-6m Libor 0.96 5.35 5.73 12.91 128.48 German-10yr 0.17 33.06-2.37-73.77-74.22 UK-10yr 1.45 5.52-3.71-25.92-26.48 Japan-10yr -0.12 3.51-10.61-145.38-128.92 AED-3m EIBOR 1.09 1.64 5.73 3.78 48.22 AED-6m EIBOR 1.33 1.86 3.09 8.53 49.61 Chile s central bank left the key rate at 3.5% for the fifth consecutive month on May 17, matching forecasts as inflation slowed for a 3 rd consecutive month in Apr to 4.2%, nearing central bank s targeted inflation of 2-4% US 10 year Generic Yield 1 year performance UK 10 year Generic Yield 1 year performance Page I 7
EQUITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Country Weekly Change Weekly Change (USD Adj.) 1 Kazakhstan 3.92% 2.04% 2 Namibia 2.78% 0.79% 3 Greece 2.69% 1.96% 4 Nigeria 2.60% 2.60% 5 South Africa 2.01% 0.04% 6 Japan 1.97% 0.48% 7 Ireland 1.74% 1.01% 8 Pakistan 1.58% 1.50% 9 Finland 1.54% 0.81% 10 Sweden 1.47% 0.61% Ref Country YTD Change YTD Change (USD Adj.) 1 Peru 36.24% 39.46% 2 Russia 17.97% 17.97% 3 Kazakhstan 15.65% 17.47% 4 Brazil 14.70% 28.42% 5 Colombia 14.62% 19.39% 6 Pakistan 11.81% 11.95% 7 Morocco 11.37% 13.87% 8 Namibia 10.54% 9.44% 9 Hungary 10.51% 13.92% 10 Slovakia 10.33% 13.86% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Brazil -4.02% -4.76% 2 Argentina -3.55% -3.20% 3 Abu Dhabi UAE -3.46% -3.47% 4 Dubai UAE -3.43% -3.44% 5 Russia -3.12% -3.12% 6 Colombia -2.07% -3.90% 7 Turkey -1.86% -2.29% 8 Philippine -1.85% -1.86% 9 Mongolia -1.76% -1.19% 10 Peru -1.64% -1.52% Ref Country YTD Change YTD Change (USD Adj.) 1 China -20.17% -20.98% 2 Italy -16.84% -14.18% 3 Mongolia -14.82% -15.03% 4 Zambia -13.43% -6.64% 5 Japan -12.07% -4.34% 6 Ghana -10.92% -12.07% 7 Hong Kong -9.41% -9.62% 8 Bahrain -9.32% -9.29% 9 Switzerland -9.31% -8.54% 10 Romania -9.10% -6.08% Page I 8
COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Bean Meal 8.78% 2 Gasoil 5.25% 3 Ethanol 4.02% 4 Lean Hogs 3.90% 5 Heat Oil 3.56% 6 WTI Crude 3.33% 7 Corn 3.27% 8 Orange Juice 3.27% 9 Gasoline 2.98% 10 Rough Rice 2.48% Ref Commodity YTD Pct Change 1 Bean Meal 48.58% 2 Heat Oil 35.50% 3 Gasoil 35.10% 4 Lean Hogs 33.53% 5 Brent Crude 30.69% 6 Gasoline 29.08% 7 WTI Crude 28.91% 8 Soybeans 23.30% 9 Lumber 19.29% 10 Silver 19.27% Ref Commodity Weekly Change 1 Steel Rebar -11.67% 2 Palladium -5.41% 3 Rubber -4.68% 4 Silver -3.40% 5 Coffee -3.18% 6 Palm Oil -2.96% 7 Soybean Oil -2.80% 8 Platinum -2.75% 9 Lead -2.08% 10 Live Cattle -1.92% Ref Commodity YTD Pct Change 1 Natural Gas -11.77% 2 Feeder Cattle -10.95% 3 Live Cattle -10.86% 4 Cocoa -9.31% 5 Lead -6.58% 6 Nickel -3.63% 7 Copper -3.58% 8 Cotton -2.54% 9 Coffee -1.58% 10 Wheat -0.48% Page I 9
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