Weekly Market Review October 19, 2014 – October 25, 2014

October 26, 2014

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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 new single-family home sales rose 0.2% in Sept while Aug sales was revised down to 0.47mn from 0.50mn units

The Conference Board Leading Economic Index for US increased 0.8 % in September after being flat in August

Equipment Leasing & Finance Association (ELFA) data showed US companies’ borrowing for capital investment rose 21% YoY in Sept while ELFA’s confidence index rose marginally to 60.4 in Oct from 60.2 in Sept

US manufacturing sector slowed in Oct as flash Manufacturing PMI by Markit fell to 56.2 from Sept reading of 57.5

The ECB started selling covered bonds in its fight to revive Euro-zone economy and keep deflation at bay

Markit's Composite Euro zone Flash PMI rose to 52.2 in Oct from 52 in Sept. However, firms slashed prices and future optimism fell to lowest level in over a year

Markit's flash composite PMI for Germany climbed to 54.3 in Oct from 54.1 in Sept, easing growth concerns

UK economy cooled as GDP expanded 0.7% in 3Q2014 as compared to 0.9% growth achieved in 2Q2014

The YouGov/CEBR UK Consumer Confidence Index for Oct slid 2.9 points to 111.2, biggest monthly fall since Oct ’10

Markit's preliminary French composite PMI fell to 48 in Oct from 48.4 in Sept, as firms cut prices on weak demand

Spanish jobless rate fell to 23.7% in 3Q2014, down from 24.5% in 2Q2014 as the services sector took on more staff

Japan’s exports rose 6.9% YoY in Sept vs. 1.3% YoY decline in Aug. Imports also gained 6.2% YoY in Sept, leaving a trade deficit of Yen 958.3bn, wider than the median estimate of Yen 777bn deficit

The Markit/JMMA flash Japan Manufacturing PMI rose to 52.8 in Oct from a final reading of 51.7 in Sept

China’s State Council announced it will open up more sectors to private investment to support slowing economy

China’s 3Q2014 GDP growth slowed to 7.3% YoY as compared to 7.5% YoY growth recorded in 2Q2014

The flash HSBC/Markit China Manufacturing PMI edged up to 50.4 in Oct from 50.2 in Sept

S&P affirmed Russia’s investment-grade rating at ‘BBB-’ with a negative outlook

Australia’s CPI rose 0.4% QoQ and 2.5% YoY in 3Q2014, giving Reserve Bank room to hold rates low for longer

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

Source: Bloomberg, Mashreq Private Banking

INTERNATIONAL EQUITY MARKETS

Last Close Change 5 Day % YTD %

S&P 500 1,964.58 77.82 4.12 6.29

DJI 16,805.41 425.00 2.59 1.38

Nasdaq Comp 4,483.72 225.28 5.29 7.35

Euro Stoxx 600 327.17 8.49 2.66 -0.33

FTSE 100 6,388.73 78.44 1.24 -5.34

Dax 8,987.80 137.53 1.55 -5.91

CAC 40 4,128.90 95.72 2.37 -3.89

Nikkei 225 15,291.64 759.13 5.22 -6.14

Hang Seng 23,302.20 278.99 1.21 -0.02

Brazil - Bovespa 51,940.73 -3,783.06 -6.79 0.84

Russia - Micex 1,380.39 -4.33 -0.31 -8.22

BSE Sensex 26,851.05 742.52 2.84 26.83

Shanghai Comp 2,302.28 -38.90 -1.66 8.80

Source: Bloomberg, Mashreq Private Banking

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Emirates NBD 3Q2014 net profit surged 102% YoY to AED1.56bn on higher income and lower provisions

Waha Capital expects its assets to grow by 25% in next 2-3 years as it invests $500mn in the region

RAM ratings affirmed Abu Dhabi Commercial Bank’s (ADCB) long and short-term Financial Institution Rating with a Stable outlook. ADCB reports a 11% YoY increase in 3Q2014 net profit to AED1.02bn

Abu Dhabi-based National Marine Dredging Co. won $1.5bn Suez Canal expansion project in Egypt

Dubai Islamic Bank ‘s 3Q2014 net profit jumped 56.7% YoY to AED723mn

National Bank of Ras Al Khaimah reported a 5.3% YoY fall in its 9M2014 net profit to AED1.1bn

Abu Dhabi-based Masdar signed a $125mn deal with Oman’s Rural Areas Electricity Company to build wind farms

Saudi based ACWA Power seeks to finance $15bn worth of projects, nearly half of which are in renewable energy

Saudi Arabian Airlines plans to raise around SR10bn through the listing of its three units

Jarir Marketing Co. plans to invest SR1.1bn over the next 5years to double its stores in Saudi Arabia and the Gulf

Saudi based Rabigh Refining & Petrochem. Co. posted an 11 times YoY increase in 3Q2014 net profit to SR294mn

Saudi-based real estate developer, Dar Al Arkan, plans to spend over SR1bn on projects in 2015

Saudi-based Taiba Holding’s profit surged almost 12 times YoY in 3Q2014 to SR817.2mn

Qatar Investment Authority acquired 20% stake in Hong Kong based Lifestyle International Holdings for QR2.24bn

Qatar based Barwa Real Estate Group plans to establish a QR1.5bn Motor City in Doha.

Industries Qatar reported a 50% QoQ jump in its 3Q2014 net profit to QR1.89bn on resurgence in fertilizer business

Kuwait's Aviation Lease & Finance Co., a unit of Kuwait Finance House, plans to spend $600mn to buy 15 new aircrafts over the next two years

Kuwait Investment Authority plans to sell stake in Kuwait Finance House, Zain and Kuwait Invest. Co. for $5.4bn

Bahrain-based Gulf International Bank reported a net income of $72.7mn in 9M2014 vs. $101.5mn in 9M2013

Last Close Change 5 Day % YTD %

Dubai 4,573.05 302.62 7.09 35.71

Abu Dhabi 4,829.83 61.68 1.29 12.58

Saudi Tadawul 10,165.33 617.79 6.47 19.09

Qatar Index 13,465.69 523.69 4.05 29.73

Kuwait Index 7,414.75 4.41 0.06 -1.79

Oman MSM 30 7,009.71 137.44 2.00 2.56

Bahrain All

Share 1,437.04 -10.02 -0.69 15.07

Egypt EGX 30 8,797.29 203.78 2.37 29.70

Istanbul 100

Index 79,417.13 3,883.84 5.14 17.13

Source: Bloomberg, Mashreq Private Banking

DFMGI – 1 year performance Saudi Tadawul – 1 year performance

GCC EQUITIES

Source: Bloomberg, Mashreq Private Banking

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The US dollar appreciated 0.71% in the week to $1.2671 per euro as a longer-range view of economic indicators still points to a sustained US recovery, including in the housing sector. US existing home sales rose 2.4% in Sept

The UK currency strengthened 0.7% in the week to 78.77 pence per euro, its first weekly advance since September, after a report showed UK economy grew in line with analysts’ forecasts for the 3Q2014

Chinese Yuan appreciated for a third week to 6.1165 per dollar after PMI data showed manufacturing activity continued to expand albeit at a slower rate in the world's second largest economy

South Korean won climbed 0.8% in the week to 1,057.70 per dollar as the economy grew 0.9% QoQ in 3Q2014 vs. 0.5% growth recorded in 2Q2014

Indonesian rupiah rose 0.33% to 12,074 per dollar, marking a 2nd week of gains after the inauguration of President Joko Widodo on Oct. 20. Widodo has pledged to cut fuel subsidies and boost economic growth to more than 7%.

Brazil’s real weakened 1.58% in the week to 2.4739 per dollar as the incumbent Dilma Rousseff strengthened her chances of return defeating the market-friendly Aecio Neves

Indian rupee appreciated 0.26% in the week to 61.2813 per dollar, in tandem with recovery in local equities on hopes of further economic reforms by the government after ruling party’s strong show in two state polls

Last Close Change 5 Day % YTD %

EUR/USD 1.2671 -0.0090 -0.71 -7.80

GBP/USD 1.6090 -0.0003 -0.02 -2.82

AUD/USD 0.8793 0.0049 0.56 -1.39

USD/JPY 108.1600 1.2800 1.20 2.71

USD/CHF 0.9519 0.0056 0.59 6.61

USD/CAD 1.1231 -0.0046 -0.41 5.72

USD/BRl 2.4739 0.0385 1.58 4.73

USD/RUB 41.8085 1.1629 2.86 27.20

USD/INR 61.2813 -0.1612 -0.26 -0.84

USD/CNY 6.1165 -0.0087 -0.14 1.03

DXY Index 85.7320 0.6220 0.73 7.12

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

Source: Bloomberg, Mashreq Private Banking

CURRENCIES

Source: Bloomberg, Mashreq Private Banking

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WTI for December delivery dropped 1.28% in the week to $81 per barrel on Nymex amid speculation a drop in Saudi Arabian oil supply to the market isn’t a signal for production cuts

Gold notched a 0.6% weekly loss, after two consecutive weekly rises, as rallying equity markets and strong US economic data dented demand for the precious metal as an insurance against risk

Nickel futures lost 4.1% in the week as stockpiles monitored by the London Metal Exchange climbed 15% since Sept. 1, 2014, signaling ample supplies even as the economy slows in China, the world’s top metals consumer

Arabica-coffee prices dropped 9.1% in the week as rains forecast for Brazil raised bets that this rain may be the start of regular precipitation that could heal the coffee trees. Brazil is the source of about half of the world’s Arabica beans

Soybean futures rose 3.2%, registering a fourth straight weekly gain, the longest rally in 13 months. Inventories from last year’s crop have declined to the lowest since 1973 amid increasing demand for exports from the US

Wheat futures gained 3.5% in the week after market researcher SovEcon said dry conditions across European Russia probably will cut the country’s wheat harvest to less than 50mn metric tons in 2015

Last Close Change 5 Day % YTD %

Gold spot 1,230.90 -7.42 -0.60 2.09

Silver spot 17.20 -0.06 -0.36 -11.64

Copper-CMX 304.10 3.75 1.25 -9.43

Brent - ICE 86.13 -0.03 -0.03 -19.00

WTI - Nymex 81.01 -1.05 -1.28 -12.63

S&P GSCI Spot

Index 537.10 -3.13 -0.58 -15.05

Baltic Dry Index 1,192.00 248.00 26.27 -47.65

WTI Crude – 1 year performance GOLD – 1 year performance

Source: Bloomberg, Mashreq Private Banking

COMMODITIES

Source: Bloomberg, Mashreq Private Banking

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US 10-year yields rose 7.5 bps in the week to 2.27% as treasuries fell before the Federal Reserve holds a meeting next week where policy makers are forecasted to end monthly bond-buying

10-year UK gilts yield gained 4.1 bps in the week to 2.23% as worries about the spread of the Ebola virus and nervousness over euro zone bank stress tests boosted demand for safe-haven government debt

Greece’s 10-year yield decreased 74 bps to 7.33% while Portugal’s 10-year yield fell 4bps to 3.26% in the week as speculation that the European Central Bank will extend stimulus to include purchases of corporate debt fueled demand for higher-yielding assets

German 10-rear bunds yield rose 3.3 bps, first time in six weeks to 0.89% after the unexpected uptick in euro zone business surveys staved off fears the bloc could be headed for a triple-dip recession

Japan’s Finance Ministry sold Yen 5.7tn three-month debt at a record-low yield of minus 0.0037% on Oct 23, 2014. This is the 1st instance of bonds being sold at negative yield in an auction even though short-term yields were trading in negative territory in secondary markets recently

The benchmark Indian 10-year bond yield fell 3 bps in the week to 8.36%, a third consecutive weekly fall, as government bonds edged up on hopes for further reforms and earlier than expected rate-cuts by the central bank

Last Close Change 5 Day % YTD %

USD-1w Libor 0.12 0.0000 0.00 -6.81

USD-3m Libor 0.23 0.0018 0.76 -5.28

USD-6m Libor 0.32 -0.0001 -0.03 -7.21

USD-10yr 2.27 0.0749 3.41 -25.09

AED-1m EIBOR 0.39 0.0029 0.74 -15.53

AED-3m EIBOR 0.69 0.0000 0.00 -14.94

AED-12m EIBOR 1.02 0.0000 0.00 -13.99

UK-10yr 2.23 0.0410 1.87 -26.21

Japan-10yr 0.47 -0.0060 -1.27 -36.73

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

Source: Bloomberg, Mashreq Private Banking

INTEREST RATES

Source: Bloomberg, Mashreq Private Banking

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Ref Country Weekly Change Weekly Change

(USD Adj.)

1 Brazil -6.79% -8.24%

2 Kazakhstan -4.66% -4.04%

3 Russia -3.38% -3.38%

4 Latvia -2.46% -3.14%

5 Hungary -1.99% -3.53%

6 China -1.66% -1.52%

7 Bulgaria -1.33% -2.00%

8 Cyprus -0.88% -1.57%

9 Jamaica -0.78% -0.84%

10 Lebanon -0.76% -0.76%

Ref Country Weekly Change Weekly Change

(USD Adj.)

1 Dubai−UAE 7.09% 7.08%

2 Saudi Arabia 6.47% 6.45%

3 Greece 6.39% 5.64%

4 Japan−Topix 5.53% 4.28%

5 Turkey 5.14% 5.82%

6 Denmark 4.75% 4.05%

7 Italy 4.25% 3.51%

8 United States 4.12% 4.12%

9 Qatar 4.05% 4.05%

10 Ireland 3.98% 3.25%

WEEKLY

Ref Country YTD Change YTD Change (USD Adj.)

1 Argentina 95.80% 50.34%

2 Dubai−UAE 35.71% 35.70%

3 Qatar 29.73% 29.71%

4 Egypt 29.70% 26.03%

5 India 26.83% 27.90%

6 Serbia 25.67% 11.20%

7 Montenegro 24.60% 14.88%

8 Ukraine 22.61% -22.29%

9 Sri Lanka 22.00% 21.93%

10 Slovenia 21.57% 12.09%

YTD

Ref Country YTD Change YTD Change (USD Adj.)

1 Russia -28.14% -28.14%

2 Portugal -21.14% -27.29%

3 Austria -15.16% -21.78%

4 Greece -14.74% -21.39%

5 Jamaica -10.98% -16.09%

6 Estonia -9.86% -16.89%

7 Latvia -9.85% -16.89%

8 Malta -8.54% -15.68%

9 Hungary -6.82% -17.19%

10 Japan−Nikkei -6.14% -8.61%

EQUITY MARKETS - TOP MOST & BOTTOM MOST

Source: Bloomberg, Mashreq Private Banking

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Ref Commodity Weekly Change

1 Coffee -9.09%

2 Ethanol -4.58%

3 Nickel -4.39%

4 Natural Gas -3.80%

5 Gasoline -2.28%

6 Cocoa -2.18%

7 WTI Crude -2.10%

8 Lead -1.65%

9 Sugar -1.44%

10 Rough Rice -1.12%

Ref Commodity Weekly Change

1 Bean Meal 5.96%

2 Rubber 4.34%

3 Orange Juice 3.74%

4 Palladium 3.50%

5 Palm Oil 3.00%

6 Soybeans 2.71%

7 Live Cattle 1.94%

8 Zinc 1.55%

9 Corn 1.44%

10 Cotton 1.29%

WEEKLY

Ref Commodity YTD Pct Change

1 Coffee 72.99%

2 Feeder Cattle 42.71%

3 Live Cattle 25.09%

4 Cocoa 12.59%

5 Zinc 9.97%

6 Aluminium 9.32%

7 Palladium 9.02%

8 Nickel 7.99%

9 Lean Hogs 5.65%

10 Orange Juice 2.64%

YTD

Ref Commodity YTD Pct Change

1 Rubber -32.17%

2 Soybeans -25.52%

3 Cotton -24.61%

4 Natural Gas/ICE -22.70%

5 Steel Rebar -22.34%

6 Brent Crude -22.27%

7 Gasoil -22.11%

8 Gasoline -21.68%

9 Rough Rice -20.02%

10 Bean Meal -19.99%

COMMODITY MARKETS - TOP MOST & BOTTOM MOST

Source: Bloomberg, Mashreq Private Banking

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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.