weekly market review - mashreq bank · kuwait-based source: bloomberg, mashreq private banking;...

Weekly Market Review October 25th, 2015 – October 31st, 2015

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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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US GDP expanded at 1.5% annual rate in 3Q2015 vs. climbing 3.9% in 2Q2015 as businesses cut back on inventories

Consumer spending edged up 0.1% in Sep vs. rising 0.4% in Aug, the smallest gain in eight months

Non-defense capital goods orders, excluding aircraft, slipped 0.3% in Sep after declining 1.6% in Aug

Institute of Int. Finance said investors pumped $13.9bn in emerging markets in Oct, the 1st monthly inflow since Jun

Eurozone inflation stood flat in Oct after falling 0.1% YoY in Sep, maintaining pressure on the ECB for more easing

Economic sentiment ticked up to 105.9 in Oct from 105.6 in Sep; defied expectations of a minor decline

Ifo German business confidence index slipped to 108.2 in Oct from 108.5 in Sep as risks of global slowdown tool toll

Unemployment fell by 5,000 in Oct, signaling German cos. are weathering an emerging market slowdown

Italy’s jobless rate unexpectedly fell to 11.8% in Sep from 11.9% in Aug; consumer confidence rose in Oct

Britain’s economy grew 0.5% in 3Q2015, below the 0.7% recorded in 2Q2015 due to a slump in construction

S&P: Britain’s ‘AAA’ credit rating could be cut by as much as two notches if it leaves the European Union

Japan’s core consumer prices fell for a 2nd month by 0.1% in the year to Sep, remaining distant from BoJ’s 2% target

Household spending slid 0.4% YoY in Sep in price-adjusted real terms. Economists had forecasted a rise

Factory output rose 1.0% in Sep after 2 straight months of declines, eases pressure on BoJ for more aid

Chinese industrial companies profit inched down 0.1% YoY in Sep 2015 while they dropped 1.7% YoY in 9M2015

IMF's Asia & Pacific Department Director said China could beat IMF’s 2015 projection of 6.8% growth

Brazil’s planning and finance ministries expect $13.3bn primary budget deficit in 2015, said shortfall could be bigger

FGV consumer confidence index slid to 75.7 in Oct vs. 76.3 in Sep, the lowest since series began in 2005

Chile’s manufacturing grew 1.8% YoY in Sep, rising for only 3rd time in 2015 as the nation struggles to revive growth

South Korea's Sep industrial output far outperformed 0.4% gain forecast, as it rose 1.9% MoM (seasonally adjusted)

Taiwan’s GDP shrank 1.0% YoY in 3Q2015, the 1st time since 2009 as exports slid due to a slowing Chinese economy

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 2,079.36 0.20 0.99 17.58 2.09

DJI 17,663.54 0.10 -0.90 16.02 2.43

Nasdaq Comp 5,053.75 0.43 6.71 22.07 1.23

Euro Stoxx 600 375.47 -0.50 9.61 16.14 3.39

FTSE 100 6,361.09 -1.29 -3.12 15.82 4.12

Dax 10,850.14 0.52 10.65 13.18 2.73

CAC 40 4,897.66 -0.53 14.63 15.99 3.07

Nikkei 225 19,083.10 1.37 9.35 18.20 1.65

Hang Seng 22,640.04 -2.21 -4.09 11.33 3.78

Brazil - Bovespa

45,868.82 -3.63 -8.28 12.68 4.13

Russia - Micex 1,711.53 -0.81 22.55 6.16 4.97

BSE Sensex 26,656.83 -2.96 -3.06 17.30 1.43

Shanghai Comp 3,382.56 -0.88 4.57 14.37 1.82

Source: Bloomberg, Mashreq Private Banking

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Etisalat Group’s net income slid 8.6% YoY to AED1.95bn, top-line inched down 1.0% YoY to AED12.99bn. Meanwhile, the telecom group completed sale of its 85% shareholding in Zanzibar Telecom Ltd.

Emirates NBD net profit improved 7.0% YoY to AED1.67bn in 3Q2015. Operating profit grew 6% YoY to AED1.65bn

Dubai Islamic Bank’s earnings surged 43.6% YoY to AED972.1mn. Net income gained 15.9% YoY to AED1.6bn

Aramex said it expects to close acquisition deals worth around $150mn in the next two quarters

Emaar Malls Group 3Q2015 net profit jumped 17.1% YoY to AED376mn. Revenue grew 12.0% YoY to AED728mn

UAE-based water and wastewater project developer Metito secured an AED240mn loan from Dubai Islamic Bank

Dubai Investments 3Q2015 total income rose 12.5% YoY to AED701mn. Earnings jumped 30.1% YoY to AED246mn

Emirates Global Aluminium is reportedly in talks with banks to raise a $5bn loan to refinance debt

Dubai Financial Market’s net profit plunged 70.4% YoY to AED45.4mn as trading activity fell tracking lower oil

Dubai’s Majid Al Futtaim launched a $500mn, ten-year Sukuk; received orders in excess of $1.5bn from investors

The National Shipping Company of Saudi Arabia will by two used VLCCs from DK Maritime worth $157mn

Yanbu Aramco Sinopec Refining Co. Ltd. mulls selling shares to general public amid improving refining margins

Tawuniya Insurance will provide insurance to the National Commercial Bank staff over 12 months for SAR133.3mn

Kuwait-based Zain’s bottom-line shrank to KWD38mn in 3Q2015 from KWD46mn in 3Q2014

Bank Dhofar and Bank Sohar appointed legal & financial consultants for carrying due diligence of their merger

Ooredoo’s net profit more than doubled to QAR755.8mn in 3Q2015 from QAR375.0mn in 3Q2014

Industries Qatar’s net income dropped 25.2% YoY to QAR1.41bn as revenue declined 20.4% YoY to QAR1.22bn

Qatar Investment Authority inked a JV with Brookfield Property Partners for developing $8.6bn project in New York

Ahli United Bank’s 3Q2015 bottom-line climbed 23.7% YoY to $140.9mn. Net operating income rose 12.9% YoY

Bahrain Islamic Bank reduced its paid-up capital by approximately 15.34% from BHD94.91mn to BHD80.35mn

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

Dubai 3,503.75 -2.36 -7.16 12.92 7.11

Abu Dhabi 4,322.04 -3.64 -4.57 10.17 5.23

Saudi Tadawul 7,124.80 -3.49 -14.50 13.88 3.59

Qatar Index 11,604.59 0.17 -5.54 13.65 4.40

Kuwait Index 5,775.36 -0.09 -11.63 - 4.48

Oman MSM 30 5,928.15 0.38 -6.54 10.73 4.39

Bahrain All Share

1,250.37 -0.30 -12.35 7.16 5.48

Egypt EGX 30 7,507.89 -1.36 -15.89 11.74 1.82

Istanbul 100 Index

79,409.00 -0.89 -7.36 10.78 3.09

Source: Bloomberg, Mashreq Private Banking; *Current

DFMGI – 1 year performance Saudi Tadawul – 1 year performance

GCC EQUITIES


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The US dollar gained 0.11% since Oct 23 against euro as the Federal Reserve said this week it will consider raising interest rates in Dec 2015, following ECB President Mario Draghi’s Oct 22 signal that his board may add stimulus

Japanese yen moved 0.70% up against US dollar in the week after the Bank of Japan stood pat on monetary policy, disappointing some speculators who had bet the central bank would expand its already massive stimulus

Chinese yuan appreciated 0.52% during the past five days as the central bank said it will consider a trial program in the Shanghai free trade zone allowing domestic individual investors to directly buy overseas assets

Brazil’s real strengthened 0.53% in the week amid speculation banks are selling dollars in an attempt to lower the central bank rate used in settling some financial contracts. The real also got a boost from data showing Brazil’s nominal budget deficit stood at reais 77.3bn in Sep, less than the reais 78.6bn median forecast

Russian ruble fell 2.54% during the week as the US Fed signaled it may raise interest rates as soon as Dec, stoking speculation the Bank of Russia will choose to protect its currency by limiting the scale of its own policy easing

Australian dollar depreciated 1.10% this week, pressured by speculation the Reserve Bank of Australia might cut interest rates next week as 3Q2015 inflation came softer than expected, plus the risk of a US rate hike by 2015-end

Malaysian ringgit declined 1.5% this week to 4.3012 per US dollar as Fitch Ratings’ warning that Malaysia may miss its fiscal deficit reduction target added to concern higher US interest rates will spur more capital outflows

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

USD Index 96.9460 -0.19 0.62 7.40 12.54

EUR/USD 1.1006 -0.11 -1.53 -9.03 -12.74

GBP/USD 1.5428 0.74 1.98 -0.96 -3.59

USD/JPY 120.6200 -0.70 0.62 0.70 10.45

USD/CHF 0.9879 0.95 1.50 -0.64 3.34

USD/CAD 1.3080 -0.65 -1.75 12.55 16.95

USD/BRL 3.8558 -0.53 -2.32 45.09 60.48

USD/RUB 63.9548 2.54 -2.15 5.30 54.10

USD/INR 65.2650 0.67 -0.50 3.52 6.20

USD/CNY 6.3174 -0.52 -0.61 1.80 3.30

USD/AUD 1.4010 1.10 -1.69 14.47 23.77

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


CURRENCIES


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US & Brent crude futures gained 4.5% & 3.3% during the week, respectively, as data showed US oil rig count fell for a 9th straight week to 578, the least since Jun 2010 while US oil output in Aug fell to a 3rd lowest figure in 2015

Spot gold prices ended the week 1.92% lower on the chance the US Fed may still raise interest rates this year. Rising interest rates tend to weigh on gold because they lift the opportunity cost of holding non-yielding bullion

CBoT wheat futures climbed 6.4% in the week ended Oct 30, recording its biggest weekly gain in four months on concerns over potential supply shortfalls amid unfavorable weather across key producing regions

ICE cocoa futures gained 4.3% since Oct 23, supported by worries over the potential impact of dry weather that took place earlier in the growing season, in Ivory Coast and Ghana on main crop production

LME nickel and zinc futures dropped 4.3% & 2.6%, respectively, during the past 5 trading days as investors realized that production cuts announced by Glencore earlier in Oct 2015 would take time to tighten the market

CBoT soybeans futures slipped 1.3% this week as China snapped US soybean in recent deals and is expected to switch to South American beans when Brazil and Argentina harvest their crops early in 2016. Rains in Brazil will help farmers planting a soybean crop that is expected to produce a record 100mn tons

LME aluminum futures fell 1.2% in the week on worries that China was likely to sell more aluminum onto world markets by offering its struggling smelters cheaper power prices to keep them operating


Brent – ICE 49.56 3.27 2.46 -13.55 -42.53

WTI – Nymex 46.59 4.46 3.33 -12.54 -42.57

Gold Spot 1,142.16 -1.92 2.43 -3.60 -4.72

Silver Spot 15.55 -1.76 7.09 -0.98 -5.77

Copper - CMX 231.75 -1.38 -1.00 -17.98 -24.33

S&P GSCI Spot Index

363.44 1.78 1.14 -13.08 -32.90

Baltic Dry Index 721.00 -6.85 -19.89 -7.80 -49.37

WTI Crude – 1 year performance GOLD – 1 year performance


COMMODITIES


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The US Federal Reserve left its short-term interest rates at record lows of 0% to 0.25% on Oct 28. However, the central bank gave its clearest signal yet that a rate increase in Dec 2015 is on the table, which prompted investors to shed bondholding, leading to a 5.6 basis points (bps) rise in 10-year yield this week to 2.1%

The Bank of Japan held rates and annual asset purchase at ¥80tn on Oct 30, preferring to preserve its dwindling policy options in the hope that economy can overcome the drag from China’s slowdown without additional monetary support

Russia’s central bank left its benchmark rate, the one-week minimum auction repo rate, unchanged at 11% on Oct 30 for the second time in a row, stressing inflation risks above worries about a stagnant economy

Sweden’s national bank (the Riksbank) kept the nation’s record low key interest rate at -0.35% on Oct 28. The Riksbank said it is expanding the country’s bond buying program with a further kronor 65bn ($766mn)

Mexico’s central bank left its key rate at a record low of 3.0% on Oct 29, saying the growth outlook had worsened while inflation remained tame, but hinted they are prepared to raise borrowing costs once US Fed moves rates up

Colombia’s central bank increased its benchmark policy rate by 50 bps to 5.25%, the most in more than a decade to curb the fast increase in consumer prices. Inflation accelerated to 5.35% in Sep, its fastest pace in over 6 years

Tunisia’s central bank cut the benchmark interest rate by 50 bps to 4.25% for the first time since 2011, in an attempt to revive economic growth after militant attacks took a toll on tourism


USD-10yr 2.14 2.66 5.17 -1.34 -7.10

USD-2yr 0.72 12.90 15.12 8.95 54.27

Fed Funds Rate 0.12 0.00 71.43 100.00 33.33

USD-3m Libor 0.33 1.86 1.20 28.68 41.55

USD-6m Libor 0.55 4.18 2.79 51.30 67.02

German-10yr 0.52 0.98 -11.93 -4.44 -38.82

UK-10yr 1.92 3.28 9.08 9.45 -13.58

Japan-10yr 0.30 2.01 -13.39 -5.59 -34.48

AED-3m EIBOR 0.84 -0.13 2.46 24.73 22.15

AED-6m EIBOR 1.00 1.07 5.16 18.51 17.52

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 Venezuela -8.49% -8.49%

2 Luxembourg -4.40% -4.51%

3 Indonesia -4.25% -4.70%

4 Abu Dhabi–UAE -3.64% -3.64%

5 Brazil -3.63% -3.12%

6 Saudi Arabia -3.49% -3.50%

7 Russia -3.13% -3.13%

8 Canada -3.04% -2.40%

9 India -2.96% -3.61%

10 Nigeria -2.74% -2.73%

Ref Country Weekly Change Weekly Change

(USD Adj.)

1 Argentina 9.99% 10.07%

2 Jamaica 5.89% 5.90%

3 Latvia 2.80% 2.68%

4 Belgium 2.23% 2.12%

5 Ukraine 2.07% 1.18%

6 Israel 1.83% 2.71%

7 Slovakia 1.65% 1.54%

8 Japan 1.37% 2.08%

9 Ghana 1.30% 2.10%

10 Romania 1.14% 1.02%

WEEKLY

Ref Country YTD Change YTD Change (USD Adj.)

1 Venezuela 186.74% 186.74%

2 Jamaica 71.94% 64.50%

3 Latvia 46.54% 33.31%

4 Argentina 45.25% 29.28%

5 Malta 30.27% 18.51%

6 Slovakia 29.74% 18.03%

7 Hungary 29.60% 20.17%

8 Denmark 25.99% 14.44%

9 Ireland 23.04% 11.94%

10 Italy 18.04% 7.39%

YTD

Ref Country YTD Change YTD Change (USD Adj.)

1 Peru -28.72% -35.39%

2 Ukraine -23.24% -47.09%

3 Colombia -19.49% -33.94%

4 Egypt -15.89% -25.04%

5 Nigeria -15.77% -22.37%

6 Kenya -15.72% -25.18%

7 Greece -15.13% -22.79%

8 Indonesia -14.77% -22.84%

9 Saudi Arabia -14.50% -14.42%

10 Bulgaria -14.40% -22.14%

EQUITY MARKETS - TOP MOST & BOTTOM MOST


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Ref Commodity Weekly Change

1 Lean Hogs -6.92%

2 Tin -4.79%

3 Nickel -4.33%

4 Rubber -4.10%

5 Lead -3.36%

6 Lumber -2.80%

7 Zinc -2.56%

8 Palladium -2.49%

9 Feeder Cattle -2.13%

10 Rough Rice -2.07%

Ref Commodity Weekly Change

1 Wheat 6.42%

2 Gasoline 5.22%

3 WTI Crude 4.46%

4 Cocoa 4.29%

5 Heat Oil 4.28%

6 Brent Crude 3.27%

7 Gasoil 2.59%

8 Coffee 2.11%

9 Sugar 1.68%

10 Natural Gas 1.53%

WEEKLY

Ref Commodity YTD Pct Change

1 Cocoa 11.99%

2 Cotton 5.06%

3 Rough Rice 1.04%

4 Sugar 0.00%

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6

7

8

9

10

YTD

Ref Commodity YTD Pct Change

1 Nickel -33.60%

2 Steel Rebar -31.95%

3 Coffee -27.40%

4 Lean Hogs -27.09%

5 Rubber -26.33%

6 Lumber -23.38%

7 Tin -22.71%

8 Zinc -21.49%

9 Natural Gas -20.80%

10 Aluminium -20.19%

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.

weekly market review - mashreq bank · kuwait-based source: bloomberg, mashreq private banking;...

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