Weekly Market Review 1 st March 2015 7 th March 2015
CONTENTS International Equity Markets GCC Equity Currencies Commodities Interest Rates Equity Markets - Top Most & Bottom Most Commodity Markets - Top Most & Bottom Most
INTERNATIONAL EQUITY MARKETS US nonfarm payrolls gained 295,000 in Feb after rising 239,000 in Jan. Jobless rate fell to 5.5%, lowest since May 08 All 31 US banks passed a min. 5% hurdle for top-tier capital in Federal Reserve s annual health check New orders for factory goods unexpectedly declined 0.2% in Jan, posting their 6 th straight monthly fall Institute for Supply Management s services sector index stood at 56.9 in Feb, up slightly from 56.7 in Jan Consumer spending slipped 0.2% MoM in Jan after falling 0.3% in Dec JPMorgan's Global All-Industry Output index jumped to 53.9 in Feb from 53.0 in Jan as new orders flooded in ECB raised Euro zone growth forecast to 1.5% in 2015 from earlier forecast of 1% growth & last year s 0.9% increase 2015 inflation forecast cut to zero from earlier prediction of 0.7%. 2016 inflation seen at 1.5% Markit s final Feb composite PMI rose to a seven month high of 53.3 helped by price cutting & weak euro Consumer prices fell 0.3% YoY in Feb after recording 0.6% YoY drop in Jan Unemployment fell for the third month in a row to 11.2% in Jan as compared to 11.3% in Dec German industrial output rose 0.6% MoM in Jan. Dec data revised up to show rise of 1% from earlier figure of 0.1% Industrial orders declined 3.9% MoM in Jan, posting their largest drop since Aug 2014 Retail sales climbed 2.9% MoM in Jan, recording sharpest increase since Jan 08. YoY, sales were up 5.3% Markit/CIPS UK construction PMI rose to 60.1in Feb, above expectations and reaching its highest level since Oct 14 Switzerland's economy expanded by a stronger-than-expected 0.6% in 4Q2014. Economy grew by 2% in 2014 Greece's jobless rate rose to 26% in Dec from an upwardly revised 25.9% rate in Nov 2014 HSBC/Markit s China services PMI rose to 52.0 in Feb vs. 51.8 in Jan as new orders rose at quickest pace in 3 months China announced $260bn worth of infrastructure projects including railway construction, to spur growth Australia s GDP expanded by 0.5% in 4Q2014 vs. 0.4% rise recorded in 3Q2014. Economy grew by 2.5% in 2014 SABB HSBC Saudi Arabia PMI rose to 58.5 in Feb from 57.8 in Jan, buoyed by new King s spending Last Close Change 5 Day % YTD % S&P 500 2,071.26-33.24-1.58 0.60 DJI 17,856.78-275.92-1.52 0.19 Nasdaq Comp 4,927.37-36.16-0.73 4.04 Euro Stoxx 600 394.18 1.97 0.50 15.08 FTSE 100 6,911.80-34.86-0.50 5.27 Dax 11,550.97 149.31 1.31 17.80 CAC 40 4,964.35 12.87 0.26 16.19 Nikkei 225 18,971.00 173.06 0.92 8.71 Hang Seng 24,164.00-659.29-2.66 2.37 Brazil - Bovespa 49,981.19-1,601.90-3.11-0.05 Russia - Micex 1,728.55-30.42-1.73 23.77 BSE Sensex 29,448.95 228.83 0.78 7.09 Shanghai Comp 3,241.19-69.11-2.09 0.20 S&P 500 1 year performance Euro Stoxx 600 1 year performance
GCC EQUITIES Dubai Parks & Resorts will be signing-off project contracts totaling AED7.5bn in 2015, above AED5bn it did in 2014 Private equity house Abraaj-led consortium will set-up a $200mn healthcare group focused on Egypt and Tunisia Moody s upgraded Emaar Properties outlook to positive from stable on strong financial & business profile Sharjah Islamic Bank plans a US dollar benchmark Sukuk issue. The benchmark size is generally upwards of $500mn Egypt s Housing Minister hopes to reach a deal with Arabtec by mid-mar 2015 to build 1mn homes worth $40bn Investment Corp. of Dubai partnered with Canada-based Brookfield to develop $1bn office project in Dubai Nakheel delivered 90 new villas at Jumeirah Village Circle in Dubai, launched in Dec 2013 and sold for AED275mn General Holding Corp. (Senaat) plans IPO of a subsidiary in 2015; to invest AED5bn in the industry over next 2 years Commercial Bank of Dubai s shareholders approved 25% cash & bonus dividend worth AED561mn each United Arab Bank s shareholders approved 10% cash dividend totaling AED114.6mn as well as 20% stock dividend National Shipping Company of Saudi Arabia plans 10-year Sukuk sale worth SAR3.9bn by the end of March 2015 Saudi s Al-Tayyar Travel Group purchased a five-star hotel in Mecca at a cost of SAR1.5bn; shareholders agreed to raise company s capital by 33.3% via bonus shares to SAR2bn, aimed to help fund expansion Saudi-based ACWA Power secured $344mn 27-year amortizing loan for Dubai s 200MW solar power project Sadara Chemical signed a guarantee covering 33.3% payment obligation related to Saudi Butanol s SAR865mn loan Bank Dhofar s EGM approved additional Tier I securities issue up to $300mn or equiv. in Omani Rial outside Oman Qatar s Ooredoo Group said the company generated more than $1bn revenue from B2B services in 2014 Qatar Electricity & Water awarded QAR4bn contract to Mitsubishi for building Qatar s largest power & water plant Doha Bank s EGM approved issuance of QAR2bn capital instruments to enhance bank s Tier 1 capital base National Bank of Kuwait-Bahrain s FY2014 net profit surged 27% YoY to $145mn Aluminium Bahrain puts Saudi listing plan on hold, to begin construction of 0.4mn ton per year aluminum plant Last Close Change 5 Day % YTD % Dubai 3,747.54-117.13-3.03-0.70 Abu Dhabi 4,587.18-99.01-2.11 1.29 Saudi Tadawul 9,516.98 203.46 2.18 14.20 Qatar Index 12,139.42-305.92-2.46-1.19 Kuwait Index 6,539.29-62.14-0.94 0.05 Oman MSM 30 6,526.45-32.87-0.50 2.89 Bahrain All Share 1,467.01-7.80-0.53 2.83 Egypt EGX 30 9,575.98 241.97 2.59 7.27 Istanbul 100 Index 80,310.16-3,837.35-4.56-6.31 DFMGI 1 year performance Saudi Tadawul 1 year performance
CURRENCIES US dollar jumped to a two-month high, appreciating 1% in the week to 120.83 yen per dollar after robust jobs data solidified expectations for a Federal Reserve rate increase as soon as June 2015 The euro sank 3.1% to 1.0844 US dollars per euro, registering a third straight weekly loss after the European Central Bank said the 1.1tn quantitative-easing plan will begin from March 9, 2015 Brazil s real depreciated 7.8% in the week to 3.064 per dollar, recording its worst week in six years as prospects for higher US interest rates added to concern over Brazil s ability to shore up its fiscal accounts Russian ruble strengthened 2.1% in the week to 60.43 per dollar as stabilizing oil prices and a cease-fire in Ukraine propelled the currency of the world s biggest energy exporter Chinese Yuan gained 0.1% in the week to 6.2631 per dollar after the nation s leaders pledged stability for the currency and said they would encourage its global use Turkish lira shed 4.55% in the week to close at 2.6257 per dollar amid concerns that the government will encroach on the central bank s monetary-policy autonomy to force interest-rate cuts Last Close Change 5 Day % YTD % EUR/USD 1.0844-0.0352-3.14-10.37 GBP/USD 1.5037-0.0401-2.60-3.47 AUD/USD 0.7716-0.0092-1.18-5.61 USD/JPY 120.8300 1.2000 1.00 0.88 USD/CHF 0.9860 0.0317 3.32-0.83 USD/CAD 1.2624 0.0109 0.87 8.63 USD/BRl 3.0640 0.2228 7.84 15.29 USD/RUB 60.4300-1.3235-2.14-0.50 USD/INR 62.1712 0.3324 0.54-1.38 USD/CNY 6.2631-0.0063-0.10 0.93 DXY Index 97.6150 2.3220 2.44 8.14 EUR/USD 1 year performance GBP/USD 1 year performance
COMMODITIES Brent Crude futures lost 4.55%, losing its most in a week since Jan 2015 as a resurgent dollar and fear of a US rate hike diverted attention from the shrinking number of rigs drilling for oil in the United States Gold lost 3.79% in the week on concerns of a rate increase by US Fed as soon as mid-2015. An increase in US interest rates would further boost the value of the dollar, in turn hurting demand for non-interest-bearing assets such as gold Copper futures lost 3.07% in the week, as the dollar rallied after a strong US monthly employment report, while investors were also worried about lackluster demand in China Wheat futures declined 6.1% in the week, witnessing its biggest weekly decline since Sep 2014 as ample global supplies and a stronger dollar put pressure on prices Last Close Change 5 Day % YTD % Gold spot 1,167.19-46.03-3.79-1.49 Silver spot 15.90-0.70-4.20 1.27 Copper-CMX 260.90-8.25-3.07-7.60 Brent - ICE 59.73-2.85-4.55 0.91 WTI - Nymex 49.61-0.15-0.30-8.57 S&P GSCI Spot Index 411.78-9.46-2.25-1.52 Baltic Dry Index 565.00 25.00 4.63-27.75 Soybeans futures were down 5.0% in the week as record South American supplies posed stiff competition to the United States Coffee futures slid 0.18% in the week as a stronger dollar weighed on soft commodity markets while recent rainfall in Brazil relieved pressure on stressed coffee trees after a drought and added to the downward pressure on prices WTI Crude 1 year performance GOLD 1 year performance
INTEREST RATES US government bonds fell as 10-year yields soared 24.8bps to 2.24% after solid US employment report stoked fears that the Federal Reserve may raise interest rates in June 2015. This prompted investors to shed holdings on worries that higher official interest rates from the central bank would undermine the value of outstanding bonds The Bank of England kept the benchmark interest rate unchanged at 0.5%, marking the sixth anniversary of ultraloose monetary policy. It also left the size of the BOE s bond portfolio unchanged at 375bn India's central bank unexpectedly lowered its policy rate for the second time this year on Mar 04, 2015 by 25 bps to 7.5%, backing a government that is pushing to revive economic growth as inflation cools The Reserve Bank of Australia kept its official interest rate on hold at the historic low level of 2.25% amid concern that a further cut to stimulate a weak economy might stoke unsustainable growth in house prices The Greek debt management agency reported that Greece raised 1.138bn on Mar 04, 2015 in six-month treasury bills at an average yield of 2.97% versus a 2.75% yield of an equivalent sale last month, as it raced to gather funds for debt repayments due Mar 2015 Last Close Change 5 Day % YTD % USD-1w Libor 0.14 0.0040 2.96 2.96 USD-3m Libor 0.26 0.0017 0.67 3.13 USD-6m Libor 0.40 0.0164 4.31 9.45 USD-10yr 2.24 0.2484 12.46 3.23 AED-1m EIBOR 0.38 0.0000 0.00-3.26 AED-3m EIBOR 0.69 0.0000 0.00 1.90 AED-12m EIBOR 1.01-0.0043-0.42-0.98 UK-10yr 1.95 0.1520 8.46 10.93 Japan-10yr 0.39 0.0620 18.84 21.43 The People s Bank of China lowered the overnight interest rate, that it charges commercial lenders on a special short-term lending tool known as the standing lending facility, to 4.5% from 5% and the seven-day rate to 5.5% from 7% in a move to lower borrowing costs for businesses in a weakening economy US 10 year Generic Yield 1 year performance UK 10 year Generic Yield 1 year performance
EQUITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY Ref Country Weekly Change Weekly Change (USD Adj.) 1 Venezuela 16.61% 16.61% 2 Laos 5.83% 5.76% 3 Argentina 3.41% 3.01% 4 Nigeria 3.14% 4.62% 5 Egypt 2.59% 3.27% 6 Luxembourg 2.47% -0.75% 7 Malta 2.47% -0.75% 8 Cyprus 2.36% -0.86% 9 Saudi Arabia 2.18% 2.18% 10 Austria 2.13% -1.08% YTD Ref Country YTD Change YTD Change (USD Adj.) 1 Sweden 19.05% 6.69% 2 Portugal 18.49% 6.21% 3 Slovakia 18.37% 6.10% 4 Italy 18.01% 5.78% 5 Austria 17.97% 5.74% 6 Germany 17.80% 5.59% 7 Finland 16.42% 4.35% 8 France 16.19% 4.14% 9 Argentina 15.73% 11.84% 10 Netherlands 15.40% 3.44% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Colombia -6.37% -9.46% 2 Turkey -4.56% -8.76% 3 Greece -3.43% -6.47% 4 Brazil -3.11% -10.15% 5 Dubai UAE -3.03% -3.03% 6 Peru -2.83% -2.89% 7 Hong Kong -2.66% -2.67% 8 Qatar -2.46% -2.47% 9 Bulgaria -2.34% -5.42% 10 Abu Dhabi UAE -2.11% -2.12% Ref Country YTD Change YTD Change (USD Adj.) 1 Colombia -15.37% -22.19% 2 Kazakhstan -14.01% -15.41% 3 Peru -12.00% -15.30% 4 Nigeria -10.41% -17.78% 5 Bulgaria -8.76% -18.23% 6 Mongolia -7.79% -12.14% 7 Turkey -6.31% -16.62% 8 Cyprus -6.25% -15.97% 9 Ghana -3.87% -12.63% 10 Mauritius -3.48% -11.30%
COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Gasoline 6.47% 2 Lead 5.27% 3 Feeder Cattle 3.88% 4 Nickel 1.95% 5 Ethanol 1.11% 6 Tin 0.84% 7 Palladium 0.12% 8 9 10 Ref Commodity YTD Pct Change 1 Gasoline 31.12% 2 Gasoil 13.67% 3 Rubber 8.59% 4 Cotton 4.45% 5 Cocoa 3.88% 6 Palladium 2.63% 7 Silver 1.27% 8 Heat Oil 1.21% 9 Palm Oil 0.92% 10 Brent Crude 0.91% Ref Commodity Weekly Change 1 Heat Oil -18.70% 2 Natural Gas -9.61% 3 Wheat -6.14% 4 Soybean Oil -5.06% 5 Soybeans -5.00% 6 Lumber -4.78% 7 Bean Meal -4.72% 8 Orange Juice -4.57% 9 Brent Crude -4.55% 10 Silver -4.20% Ref Commodity YTD Pct Change 1 Lean Hogs -18.57% 2 Steel Rebar -18.45% 3 Coffee -18.07% 4 Wheat -17.63% 5 Orange Juice -17.17% 6 Lumber -14.53% 7 Rough Rice -10.92% 8 Ethanol -10.26% 9 Natural Gas -9.22% 10 Bean Meal -7.57%
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.