Weekly Market Review 27th January to 1st February 2013
Contents International Equity Markets GCC Equity Markets Currencies Commodities Interest Rates
International Equity Markets S&P rose 0.68% and DJI Passed14000 by gaining 0.82% for the week. Stocks rallied for a fifth week due to better than expected earnings and on reports showing US payrolls rose 157000 last month. Among other economic reports, manufacturing in the US expanded more than forecasted in January. FTSE gained 1% last week on strong data from the US. BT group stocks rallied after the company posted higher than estimated earnings. Diageo Plc. advanced after analysts raised their share price forecast. Dax advanced on the last day of the week on US economic data, parings its weekly loss to 0.3%. Porsche stocks rallied as a hedge fund agreed not to appeal a court ruling dismissing a case against the company. Shanghai composite gained 5.57% last week, the biggest weekly advance since October 2011. The index fell after the release of a report showing that the nations manufacturing grew slower than expected. However the index rebounded after the purchasing managers index showed a rise to a two year high. Nikkei capped a 12 week winning streak as positive reports on earnings boosted the market and weaker yen added to the gain of exporter companies. S&P and DJI 6 month chart S&P 500 1513.17 10.21 0.68 6.10 DJI 14009.79 113.81 0.82 6.91 Nasdaq Comp 3179.10 29.39 0.93 5.29 Euro Stoxx 2710.08-34.10-1.24 2.81 FTSE 100 6347.24 62.79 1.00 7.62 Dax 7833.39-24.58-0.31 2.90 CAC 40 3773.53-4.63-0.12 3.64 Nikkei 225 11191.34 264.69 2.42 7.66 Hang Seng 23721.84 141.41 0.60 4.70 Brazil - Bovespa 60351.16-818.67-1.34-0.99 Russia - Micex 1549.28-13.65-0.87 5.06 BSE Sensex 19781.19-322.34-1.60 1.82 Shanghai Comp 2419.02 127.72 5.57 6.61 Shanghai Comp- 6 month chart
GCC Equity Markets Dubai and Abu Dhabi markets were the largest gainers last week with gains of 5.32% and 3.55% respectively. The bullish undertone was reflective of the positive fourth quarter earnings expectations. Emaar Properties dropped 3.1 percent on news that quarterly income dropped 28 percent to 512 million dirhams which was 5% below analyst estimates. Revenue climbed 20 percent to 2.68 billion dirhams, while its cost of sales jumped 50 percent. The drop follows a 30% rally last month. Nakheel PJSC needs to raise $898 million to build a mall on Palm Jumeirah alongside another shopping project called the Point and is evaluating finance options. Emirates Airlines sold $750 million of 12 year bonds priced to yield 4.51 percent. The amortizing bonds, maturing in February 2025, have a weighted average life of seven years. Dana Gas full year net profits rose 19.56% to $165 million as the company benefited from higher crude prices and also received payments for output in Egypt and Iraq. DEWA is said to have hired six banks to raise as much as $ 1billion from the sale of Islamic bonds. The proceeds will be used to repay loans and fund investment. The current yield to maturity on the 2016 and 2020 maturity bonds are at 2.66 and 3.825 respectively. EmiratesNBD 4 th quarter net profit rose to 625 million dirhams, beating analyst estimates by 20%. Dubai 1887.59 95.29 5.32 16.34 Abu Dhabi 2881.78 98.78 3.55 9.54 Saudi Tadawul* 7057.59 32.29 0.46 3.77 Qatar Index 8724.77 35.01 0.40 4.38 Kuwait Price Index 6245.11 42.46 0.68 5.24 Oman MAM 30 5799.79-19.84-0.34 0.68 Bahrain All Share 1085.14 14.70 1.37 1.83 Egypt EGX 30 5606.49-82.74-1.45 2.64 Istanbul 100 Index 80221.68-4533.42-5.35 2.57 RBS Mena TR 135.76-2.46-1.78 4.48 * Saturday to Wednesday. All others Sunday to Thursday DFM Index - 6 Month Chart ADSM Index 1 Year Chart
Currencies USD weakened versus euro for the second week, bringing the currency down to the lowest since November 2011 as jobless rate unexpectedly rose to 7.9% from 7.8% adding to the expectation that FED will sustain its stimulus policy inline with its decision last year to hold the benchmark interest rate near zero as long as unemployment remains above 6.5% and inflation stays below 2.5%. EUR strengthened against most of its counter parts after a gauge of manufacturing rose more than expected to 47.9% in January. GBP declined for a fourth week against euro, the longest streak of declines since September as economic reports on consumer confidence and manufacturing suggested the UK economic recovery is petering out. South Korean won had its biggest weekly loss versus USD since May on concern a weaker yen will hurt the nation s export and after the government proposed a tax on securities trading to curb speculative flows. Asia dollar index fell for a second week and touched a two month low as Bank of Korea board member warned of a global currency war. China s Yuan dropped for the week versus the dollar as Bank of China cuts the PBOC Yuan s reference rate. EUR/USD 6 month Chart EUR / USD 1.3640 0.0176 1.31 3.36 GBP / USD 1.5693-0.0106-0.67-3.38 AUD / USD 1.0407-0.0017-0.16 0.23 USD / JPY 92.7700 1.8600-2.01-6.63 USD/ CHF 0.9080-0.0185 2.04 0.74 USD/ CAD 0.9965-0.0093 0.93-0.16 USD/ BRl 1.9880-0.0420 2.11 3.20 USD/ RUB 29.8546-0.1818 0.61 2.25 USD/ INR 53.1975-0.4875 0.92 3.38 USD/ CNY 6.2273 0.0049-0.08 0.05 DXY Index 79.13-0.62-0.78-0.81 Dollar index 6 Month Chart
Commodities WTI gained 1.97% continuing to gain for the eighth week capping the longest weekly advances streak since August 2004. Brent advanced 3.07% last week due to limits on a pipeline linking the Midwest to the gulf coast. S&P s GSCI spot index climbed for the eight week, the longest rally since January 1996 on mounting speculation that the US and China s economy will rebound bolstering the demand for metals, energy and crops. Gold and silver gained last week as US hiring picked up in the past three months adding to the signs of an improvements in the US economy that may fuel inflation as the FED decides to continue stimulus. Copper, Nickel and aluminium advanced last week amid indications that economies are reviving in the US and china. Soybean futures advanced by 2.3% last week to a six week high on speculation that warm, dry weather will erode yields in Argentina, increasing demand for tightening US supplies. Gold spot 1667.45 8.75 0.53-0.47 Silver spot 31.83 0.63 2.02 4.88 Copper-CMX 378.45 13.25 3.63 3.61 Brent - ICE 116.76 3.48 3.07 5.09 WTI - Nymex 97.77 1.89 1.97 6.48 Wheat- CBOT 765.00-11.50-1.48-1.67 Corn- CBOT 736.00 15.25 2.12 5.41 Soybean- CBOT 1474.25 33.25 2.31 4.59 S&P GSCI Spot Index 679.05 16.30 2.46 5.02 Baltic Dry Index 750.00-48.00-6.02 7.30 Corn prices rose last week on speculation that china will increase imports to control the rising domestic prices. WTI - 6 Month Chart S&P GSCI Spot Index 6 Month Chart
Interest Rates US 10 year treasury yields advanced 7 basis points last week to the highest level since April after data on payrolls, consumer prices and manufacturing. The 30 year treasury yield reached 3.24% the highest since 5 th April. A gauge of dollar denominated emerging market bonds posted its biggest weekly retreat in eight months as investors shift assets into equities on prospects that higher corporate earnings will bolster stocks. UK 10 year Gilts decline with the yields rising 4 basis points on speculation that they will hold their bond buying program at 375 billion pounds. Italy s 10 year yields climbed to a four week high after a report showed that the consumer confidence declined more than expected to the lowest level in about 17 years. German 10 year bund yields reached the most since September after unemployment declined more than analysts forecast in January. USD- 1w Libor 0.17-0.0040-2.26-10.38 USD - 3m Libor 0.30-0.0050-1.66-3.43 USD - 6m Libor 0.47-0.0086-1.80-7.94 USD - 10yr 2.01 0.0662 3.40 14.65 AED-1m EIBOR 0.79-0.01-0.79-0.79 AED-3m EIBOR 1.30 0.00 0.00 0.00 AED-12m EIBOR 1.62 0.00 0.00-0.38 UK - 10yr 2.10 0.0410 1.99 14.72 Japan - 10yr 0.77 0.0510 7.08-2.53 About 20 lenders to Dubai Group, controlled by Dubai Holding declined a debt restructure offer to receive 18.5 cents on the dollar in favour of full repayment over 12 years. U.S. 10 year bond yields 5 Year Chart UK 10 Year bond Yields 6 month Chart
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