Weekly Market Review January 17, 2016 – January 23, 2016

January 24, 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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US consumer prices unexpectedly inched down 0.1% in Dec after being flat in Nov as costs of energy, food dipped

Housing starts declined 2.5% as groundbreaking on both single and multi-family projects fell

Conference Board’s leading economic index slipped 0.2% in Dec after climbing by a revised 0.5% in Nov

The IMF cut its global growth forecast for a 3rd time in less than a year to 3.4% in 2016 from 3.6% on slowing China

International Energy Agency cut 2016 global oil demand estimate as China slows and supplies outside OPEC rises

Markit’s Eurozone composite PMI fell to 53.5 in Jan from 54.3 in Dec, weighed down by slowing emerging markets

Inflation in the Eurozone rose to 0.2% in Dec from 0.1% in Nov. Core inflation held steady at 0.9% in Dec

Eurozone house prices firmed for a 3rd consecutive quarter by 1.0% QoQ in 3Q2015, after climbing 1.8% in 2Q2015

ZEW German Economic Sentiment index slid to 10.2 in Jan from 16.1 in Dec on concerns related to China slowdown

Markit’s flash composite PMI for France firmed marginally to 50.5 in Jan as compared to 50.1 in Dec

UK house prices inched up for the first time in 3 months, rising 0.5% MoM in Jan after declining 1.1% in Dec

Retail sales declined more than expected by 1.0% in Dec in contrast to a growth of 1.3% recorded in Nov

S&P raised Greece’s rating to ‘B minus’ from ‘CCC plus’ with a Stable outlook after banks’ recapitalization, reforms

Turkey’s consumer confidence index weakened for a 2nd straight month in Jan to 71.6 from 73.6 in Dec

Japan’s all industry activity index fell to a seasonally adjusted 1.0% MoM in Nov after increasing 0.9% in Oct

Nikkei Japan’s manufacturing PMI remained in expansion zone in Jan, coming in at 52.4 vs. 52.6 in Dec

China’s economy grew 6.8% YoY in 4Q2015. 2015 GDP growth eased to 25-year low of 6.9% from 7.3% in 2014

Foreign direct investment (FDI) declined 5.8% YoY to $12.23bn in Dec

India’s exports declined for a 13th consecutive month in December by 14.75% YoY. Imports dropped by 3.88%

Brazil’s inflation in the month through mid-Jan decelerated to 0.92% from 1.18% a month earlier, as per forecasts

Malaysia’ leading index, measuring the future economic activity, ticked up to 118.5 in Nov from 118.4 in Oct

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 1,906.90 1.41 -6.70 15.64 2.31

DJI 16,093.51 0.66 -7.64 14.36 2.77

Nasdaq Comp 4,591.18 2.29 -8.31 18.98 1.37

Euro Stoxx 600 338.36 2.58 -7.50 14.43 3.70

FTSE 100 5,900.01 1.65 -5.48 14.85 4.49

Dax 9,764.88 2.30 -9.10 12.01 3.04

CAC 40 4,336.69 3.01 -6.48 13.65 3.45

Nikkei 225 16,958.53 -1.10 -10.90 16.50 1.89

Hang Seng 19,080.51 -2.26 -12.93 9.38 4.54

Brazil - Bovespa

38,031.22 -1.39 -12.27 9.55 5.13

Russia - Micex 1,717.98 6.82 -2.46 5.37 4.88

BSE Sensex 24,435.66 -0.08 0.00 16.97 1.51

Shanghai Comp 2,916.56 0.54 -17.59 11.80 2.11

Source: Bloomberg, Mashreq Private Banking

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Emirates NBD’s FY2015 net profit increased 38.6% YoY to AED7.1bn; BoD recommends 40.0% cash dividend

ADNOC signed a $2.1 loan deal with Japan Bank for International Cooperation to secure long-term oil supplies

Masdar mulls investing $300mn in Jordan to build a solar power plant; more investments planned across MENA

National Bank of Ras Al Khaimah said it will cut up to 250 expatriate jobs as the lender adjusts to slowing growth

National Bank of Fujairah’s FY2015 net profit grew 10.5% YoY to AED558.8mn; BoD proposes 7.5% dividend, bonus

Aramex acquired Fastway Couriers’ New Zealand and Australia business for $80.6mn

Ajman Bank’s net income surged 71.0% YoY to AED122.1mn in FY2015; BoD proposes AED500mn capital increase

Saudi Basic Industries Corporation’s (SABIC) net profit plummeted 29.4% YOY to SAR3.08bn in 4Q2015

Saudi Telecom Co. posted a 20.2% YoY drop in 4Q2015 net profit to SAR1.95bn despite a 12.0% YoY rise in revenues

ACWA Power & South Korea’s Taekwang Power-led consortium inked $2.2bn Vietnam thermal power plant deal

National Shipping Co. of Saudi Arabia’s 4Q2015 net profit zoomed to SAR566.9mn from SAR123.4mn in 4Q2014

Savola Group’s 4Q2015 bottom-line jumped 18.6% YoY to SAR515.3mn, BoD proposes 5% dividend (SAR0.5/share)

Almarai Company’s net income rose 13% YoY to SAR483.7mn. Sales reached SAR3.6bn from SAR3.3bn in 4Q2015

Samba Financial Group’s net profit in 4Q2015 remained almost flat YoY at SAR1.23bn

Boubyan Bank received approval from Kuwaiti central bank to issue a capital-boosting Sukuk worth $250mn

Salalah Mills posted a marginal decline in FY2015 net profit to OMR5.51mn from OMR5.56mn in FY2014

Barwa Real Estate Co. signed a $157.1mn Shari’ah-complaint loan to refinance an existing Islamic financial liability

Qatar Insurance’s 4Q2015 net profit surged 57.8% YoY to QAR350.4mn; BoD proposes 25% dividend, 10% bonus

Qatar National Cement’s net profit climbed 18.4% YoY to QAR104.6mn in 4Q2015, sales rose 16.1% YoY

Bahrain Bourse would list and trade government treasury bills as sliding oil prices put state finances under pressure

Bahrain Telecommunications Company (Batelco) received non-binding offers to buy its Jordanian unit Umniah

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

Dubai 2,621.96 -6.87 -16.79 8.33 4.48

Abu Dhabi 3,736.95 -5.52 -13.24 8.12 6.13

Saudi Tadawul 5,463.60 -6.42 -20.95 9.90 4.65

Qatar Index 8,584.01 -6.54 -17.69 9.44 5.94

Kuwait Index 4,946.33 -6.07 -11.91 – 5.17

Oman MSM 30 4,867.00 -4.80 -9.97 8.53 5.37

Bahrain All Share

1,165.49 -2.95 -4.15 6.97 5.90

Egypt EGX 30 5,713.35 -2.46 -18.45 4.34 2.48

Istanbul 100 Index

70,243.91 -1.15 -2.07 7.97 3.55

Source: Bloomberg, Mashreq Private Banking; *Current

DFMGI – 1 year performance Saudi Tadawul – 1 year performance

GCC EQUITIES

Source: Bloomberg, Mashreq Private Banking

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US dollar strengthened 1.1% against euro during the past five days after the European Central Bank President Mario Draghi hinted that more easing could be delivered as early as Mar 2016

Canadian dollar appreciated 2.9% with respect to US dollar in the week ended Jan 22 on the back of a rally in crude oil prices and an above expected increase in domestic retail sales in Nov 2015

Brazilian real weakened 1.1% against US dollar in the week after the central bank left unchanged its benchmark interest rate on Jan 20 and amid forecasts of a significant slowdown in the Chinese economy

Russian ruble ended cheaper by 0.5% against US dollar during the week as oil prices remained under pressure on oversupply concerns as well as concerns related to China’s economic slowdown

Indian rupee depreciated marginally against US dollar after it fell below the 68-mark earlier this week, hit by global economic woes and sustained demand for the American currency from importers and banks amid fall in equities

Malaysian ringgit appreciated 2.36% from Jan 15 to 4.2928 per US dollar as a rebound in Brent crude boosted sentiment following a global selloff in stocks due to slowing growth in China

Offshore yuan gained marginally for a second week to 6.6136 per US dollar after Chinese authorities stepped up their defense of the currency amid capital outflows and a slowing economy

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

USD Index 99.5740 0.62 1.25 0.96 5.08

EUR/USD 1.0796 -1.10 -1.06 -0.61 -3.64

GBP/USD 1.4265 0.05 -4.08 -3.20 -4.83

USD/JPY 118.7800 1.54 -1.77 -1.20 0.86

USD/CHF 1.0161 1.49 2.56 1.40 15.45

USD/CAD 1.4119 -2.90 1.95 2.02 13.68

USD/BRL 4.0938 1.11 3.87 3.36 58.66

USD/RUB 78.1145 0.53 12.00 7.71 22.62

USD/INR 67.6300 0.04 2.14 2.23 10.08

USD/CNY 6.5788 -0.09 1.56 1.31 5.62

USD/AUD 1.4281 -2.00 3.31 4.07 12.97

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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Brent & US West Texas Intermediate (WTI) crude futures climbed 11.2% & 9.4% this week, respectively as the prospect of stimulus by the major central bank’s worldwide and an upcoming snowstorm in the US boosted expectations for fuel demand

Gold prices edged up 0.8% during the week ended Jan 22 as turmoil in the global stock markets boosted the metal’s safe haven appeal while investors expect no surprises from the upcoming Fed monetary policy meeting

Malaysian Derivatives Exchange (MDE) palm oil futures climbed 8.3% during the past five days, supported by expectations of lower output and as traders covered their short positions ahead of a long holiday weekend

Chicago Board of Trade (CBoT) corn futures firmed 3.4% from Jan 15, supported by some fresh global supply concerns and stronger-than-expected US export data

CBoT soybean oil futures gained ~2.8% this week on higher crude oil prices. Higher prices for crude can lead to increasing oilseed demand as refiners seek to blend more soybean-based biodiesel into the diesel supply

London Metals Exchange (LME) copper futures rose ~2.6% over the week, buoyed by a pick-up in Chinese demand and after the European Central Bank injected some calm into broader markets by hinting at further policy easing

ICE orange juice futures declined 6.6% in the week after the US Department of Agriculture predicted that domestic orange-juice demand will slump to the lowest in at least 30 years, as consumers shift to a wider array of beverages

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

Brent – ICE 32.18 11.20 -13.87 -13.68 -34.04

WTI – Nymex 32.19 9.42 -14.16 -13.09 -29.39

Gold Spot 1,098.00 0.84 2.57 3.45 -15.15

Silver Spot 14.02 0.68 -2.07 1.17 -23.42

Copper - CMX 200.25 3.04 -5.16 -6.21 -19.95

S&P GSCI Spot Index

290.20 3.95 -6.91 -6.88 -23.58

Baltic Dry Index 354.00 -5.09 -25.47 -25.94 -50.83

WTI Crude – 1 year performance GOLD – 1 year performance

Source: Bloomberg, Mashreq Private Banking

COMMODITIES

Source: Bloomberg, Mashreq Private Banking

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The US 10-year treasury yield improved 1.7 basis points (bps) in the week as a rebound in global equities following rising oil prices led investors to sell US treasuries in favor of riskier assets like stocks

The European Central Bank (ECB) kept the main refinancing rate unchanged at 0.05% on Jan 21. ECB President Mario Draghi said the policy rates are expected to remain at present or lower levels for an extended period of time

The Bank of Canada held the key rate at 0.5% on Jan 20 after considering expectations for future government stimulus spending and the risks associated with the recent plunge in the value of the Canadian dollar

Brazil’s central bank maintained its benchmark Selic rate at 14.25% on Jan 20, backtracking from previous signals that it was ready to boost borrowing costs after being pressured to avoid harming an economy mired in its worst recession in decades

Turkey’s central bank kept the benchmark one-week repo rate at 7.5% on Jan 19, delaying a long-promised policy shift for a second consecutive month as the lira flirts with record lows and runaway inflation expectations cloud the economic outlook

Malaysia’s central bank maintained the key overnight policy rate at 3.25% on Jan 21 as policymakers observed that the current stance is accommodative and supportive to economic activity

The Central Bank of Kenya left its main interest rate unchanged at 11.5% on Jan 20 for the fourth consecutive meeting as declining oil prices herald decreasing inflation rates from a 17-month high

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

USD-10yr 2.05 0.85 -8.22 -9.58 10.13

USD-2yr 0.87 2.25 -10.67 -17.05 67.97

Fed Funds Rate 0.37 2.78 2.78 85.00 208.33

USD-3m Libor 0.62 -0.16 4.08 0.96 141.55

USD-6m Libor 0.86 1.02 4.67 1.37 140.00

German-10yr 0.48 -10.37 -19.60 -23.05 8.28

UK-10yr 1.71 2.95 -8.75 -12.70 12.79

Japan-10yr 0.23 8.41 -14.07 -10.77 -25.16

AED-3m EIBOR 1.06 -0.15 2.06 0.14 55.99

AED-6m EIBOR 1.28 1.63 6.72 4.76 51.50

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 Dubai–UAE -6.87% -6.87%

2 Qatar -6.54% -6.55%

3 Saudi Arabia -6.42% -6.53%

4 Kuwait -6.07% -6.27%

5 Abu Dhabi–UAE -5.52% -5.52%

6 Oman -4.80% -4.81%

7 Greece -4.32% -5.37%

8 Serbia -4.13% -5.08%

9 Vietnam -3.83% -3.74%

10 Kenya -3.80% -3.73%

Ref Country Weekly Change Weekly Change

(USD Adj.)

1 Russia 5.88% 5.88%

2 Colombia 4.38% 4.16%

3 Sweden 4.30% 4.27%

4 Netherelands 3.89% 2.75%

5 Norway 3.58% 4.73%

6 Denmark 3.50% 2.40%

7 Finland 3.18% 2.05%

8 Argentina 3.09% 0.81%

9 France 3.01% 1.87%

10 Canada 2.62% 5.69%

WEEKLY

Ref Country YTD Change YTD Change (USD Adj.)

1 Tunisia 4.13% 3.27%

2 Jamaica 3.99% 2.94%

3 Slovakia 3.72% 3.09%

4 Malta 2.03% 1.41%

5 Laos 0.69% 0.62%

6 Ghana 0.26% -0.12%

7

8

9

10

YTD

Ref Country YTD Change YTD Change (USD Adj.)

1 Saudi Arabia -20.95% -20.94%

2 Egypt -18.45% -18.42%

3 Qatar -17.69% -17.69%

4 China -17.59% -18.66%

5 Nigeria -16.81% -16.67%

6 Dubai–UAE -16.79% -16.79%

7 Greece -15.37% -15.88%

8 Abu Dhabi–UAE -13.24% -13.24%

9 Hong Kong -12.93% -13.45%

10 Brazil -12.27% -15.12%

EQUITY MARKETS - TOP MOST & BOTTOM MOST

Source: Bloomberg, Mashreq Private Banking

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Ref Commodity Weekly Change

1 Lumber -8.08%

2 Orange Juice -6.60%

3 Sugar -3.09%

4 Soybeans -2.18%

5 Natural Gas -0.86%

6 Bean Meal -0.44%

7

8

9

10

Ref Commodity Weekly Change

1 Brent Crude 11.20%

2 WTI Crude 9.42%

3 Palm Oil 8.27%

4 Ethanol 5.13%

5 Rubber 4.06%

6 Nickel 3.63%

7 Corn 3.42%

8 Copper 3.04%

9 Tin 2.93%

10 Soybean Oil 2.76%

WEEKLY

Ref Commodity YTD Pct Change

1 Lean Hogs 5.35%

2 Gold 3.45%

3 Corn 3.21%

4 Rubber 2.65%

5 Bean Meal 1.59%

6 Silver 1.17%

7 Wheat 1.17%

8 Soybeans 0.60%

9

10

YTD

Ref Commodity YTD Pct Change

1 Gasoline -14.47%

2 Brent Crude -13.68%

3 Orange Juice -13.11%

4 WTI Crude -13.09%

5 Gasoil -12.95%

6 Palladium -11.69%

7 Cocoa -10.56%

8 Heat Oil -9.54%

9 Lumber -9.01%

10 Lead -8.62%

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.