Weekly Market Review - Mashreq Bank · Oman International Develop. & Investment’s shareholders...

Weekly Market Review May 31, 2015 – June 6, 2015

June 7, 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 non-farm payroll increased 280,000 in May, the largest gain since Dec 2014. Jobless rate rose by 0.1% to 5.5%

US consumer spending remained unchanged in Apr vs. a forecast of 0.2% rise & followed by a 0.5% increase in Mar

ISM’s factory activity index rose to 52.8 from 51.5 in Apr, boosted by new orders & factory employment

New orders for factory goods slipped 0.4% in Apr on weak demand for transportation & other goods

Trade deficit narrowed by 19.2% MoM in Apr to $40.9bn as exports rose 1.0% while imports fell 3.3%

Paris-based OECD reduced global growth forecast to 3.1% from 3.7% in 2015, expects a recovery to 3.8% in 2016

Markit/JP Morgan’s Global All-Industry Output index fell to 53.6 in May from 54.2 in Apr while recruitment gained

Markit’s Euro zone factory PMI moved up to 52.2 in May from 52 in Apr. PMI of Spain and Italy jumped to 55.8 & 54.8 from 54.2 & 53.8, respectively. Germany’s index dropped to 51.1 from 52.1 while French PMI stood below 50

Euro zone inflation rose 0.3% YoY in May after a flat reading in Apr, due to rising food cost. Core CPI gained 1.0%

Retail sales grew 0.7% MoM & 2.2% YoY, unemployment fell in Apr adding to signs of economic recovery

German unemployment declined for an 8th month by a seasonally adjusted 6,000 in May. Jobless rate stood at 6.4%

UK factory PMI rose to 52 in May from 51.8 in Apr as manufacturing expanded, fueled by domestic demand

House prices rose 4.6% YoY in May, down from 5.2% in Apr, recording smallest advance since Aug 2013

Japan manufacturing expanded in May as Markit/JMMA PMI rose to a seasonally adjusted 50.9 vs. 49.9 in Apr

China’s official manufacturing PMI edged up to 50.2 in May from 50.1 in Apr. HSBC/Markit final PMI stood at 49.2

HSBC/Markit services PMI reached 53.5 vs. 52.9 in Apr as new business rose at fastest pace in 3 years

Brazil’s industrial output declined 1.2% MoM in Apr, less than 1.4% drop estimates. Industrial output fell 7.6% YoY

HSBC/Markit India manufacturing PMI climbed to 52.6 from 51.3 in May helped by improved domestic demand

World Bank said Russia will contract by 2.7% in 2015 vs. 3.8% estimated earlier, helped by higher oil & low inflation

Australia’s GDP advanced 0.9% QoQ & 2.3% YoY in 1Q2015 as newly built mines boosted exports by 5%

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 2,092.83 -14.56 -0.69 1.65

DJI 17,849.46 -161.22 -0.90 0.15

Nasdaq Comp 5,068.46 -1.57 -0.03 7.02

Euro Stoxx 600 389.00 -10.87 -2.72 13.56

FTSE 100 6,804.60 -179.83 -2.57 3.63

Dax 11,197.15 -216.67 -1.90 14.19

CAC 40 4,920.74 -87.15 -1.74 15.17

Nikkei 225 20,460.90 -102.25 -0.50 17.25

Hang Seng 27,260.16 -164.03 -0.60 15.48

Brazil - Bovespa 52,973.38 212.90 0.40 5.93

Russia - Micex 1,652.07 42.88 2.66 18.29

BSE Sensex 26,768.49 -1,059.95 -3.81 -2.66

Shanghai Comp 5,023.10 411.35 8.92 55.29


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UAE-based retail operator Marka confirmed it is planning more than one acquisition over short & medium term

Emaar Properties' mixed-use beachfront development in Dubai is expected to have a preliminary cost of ~AED10bn

Dana Gas concluded an agreement with BP for drilling and exploration well in Egypt’s Nile Delta

Abraaj Group has hired advisors as it considers an IPO of credit-card processing unit, Network International

Fitch Ratings assigned long-term Issuer Default Rating of A with a stable outlook to Etihad Airways for the 1st time

Etisalat signed a share purchase agreement for the sale of its 85% stake in Zanzibar Telecom to Millicom

Emaar The Economic City signed the Murabaha agreement with Alinma Bank for 8-years SAR1.25bn loan

Dur Hospitality plans to invest SAR1.5bn in a portfolio of hotels & residences in Saudi Arabia over the next 7 years

ACWA Power is bidding for projects in southern Africa as it aims the region to a/c for 20% of its portfolio by 2025

Saudi asset manager, SEDCO Capital announced 3 new realty deals worth $145.5mn, bolstering its investment in US

InterContinental Hotels Group inked a deal with Al Majd Al Arabiah to construct world’s largest hotel in Mecca

Jabal Omar Develop., Taiba Holding, Knowledge Eco. City, Bahri and Makkah Construction’s shares will not be open to foreign investments as Saudi Arabia permits direct stock purchases by foreign institutions in Jun 2015

Jazeera Airways submitted a letter of intent to buy a 35% stake in loss-making state carrier Kuwait Airways

Warba Bank signed a bond with Al Mulla International Finance to acquire KWD20mn worth auto financing portfolio

Oman Electricity Transmission Co. raised $1bn debt to repay existing debt, finance capex. & for general purposes

Drake & Scull Engineering Oman won several MEP and HVAC projects in Oman worth AED350mn

Oman International Develop. & Investment’s shareholders approved the merger with Oman National Invest. Corp.

Vodafone Qatar reported lower net loss of QAR215.8mn in FY2014-15 vs. a net loss of QAR246.0mn in FY2013-14

Moody’s upgraded the insurance financial strength rating of Qatar Islamic Insurance Company to Baa1 from Baa2

Bahrain-based Ibdar Bank posted a 200% YoY surge in 1Q2015 bottom-line to $3mn. Total income grew 65.8% YoY


Dubai 4,032.24 31.74 0.79 6.84

Abu Dhabi 4,587.23 70.67 1.56 1.29

Saudi Tadawul 9,668.10 -88.97 -0.91 16.02

Qatar Index 12,092.25 190.18 1.60 -1.58

Kuwait Index 6,323.84 9.01 0.14 -3.24

Oman MSM 30 6,462.00 71.60 1.12 1.87

Bahrain All Share 1,367.06 0.71 0.05 -4.17

Egypt EGX 30 8,780.76 -131.29 -1.47 -1.63

Istanbul 100 Index 81,943.42 -1,037.73 -1.25 -4.41


DFMGI – 1 year performance Saudi Tadawul – 1 year performance

GCC EQUITIES


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The US dollar surged to a 13-year high in the week against the yen and gained 1.19% as a report showed US payrolls climbed the most in 5 months in May, boosting the case for the Federal Reserve to raise interest rates in 2015

The British pound posted its worst weekly performance since the start of May, weakening 1.3% to 72.78 pence per euro as European bond yields surged and added support to the common currency

The Canadian dollar advanced 0.08% in the week against US dollar despite a greenback rally on US employment data as Canadian employers added 58,900 jobs in May, recording biggest jump in seven months

Russian ruble depreciated 7.2% in the week to 56.13 per US dollar after US employment data bolstered the case for higher interest rates in 2015 and Bank of Russia continued foreign-currency purchases

Mexican peso fell 2.17% to 15.71 per US dollar in the week, hurt by lower growth expectations for 2015 as well as ongoing political uncertainty. Mexico will hold its midterm elections on Jun 7 and the run up to the vote has been marred by a wave of violence and intimidation

Indian rupee strengthened 0.11% in the week to 63.76 per US dollar, supported by fresh selling of the US currency by banks and exporters in view of good foreign capital inflows

Malaysian ringgit weakened for a third week by 1.4% to 3.72 per US dollar as crude prices fell from May 29. The South East Asian nation derives 22% of state revenues from energy-related sources


EUR/USD 1.1114 0.0128 1.17 -8.13

GBP/USD 1.5270 -0.0021 -0.14 -1.97

AUD/USD 0.7623 -0.0022 -0.29 -6.75

USD/JPY 125.6300 1.4800 1.19 4.88

USD/CHF 0.9397 -0.0006 -0.06 -5.49

USD/CAD 1.2444 -0.0010 -0.08 7.08

USD/BRl 3.1424 -0.0363 -1.14 18.24

USD/RUB 56.1260 3.7855 7.23 -7.59

USD/INR 63.7550 -0.0700 -0.11 1.13

USD/CNY 6.2028 0.0052 0.08 -0.04

DXY Index 96.3060 -0.6010 -0.62 6.69

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


CURRENCIES


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Gold prices closed 1.56% lower since May 29 after stronger-than-expected US employment data reanimated speculation that the Federal Reserve would soon raise interest rates

Crude oil futures posted a decline in the week as a stronger dollar and continued oversupply of crude oil weighed on the market even as OPEC decided to keep its output target unchanged at 30mn barrels a day and number of rigs drilling for oil in the US fell for a 26th straight week

Copper futures ended down 1.3% in the week on concern that slowing economic growth will curb world demand for raw materials. The OECD cut its global growth forecast and BHP Billiton Ltd. Said on June 3 that ample supplies of commodities will persist

Chicago wheat futures jumped 8.4% in the week as adverse crop weather in North America and Europe encouraged investors to continue covering short positions

The ICE coffee futures climbed 7.1% in the week, their biggest gain since mid-March, led by heavy short-covering and in response to Neumann Kaffee Gruppe's Brazil crop forecast, which was at the low end of other estimates

Malaysian palm oil futures gained 6.9% in the week as the Malaysian ringgit weakened, making the local currency denominated palm oil feedstock cheaper for overseas buyers


Gold spot 1,172.00 -18.55 -1.56 -1.09

Silver spot 16.02 -0.72 -4.33 2.05

Copper-CMX 269.25 -3.55 -1.30 -4.71

Brent - ICE 63.31 -2.25 -3.43 1.95

WTI - Nymex 59.13 -1.17 -1.94 5.10

S&P GSCI Spot Index

432.88 -6.21 -1.41 3.53

Baltic Dry Index 610.00 21.00 3.57 -21.99

WTI Crude – 1 year performance GOLD – 1 year performance


COMMODITIES


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US government bonds suffered heavy sell-off and 10-year yield surged 28.6 bps in the week to 2.4% as a solid monthly jobs report and wage inflation bolstered the Fed’s case to raise interest rates sometime this year, a shift investors say would shrink the value of outstanding bonds

The European Central Bank maintained the benchmark rate at 0.05% as data signaled that the risk of deflation in the euro area is waning. The deposit rate and the marginal lending rate stayed at minus 0.2% & 0.3%, respectively

German bunds suffered their worst week since 1998 as 10-year yield climbed 36 bps to 0.84% on signs inflation is picking up and as European Central Bank President Mario Draghi told investors to get used to higher volatility

The Bank of England kept its main interest rate and the size of bond portfolio unchanged at 0.5% & £375bn, respectively as data showed consumer prices in UK fell 0.1% YoY in Apr for the 1st time in more than half a century

The Reserve Bank of India (RBI) cut the repo rate by 25 bps to 7.25%, taking advantage of subdued inflation to lend more support to an economy that the RBI says is not doing as well as latest impressive growth numbers suggest

Brazil’s central bank raised its benchmark Selic rate to 13.75% from 13.25% as inflation remained resilient despite strong signs of recession in Latin America’s largest economy, a condition often referred to as stagflation

The Banco de Mexico left its key interest rate as per expectations at 3.00%, pointing to sluggish economic growth while noting that inflation pressures remained muted following a deep slump in the peso


USD-1w Libor 0.15 -0.0030 -2.00 9.07

USD-3m Libor 0.28 -0.0049 -1.71 9.12

USD-6m Libor 0.42 -0.0028 -0.66 16.28

USD-10yr 2.41 0.2862 13.49 10.89

AED-1m EIBOR 0.41 0.0000 0.00 3.62

AED-3m EIBOR 0.74 0.0000 0.00 9.07

AED-12m EIBOR 1.07 0.0000 0.00 5.06

UK-10yr 2.08 0.2660 14.67 18.39

Japan-10yr 0.49 0.0970 25.00 50.62

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 Greece -4.76% -3.65%

2 Russia -4.76% -4.76%

3 India -3.81% -3.70%

4 Taiwan -3.72% -4.47%

5 Poland -2.96% -2.98%

6 Netherlands -2.87% -1.74%

7 Italy -2.76% -1.63%

8 Ireland -2.74% -1.61%

9 UK -2.57% -2.71%

10 Sweden -2.34% -0.73%

Ref Country Weekly Change Weekly Change

(USD Adj.)

1 Venezuela 13.74% 13.74%

2 China 8.92% 8.83%

3 Mongolia 5.04% 6.83%

4 Argentina 3.84% 3.58%

5 Kazakhstan 3.04% 3.04%

6 Pakistan 2.89% 3.00%

7 Malta 2.88% 4.08%

8 Qatar 1.60% 1.58%

9 Abu Dhabi−UAE 1.56% 1.56%

10 Bulgaria 1.53% 2.64%

WEEKLY

Ref Country YTD Change YTD Change (USD Adj.)

1 Venezuela 226.94% 226.94%

2 China 55.29% 55.36%

3 Hungary 34.22% 25.15%

4 Denmark 31.37% 20.46%

5 Argentina 30.73% 22.77%

6 Jamaica 28.47% 26.73%

7 Portugal 20.95% 11.12%

8 Italy 20.17% 10.40%

9 Malta 19.80% 10.05%

10 Austria 17.80% 8.22%

YTD

Ref Country YTD Change YTD Change (USD Adj.)

1 Colombia -12.73% -20.94%

2 Mongolia -9.79% -9.12%

3 Cyprus -6.42% -14.03%

4 Bulgaria -6.09% -13.74%

5 Mauritius -4.96% -14.46%

6 Zambia -4.93% -16.19%

7 Greece -4.85% -12.59%

8 Turkey -4.41% -16.11%

9 Kazakhstan -4.41% -6.28%

10 Bahrain -4.17% -4.18%

EQUITY MARKETS - TOP MOST & BOTTOM MOST


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Ref Commodity Weekly Change

1 Gasoil -4.43%

2 Heat Oil -4.38%

3 Silver -4.33%

4 Brent Crude -3.43%

5 Palladium -3.10%

6 Gasoline -2.68%

7 Zinc -2.65%

8 Lean Hogs -2.56%

9 Lead -2.49%

10 Natural Gas -1.97%

Ref Commodity Weekly Change

1 Wheat 8.39%

2 Coffee 7.09%

3 Palm Oil 6.91%

4 Lumber 6.24%

5 Nickel 4.40%

6 Soybean Oil 4.35%

7 Rough Rice 3.10%

8 Corn 2.56%

9 Orange Juice 2.14%

10 Steel Rebar 1.88%

WEEKLY

Ref Commodity YTD Pct Change

1 Gasoline 41.43%

2 Rubber 15.66%

3 Gasoil 10.64%

4 Soybean Oil 8.79%

5 Cocoa 7.08%

6 Cotton 6.21%

7 WTI Crude 5.10%

8 Lead 2.34%

9 Silver 2.05%

10 Brent Crude 1.95%

YTD

Ref Commodity YTD Pct Change

1 Tin -21.13%

2 Steel Rebar -19.03%

3 Coffee -18.91%

4 Sugar -17.01%

5 Orange Juice -16.67%

6 Bean Meal -16.37%

7 Rough Rice -14.66%

8 Natural Gas -14.58%

9 Nickel -13.04%

10 Wheat -12.34%

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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