weekly market revie...enoc’s retail unit plans to build 54 new service stations in dubai and 11...

Weekly Market Review February 21, 2016 – February 27, 2016

February 28, 2016

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CONTENTS

International Equity Markets

GCC Equities

Currencies

Commodities

Interest Rates

Equity Markets - Top Most & Bottom Most

Commodity Markets - Top Most & Bottom Most

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Americas

Conference Board’s Feb US consumer confidence index slid to 92.2 from 97.8 (revised) in Jan; below consensus

US existing home sales rose 0.4% to 5.47mn (seasonally adjusted) in Jan, the highest level in six months

US real GDP grew by 1% in 4Q15 (vs. 2% in 3Q15); above consensus of 0.4%

US weekly jobless claims climbed to 272,000 from 262,000 in the prior week; above consensus of 270,000

US existing home sales rose 0.4% to a seasonally adjusted annual rate of 5.47mn, a 6-month high

Europe

Markit’s Eurozone composite flash PMI fell to 52.7 (a 13-month low) in Feb from 53.6 in Jan; below consensus

Market’s flash composite PMI for the German economy fell to 53.8 in Feb from 54.5 in Jan

Eurozone’s economic confidence fell to 103.8 in Feb from 105.1 in Jan; below consensus

Eurozone final January inflation at 0.3% (vs. 0.2% in Dec); lower than initial estimate of 0.4%

Germany’s Feb business confidence fell to 105.7 in Feb from 107.3 in Jan, a 14-month low

Confederation of British Industry’s Feb manufacturer’s order book balance fell to -17 (the lowest since Oct 2015)

Rest of the World

Markit/Nikkei Japan’s flash manufacturing PMI fell to 50.2 (seasonally adjusted) in Feb from a final 52.3 in Jan

Japan’s final leading index, measuring the future economic activity, dipped to 102.1 in Dec from 103.2 in Nov

China’s consumer prices rose 1.8% YoY in Jan (vs. +1.6% in Dec), the highest rate since Aug 2015

S&P 500 – 1 year performance Euro Stoxx 600 – 1 year performance

Source: Bloomberg, Mashreq Private Banking; *Current

INTERNATIONAL EQUITY MARKETS

Last Close 5 Day % YTD % P/E (2015) *Div. Yield

S&P 500 1,948.05 1.58 -4.69 16.21 2.27

DJI 16,639.97 1.51 -4.51 14.99 2.71

Nasdaq Comp 4,590.47 1.91 -8.33 19.10 1.33

Euro Stoxx 600 331.54 1.58 -9.37 14.02 3.78

FTSE 100 6,096.01 2.45 -2.34 14.54 4.56

Dax 9,513.30 1.33 -11.45 11.52 3.16

CAC 40 4,314.57 2.17 -6.95 12.69 3.59

Nikkei 225 16,188.41 1.39 -14.95 16.39 2.02

Hang Seng 19,364.15 0.41 -11.64 9.94 4.47

Brazil - Bovespa

41,593.08 0.12 -4.05 10.38 4.46

Russia - Micex 1,816.73 1.30 3.14 6.40 4.61

BSE Sensex 23,154.30 -2.34 0.00 16.11 1.60

Shanghai Comp 2,767.21 -3.25 -21.81 11.10 2.22

Source: Bloomberg, Mashreq Private Banking

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UAE

Arabtec Holding’s 4Q15 net loss rose to AED360mn from AED94.4mn in 4Q14; co. seeks to cut costs further in FY16

ENOC’s retail unit plans to build 54 new service stations in Dubai and 11 more in KSA, as part of its expansion plans

DAMAC Properties launched AYKON City project at an investment cost of AED7.4bn, to be completed by 2021

Emirates Central Cooling Systems Corp. (Empower) halted plan to launch an IPO due to adverse market conditions

Emirates NBD shareholders approved raising bank’s euro medium-term note program size to $12.5bn from $7.5bn

Senaat’s unit Al Gharbia Pipe raised $185mn loan to finance manufacturing & sale of steel pipes for oil & gas sector

Saudi Arabia

Moody’s downgraded Dar Al Arkan’s corporate family and probability of default rating with negative outlook

RAWABI Vallianz Offshore Services issued SAR1bn Sukuk to partially finance its marine assets over 5-years period

S&P downgraded its long-term corporate credit rating on Saudi Electric Co. to ‘A-’ from ‘A+’ with a stable outlook

Saudi Electricity Company (SEC) will raise up to $1bn through loan to partly finance construction of a power plant

Saudi Arabia inflation rose 4.3% YoY in Jan, marking the biggest rise in 5 years

Rest of GCC

Oman’s Electricity Holding Co. plans to raise $520mn in long-term loans to finance two of its units

Qatar Insurance Co’s shareholders approved proposal to increase co’s capital to QAR2.43 bn from QAR1.84 bn

Barwa Real Estate’s FY15 net profit reached QAR3.06bn vs. QAR2.78bn in FY14; BoD proposed QAR2.2/sh. dividend

Qatar Islamic Bank’s shareholders approved proposal to raise maximum size of Sukuk program to $3bn from $1.5bn

Aluminium Bahrain’s FY15 net income plunged 37.8% YoY to BHD60mn; BoD proposed 11 fils per share dividend

Last Close 5 Day % YTD % P/E (2015) *Div. Yield

Dubai 3,124.07 1.01 -0.85 9.01 3.86

Abu Dhabi 4,251.18 0.91 -1.30 9.86 5.39

Saudi Tadawul 5,975.94 1.56 -13.54 11.46 4.27

Qatar Index 9,847.36 -1.20 -5.58 11.58 4.63

Kuwait Index 5,174.69 0.66 -7.84 - 4.81

Oman MSM 30 5,388.34 -0.57 -0.33 8.77 4.74

Bahrain All Share

1,182.30 0.84 -2.76 - 5.82

Egypt EGX 30 6,079.13 2.27 -13.23 6.26 2.24

Istanbul 100 Index

74,929.02 2.62 4.46 8.48 3.33

Source: Bloomberg, Mashreq Private Banking; *Current

DFMGI – 1 year performance Saudi Tadawul – 1 year performance

GCC EQUITIES


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The US dollar index posted weekly gain of 1.6%, marking the second consecutive weekly growth, helped by strong economic data that revived prospects of rate hike by the US Federal Reserve

Japanese yen fell 1.22% against USD, the first weekly decline after three weeks, after US’ 4Q15 GDP data topped estimates

British pound fell 3.71% vs. USD, marking a 7-year low due to persistent worries about a possible exit of the UK from the European Union (“Brexit”) at a referendum in June

Canadian dollar appreciated 1.84% against the USD, following a bounce-back in oil prices

Indian Rupee continued to fall against the USD for the 3rd consecutive week, down 0.24% on the back of weak export data and FPIs selling positions in the equity and debt markets

Russian rouble gained 0.89% against the USD after Russia’s central bank (CBR) left its monetary policy unchanged with the refi rate at 11.0%; also, CBR sees the inflation slowing after 2Q16

Last Close 5 Day % 1 Mth. % YTD % 1 Year %

USD Index 98.1480 1.60 -0.76 -0.49 3.00

EUR/USD 1.0934 -1.76 0.38 0.66 -2.34

GBP/USD 1.3871 -3.71 -2.55 -5.87 -10.15

USD/JPY 114.0000 1.22 -3.94 -5.17 -4.71

USD/CHF 0.9968 0.65 -1.80 -0.53 4.45

USD/CAD 1.3513 -1.84 -4.14 -2.36 7.97

USD/BRL 4.0000 -0.55 -2.67 0.99 40.79

USD/RUB 76.3175 -0.89 -2.25 5.24 23.58

USD/INR 68.6325 0.24 0.86 3.75 10.99

USD/CNY 6.5404 0.28 -0.57 0.72 4.32

USD/AUD 1.4028 0.28 -1.43 2.22 9.58

EUR/USD – 1 year performance GBP/USD – 1 year performance


CURRENCIES


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Brent crude futures & US West Texas Intermediate (WTI) crude futures rose 6.33% and 10.59%, respectively. WTI registered its sharpest rise since Aug. WTI made solid gains after data showing a slide in shale crude output and strong gasoline demand in the US. Oil prices rose despite concerns over rising inventory levels after the US Energy Information Administration (EIA) reported higher than expected increase in crude oil inventories last week (+3.5mn barrels vs. +3.0mn expected)

Gold declined around 0.3% during the week, on its reduced safe haven appeal, as oil prices stabilized and the US posted better-than-estimated GDP data.

Copper posted its second consecutive weekly gain of 2% after strong US economic data and China’s comment that the country would not resort to another devaluation of its currency to support the economy

Baltic Dry Index ended with second straight week of gains, up 3.81% on stable rates for smaller vessels and panamaxes.

Sugar prices jumped 11.1%, on the back of crimped supplies, following the worst EU beet harvest in more than four decades


Brent – ICE 35.10 6.33 6.04 -5.85 -43.91

WTI – Nymex 32.78 10.59 1.49 -11.50 -34.12

Gold Spot 1,222.65 -0.30 8.68 15.19 0.78

Silver Spot 14.70 -4.23 1.50 6.07 -11.45

Copper - CMX 211.80 2.00 2.62 -0.80 -22.02

S&P GSCI Spot Index

300.00 2.13 2.25 -3.74 -28.78

Baltic Dry Index 327.00 3.81 -2.97 -31.59 -39.44

WTI Crude – 1 year performance GOLD – 1 year performance


COMMODITIES


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The yield on 10-year US notes rose 1.6 basis points (bps) during the week after an upward revision of GDP in 4Q15 and above-expected personal income and spending data

The yield on German 10-year bunds declined 27.23%, in a flight to safety, as bond investors remain concerned over the volatile China growth story and likely deflation in Europe; accordingly, German 10-year bunds rose for the 6th week in a row, with yields falling to 0.15%

The Bank of Korea’s (BOK) Jan deposit interest rates on new deposit accounts was set at an annual average of 1.65% (-7bps vs. Dec 2015), while the lending interest rose as part of government efforts to ease steep increase in household debt levels

Turkey’s central bank kept its three main interest rates unchanged, despite above-target inflation, as it seeks to counter weak economic growth. The one-week repo rate was kept at 7.50%, while the overnight lending and borrowing rates were kept at 10.75% and 7.25%, respectively

Japan has kept a negative interest rate of 0.7% in order to achieve a 2% inflation goal and lift Japan out of stagnation

Hungaryʼs government debt management agency (ÁKK) said that it has decided to raise the interest premium on bonus Hungarian government bonds (BMAK) by 25-75 bps, aimed at making them more competitive as compared to the inflation-linked premium Hungarian government bonds (PMAK)


USD-10yr 1.76 1.00 -11.63 -22.35 -13.17

USD-2yr 0.79 6.96 -5.56 -24.27 22.80

Fed Funds Rate 0.37 -2.63 -2.63 85.00 236.36

USD-3m Libor 0.64 2.81 2.33 3.74 142.97

USD-6m Libor 0.88 1.45 1.87 4.05 132.71

German-10yr 0.15 -27.23 -67.04 -76.63 -50.67

UK-10yr 1.40 -1.06 -17.37 -28.62 -19.23

Japan-10yr (0.07) NA NA NA NA

AED-3m EIBOR 1.05 1.59 -0.91 -0.77 51.70

AED-6m EIBOR 1.27 1.12 -0.33 3.98 49.61

US 10 year Generic Yield – 1 year performance UK 10 year Generic Yield – 1 year performance


INTEREST RATES


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Ref Country Weekly Change Weekly Change

(USD Adj.)

1 China -3.25% -3.51%

2 India -2.34% -2.58%

3 Morocco -2.33% -3.39%

4 Tunisia -1.23% -2.51%

5 Qatar -1.20% -1.19%

6 Mauritius -1.17% -1.91%

7 Chile -1.16% 0.02%

8 Nigeria -0.83% -1.08%

9 Lebanon -0.77% -0.77%

10 Sri Lanka -0.75% -0.77%

Ref Country Weekly Change Weekly Change

(USD Adj.)

1 Argentina 9.33% 6.48%

2 Greece 5.53% 3.67%

3 Russia 4.33% 4.33%

4 Cyprus 4.03% 2.19%

5 Denmark 3.69% 1.89%

6 Romania 3.53% 2.08%

7 Italy 3.40% 1.57%

8 Peru 3.32% 3.05%

9 Mongolia 3.15% 2.57%

10 Norway 3.06% 1.54%

WEEKLY

Ref Country YTD Change YTD Change (USD Adj.)

1 Venezuela 15.30% 15.30%

2 Argentina 10.74% -7.43%

3 Kazakhstan 10.54% 7.78%

4 Slovakia 9.04% 9.76%

5 Peru 8.81% 5.41%

6 Colombia 8.06% 2.64%

7 Tunisia 4.54% 4.37%

8 Turkey 4.46% 1.73%

9 Jamaica 4.43% 3.35%

10 Thailand 4.27% 5.12%

YTD

Ref Country YTD Change YTD Change (USD Adj.)

1 China -21.81% -22.37%

2 Greece -19.68% -19.14%

3 Italy -18.37% -17.83%

4 Nigeria -15.41% -15.28%

5 Japan -14.95% -10.31%

6 Saudi Arabia -13.54% -13.47%

7 Egypt -13.23% -13.19%

8 Spain -12.52% -11.94%

9 Hong Kong -11.64% -11.94%

10 Germany -11.45% -10.86%

EQUITY MARKETS - TOP MOST & BOTTOM MOST


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Ref Commodity Weekly Change

1 Rough Rice -5.72%

2 Orange Juice -4.44%

3 Silver -4.23%

4 Wheat -4.01%

5 Cotton -3.48%

6 Lumber -3.35%

7 Steel Rebar -3.20%

8 Corn -3.01%

9 Palladium -2.92%

10 Bean Meal -2.76%

Ref Commodity Weekly Change

1 Sugar 11.10%

2 WTI Crude 10.59%

3 Brent Crude 6.33%

4 Gasoline 5.96%

5 Gasoil 5.69%

6 Rubber 4.59%

7 Lean Hogs 2.83%

8 Copper 1.84%

9 Feeder Cattle 1.78%

10 Cocoa 1.62%

WEEKLY

Ref Commodity YTD Pct Change

1 Lean Hogs 18.48%

2 Gold 15.19%

3 Tin 9.28%

4 Zinc 9.26%

5 Silver 6.07%

6 Aluminium 3.52%

7 Palm Oil 2.67%

8 Platinum 2.55%

9 Soybean Oil 1.57%

10 Live Cattle 1.29%

YTD

Ref Commodity YTD Pct Change

1 Natural Gas -23.36%

2 Gasoline -19.77%

3 Palladium -13.86%

4 WTI Crude -11.50%

5 Orange Juice -10.86%

6 Coffee -10.81%

7 Cocoa -10.25%

8 Rough Rice -10.16%

9 Sugar -8.73%

10 Cotton -8.47%

COMMODITY MARKETS - TOP MOST & BOTTOM MOST


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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.

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