Weekly Market Review June 12 th, 2016 June 18 th, 2016 1
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 retail sales rose 0.5% in May (vs. +1.3% in Apr), partly led by continued growth in auto sales; beats forecasts Consumer prices edged up 0.2% in May (vs. +0.4% in Apr) partly due to continued rise in energy prices University of Michigan s Jun consumer sentiment index slipped to 94.3 (vs. 94.7 in May); beats estimates Europe Eurozone s employment grew 1.4% YoY in 1Q16 (vs. +1.2% in 4Q15). However, QoQ growth held steady at 0.3% Eurozone s consumer prices inched down 0.1% YoY in May (vs. -0.2% in Apr) Ifo Institute raised 2016 & 2017 Germany s growth forecast to 1.8% & 1.6%, respectively (vs. 1.6% & 1.5%, earlier) UK s consumer prices edged up 0.3% YoY in May (same as in Apr). Inflation stood at 0.2% MoM (vs. 0.1% in Apr) Rest of the World China s industrial output climbed in-line with estimates by 6.0% YoY in May (same as in Apr) New bank lending jumped to CNY985.5bn in May (vs. the expected level of CNY750bn) Japan s industrial production advanced 0.5% MoM in Apr (vs. +3.8% in Mar), more-than initial estimates of +0.3% Fitch affirmed Japan s long-term Foreign and Local-Currency Issuer Default Ratings at A ; outlook cut to negative Last Close 5 Day % YTD % P/E (2015) *Div. Yield S&P 500 2,071.22-1.19 1.33 17.60 2.20 DJI 17,675.16-1.06 1.44 16.44 2.61 Nasdaq Comp 4,800.34-1.92-4.14 20.78 1.34 Euro Stoxx 600 325.78-2.14-10.94 15.15 3.95 FTSE 100 6,021.09-1.55-3.54 16.12 4.64 Dax 9,631.36-2.07-10.35 12.10 3.35 CAC 40 4,193.83-2.62-9.56 14.12 4.15 Nikkei 225 15,599.66-6.03-18.04 15.55 2.07 Hang Seng 20,169.98-4.15-7.96 11.01 4.20 Brazil - Bovespa 49,533.84 0.23 14.27 12.94 3.42 Russia - Micex 1,877.07-1.39 6.57 7.08 4.33 BSE Sensex 26,625.91-0.04 1.95 17.07 1.49 Shanghai Comp 2,885.11-1.44-18.48 13.24 2.13 ; *Current S&P 500 1 year performance Euro Stoxx 600 1 year performance Page I 3
GCC EQUITIES UAE Mohamed Alabbar led Adeptio agreed to buy majority stake in Kuwait Food Co. for around $2.4bn Meydan Group raised AED1bn to strengthen its capital structure, diversify investor base and support new projects Abu Dhabi National Energy Co. reportedly offers 5- & 10-year bonds worth $1bn to help refinance debt due in Oct Ajman Bank raised AED675mn through rights issue to strengthen capital base & comply with capital adequacy Aldar Properties generated AED1bn revenue from sales of 267 units of Yas Acres in phase I Abraaj Group intends to double its assets under management in Latin America to around $1.5bn over next 5 years Saudi Arabia KSA s cabinet approved regulations for 100% foreign ownership in retail, wholesale companies; approved implementation of white land tax on urban undeveloped land plots of 10,000 square meters or more Sipchem completed redemption of its SAR1.8bn Sukuk before due date on Jul 6, 2016; completed issuance of SAR1bn Sukuk for general purposes and repayment of financial obligations Rest of GCC Qatar National Bank raised Tier I capital worth QAR10bn to strengthen capital base and support future growth; completed acquisition of Turkey-based Finansbank Fitch lowered ratings of Bank Sohar and HSBC Bank Oman; also downgraded Bank Sohar s outlook to negative Last Close 5 Day % YTD % P/E (2015) *Div. Yield Dubai 3,307.72-1.88 4.97 9.83 4.23 Abu Dhabi 4,322.18-1.35 0.35 11.73 5.62 Saudi Tadawul 6,542.64-0.97-5.34 13.62 3.78 Qatar Index 9,791.65-0.46-6.11 11.81 4.18 Kuwait Index 5,394.84-0.29-3.92 4.51 Oman MSM 30 5,808.07-1.32 7.43 11.63 4.44 Bahrain All Share 1,116.93-0.24-8.14 4.88 Egypt EGX 30 7,420.39-4.33 5.91 9.39 2.01 Istanbul 100 Index 75,430.53-1.89 5.16 8.61 2.94 ; *Current DFMGI 1 year performance Saudi Tadawul 1 year performance Page I 4
CURRENCIES US dollar weakened this week as the Fed meeting showed fewer officials expect the central bank to increase rates more than once in 2016 and as pending vote on Britain s membership in the EU continued to whipsaw market British pound appreciated 0.71% against US dollar during the week ended Jun 17 after the killing of British MP Jo Cox fuelled speculation that voters will be more likely to vote in favor of remaining in the European Union Japanese yen strengthened 2.63% against US dollar over the last five trading days as investors sought refuge of safe haven assets before the June 23 British referendum Brazilian real edged higher against the greenback by 0.11% from Jun 10 along with global markets, offsetting domestic turmoil after a third minister resigned from the government of Acting President Michel Temer Canadian dollar depreciated 0.87% against its US counterpart in the week as crude oil slipped and after the market s anxiety with the upcoming Brexit vote increased, following a deadly shooting of a UK member of parliament which shut down the campaign on both sides of the referendum Indian rupee weakened 0.49% against US dollar this week on persistent demand for the American currency from banks and importers and on the back of higher greenback in the overseas market Last Close 5 Day % 1 Mth. % YTD % 1 Year % USD Index 94.2060-0.39-0.92-4.49 0.13 EUR/USD 1.1277 0.23 0.54 3.82-0.66 GBP/USD 1.4358 0.71-1.65-2.57-9.60 USD/JPY 104.1600-2.63-5.47-13.36-15.12 USD/CHF 0.9600-0.51-2.80-4.20 4.63 USD/CAD 1.2894 0.87-1.07-6.83 5.11 USD/BRL 3.4160-0.11-4.19-13.75 10.27 USD/RUB 64.7542-1.12-2.17-10.71 19.84 USD/INR 67.0850 0.49 0.15 1.41 5.54 USD/CNY 6.5870 0.37 0.74 1.44 6.08 USD/AUD 1.3524-0.28-2.23-1.45 5.10 EUR/USD 1 year performance GBP/USD 1 year performance Page I 5
COMMODITIES Brent & West Texas Intermediate (WTI) crude futures fell 2.71% & 2.22%, respectively, during the week ended Jun 17 on speculation higher prices will encourage more US output just as global disruptions ease Spot gold price gained 1.97% over the last five trading days as investors sought the haven commodity on fresh fears Britain would vote to leave the European Union in a looming referendum The London Metals Exchange (LME) copper futures edged up 0.93% in the week as market worries over a potential British exit from the European Union receded and as the US dollar eased The Chicago Board of Trade (CBoT) corn futures ended the week 3.49% higher as traders covered short positions ahead of the weekend, with the crop approaching its crucial pollination stage in July, and as uncertainty about Midwest crop weather raised concern about crop stress Last Close 5 Day % 1 Mth. % YTD % 1 Year % Brent ICE 49.17-2.71 0.49 31.89-21.98 WTI Nymex 47.98-2.22-0.44 29.54-19.51 Gold Spot 1,299.00 1.97 3.21 22.38 8.23 Silver Spot 17.50 0.98 3.52 26.28 8.66 Copper - CMX 205.10 1.01-1.47-3.93-20.16 S&P GSCI Spot Index 376.85-1.16 1.86 20.92-12.68 Baltic Dry Index 587.00-3.77-8.57 22.80-24.65 The CBoT wheat futures fell 2.78% this week pressured by the expanding US winter wheat harvest and broad declines in the commodities sector Malaysian Derivatives Exchange (MDE) palm oil futures declined 5.37% from Jun 10, pressured by declining rival oils and the announcement of an increase in crude palm oil export tax by the country WTI Crude 1 year performance GOLD 1 year performance Page I 6
INTEREST RATES US 10-year bond yield slipped 3.26 basis points (bps) this week to 1.61% as the Federal Reserve kept interest rates unchanged in the range of 0.25-0.50% on June 15, signaling a cautious stance on raising interest rates and factoring Britain s upcoming vote to stay in the European Union The Bank of England held its key rate unchanged at a record low of 0.5% and annual asset purchase at GBP375bn on June 16, before the June 23 referendum about whether the UK should stay or exit the European Union Bank of Japan left unchanged its negative 0.1% interest rate on Jun 16 and maintained annual asset buying program at JPY80tn as it maintained optimistic view on the economy Chile s central bank left its benchmark rate unchanged at 3.5% for a 6 th time on Jun 17, reiterating that rates may need to rise to ensure inflation slows in line with its target range of 2-4% Central Bank of Egypt raised its overnight lending rate by 100 bps to 12.75% on June 16, marking the 2 nd increase this year as Egypt s core inflation rate soared to 12.23% in May, up from 9.51% in Apr Indonesia s central bank cut its benchmark BI rate by 0.25% to 6.50% on June 16 to help spur economic growth, taking advantage of a stable rupiah, benign inflation and the US Federal Reserve s latest decision to keep policy unchanged Last Close 5 Day % 1 Mth. % YTD % 1 Year % USD-10yr 1.61-1.99-9.28-29.15-31.13 USD-2yr 0.69-4.65-16.63-33.88 9.41 Fed Funds Rate 0.38 2.70 2.70 90.00 171.43 USD-3m Libor 0.64-1.71 3.09 5.17 129.49 USD-6m Libor 0.92-2.07 1.43 9.28 108.54 German-10yr 0.02-5.00-85.61-96.98-97.65 UK-10yr 1.14-7.14-16.50-41.63-43.95 Japan-10yr -0.16 0.00 40.91-159.62-134.99 AED-3m EIBOR 1.15 2.36 5.37 9.15 54.41 AED-6m EIBOR 1.35 0.64 3.80 10.82 50.35 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 Nigeria 7.40% 7.40% 2 Pakistan 4.97% 4.35% 3 Bulgaria 2.57% 2.46% 4 Philippine 1.49% 0.82% 5 Romania 1.21% 0.58% 6 Luxembourg 1.19% 1.09% 7 Ukraine 1.12% 1.53% 8 Ghana 1.07% -0.85% 9 Chile 0.57% 0.38% 10 Malta 0.39% 0.29% Ref Country YTD Change YTD Change (USD Adj.) 1 Peru 38.55% 42.55% 2 Russia 20.24% 20.24% 3 Pakistan 18.16% 18.33% 4 Kazakhstan 16.07% 16.67% 5 Brazil 14.27% 32.04% 6 Colombia 13.41% 19.64% 7 Argentina 11.98% 4.12% 8 Namibia 10.36% 12.74% 9 Thailand 10.35% 12.79% 10 Hungary 9.71% 14.51% Ref Country Weekly Change Weekly Change (USD Adj.) 1 Venezuela -6.68% -6.68% 2 Japan -6.03% -3.43% 3 Greece -5.19% -5.28% 4 Denmark -5.09% -5.20% 5 Kazakhstan -4.55% -5.84% 6 Egypt -4.33% -4.35% 7 Hong Kong -4.15% -4.13% 8 Portugal -3.91% -4.01% 9 Ireland -3.80% -3.89% 10 Slovakia -3.52% -3.61% Ref Country YTD Change YTD Change (USD Adj.) 1 Italy -20.99% -18.07% 2 China -18.48% -19.69% 3 Japan -18.04% -5.48% 4 Zambia -16.64% -15.88% 5 Portugal -14.94% -11.80% 6 Mongolia -14.33% -12.77% 7 Czech Republic -13.08% -10.04% 8 Switzerland -12.53% -8.90% 9 Spain -12.39% -9.15% 10 Ireland -11.78% -8.53% Page I 8
COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY YTD Ref Commodity Weekly Change 1 Lean Hogs 4.74% 2 Steel Rebar 3.75% 3 Corn 3.49% 4 Coffee 2.77% 5 Aluminium 2.67% 6 Natural Gas 2.62% 7 Rubber 2.02% 8 Gold 1.97% 9 Nickel 1.57% 10 Ethanol 1.15% Ref Commodity YTD Pct Change 1 Bean Meal 54.14% 2 Lean Hogs 44.11% 3 Heat Oil 34.61% 4 Soybeans 33.08% 5 Gasoil 32.72% 6 Brent Crude 31.89% 7 Sugar 29.66% 8 WTI Crude 29.54% 9 Silver 26.28% 10 Zinc 23.12% Ref Commodity Weekly Change 1 Gasoil -5.77% 2 Feeder Cattle -5.58% 3 Palm Oil -5.37% 4 Zinc -5.03% 5 Live Cattle -4.68% 6 Gasoline -3.48% 7 Wheat -2.78% 8 Brent Crude -2.71% 9 Lumber -2.65% 10 Soybean Oil -2.53% Ref Commodity YTD Pct Change 1 Feeder Cattle -17.66% 2 Live Cattle -14.05% 3 Lead -5.58% 4 Palladium -5.04% 5 Copper -3.93% 6 Cocoa -3.27% 7 Rough Rice -2.33% 8 9 10 Page I 9
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