monthly insights - emirates nbd · head of research & 3 +971 4 230 7800...

Monthly 15 July 2015

Monthly Insights

With fears about Greece exiting the Euro having abated the focus of global

markets is likely to return to the US Fed in the second half of the year.

However the year has already shown that recovery and growth cannot be

taken for granted, with a number of shocks seen in the US, Europe, the Middle

East and in Asia. The next edition of Monthly Insights will be in September.

Global macro: Throughout this year markets have demonstrated a tendency for

wishful thinking and complacency over two of the main issues facing them. In

relation both to Greece and the timing of the US Fed’s interest rate ‘lift-off’ the

markets have taken a relatively sanguine view of both, accepting at face value

the numerous promises of policymakers.

GCC macro: Higher oil production in the GCC in H1 2015 should help to offset

slower non-oil sector growth, which is evident in the PMI surveys. However, the

impact of lower oil prices on regional budgets is becoming apparent, and there is

increased talk about subsidy reform in the GCC.

MENA macro: Recently released Q1 GDP data for several MENA economies

reflects a region that is still struggling to recover after four years of weak growth.

Fixed Income: Sovereign and corporate bonds had a month of round trip with

substantial intra-month volatility, attributed to Greece debt and China equities, but

ultimately finishing the month in close proximity to their opening levels.

Currencies: Along with other financial markets the FX market breathed a sigh of

relief as an agreement between Greece and its creditors reached a conclusion this

week. The EUR which had risen in anticipation of a deal fell back and the USD

strengthened across the board.

Equities: It was a month of two halves for global equities as the situation in Greece

and China evolved positively towards the latter part of the month after a tough start.

With Greece seemingly out of picture for the short term at least, investors will turn

their focus back to the ongoing earnings season and the monetary policy guidance in

the US.

Commodities: Commodity prices have started H2 on a far more volatile footing

thanks to a readjustment in risk appetite and new concerns about global oil market

balances.

All eyes on the Fed in the second half of the year

Source: Bloomberg, Emirates NBD Research

0

1

2

3

4

5

6

7

Jun-00 Jun-02 Jun-04 Jun-06 Jun-08 Jun-10 Jun-12 Jun-14

Fed Funds Target Rate

Tim Fox

Head of Research &

Chief Economist

+971 4 230 7800

[email protected]

www.emiratesnbdresearch.com

mailto:[email protected]

Content

Global Macro ......................................................................................................... Page 3

GCC Macro ............................................................................................................ Page 5

Non-GCC Macro ................................................................................................... Page 6

Fixed Income ....................................................................................................... Page 8

Currencies .......................................................................................................... Page 10

Equities .............................................................................................................. Page 12

Commodities ...................................................................................................... Page 14

Key Data & Forecast Tables .............................................................................. Page 16

Global Macro

Throughout this year markets have demonstrated a

tendency for wishful thinking and complacency over two

of the main issues facing them. In relation both to Greece

and the timing of the US Fed’s interest rate ‘lift-off’ the

markets have taken a relatively sanguine view of both,

accepting at face value the numerous promises of

policymakers that a debt deal over Greece would be

secured and that the Fed will approach monetary policy

normalization ‘gradually’.

While a Greek debt deal does appear to have been finally reached

after five months of tortuous negotiations, the end result still leaves

a lot of questions unresolved. In terms of the Fed, half a year spent

seemingly preparing the markets for rate normalization and the

markets are still not much the wiser about when it will actually

start.

Greek deal leaves a lot to be desired

We warned a month ago about critical event risk for Greece

looming at the end of June, with this situation only now coming to

some form of an end in the middle of July. The deal keeping

Greece in the Euro is an onerous one, with the Greek government

capitulating on a range of tax rises and structural reforms that had

previously been non-negotiable. In return it will get a EUR86bn

financing deal that should cover it for the next three-years. As part

of the deal EUR50bn of Greek assets are to be held in a fund in

Athens, some of which will go towards bank recapitalization. For

the deal to be effective it has to be approved quickly by national

parliaments, with the Greek parliament having until the end of

today to pass most of the measures. However, as the IMF has

pointed out without debt relief the whole issue of debt sustainability

has not been properly addressed, and alongside the burden of

austerity that will be implemented in order to meet challenging

primary surplus targets, it is hard to imagine how the economy will

be able to properly recover. Thus the risk remains that the crisis

will return again in the future.

Needless to say, the episode which has played out over almost six

months now has again cast a pall over the Eurozone and over

confidence in its crisis management. This in turn creates

uncertainty about future growth prospects and about what will

happen if a similar crisis arises in the future, which seems quite

possible.

Chinese equities another dimension of risk

The sell-off in Chinese equity markets has added another

dimension to global uncertainty, creating question-marks about the

viability of China meeting its 7.0% growth target this year, even

after growth was maintained at this rate in Q2. Beyond this local

aspect China’s significance for global markets reflects its status as

the second largest economy in the world, with the second largest

equity market and as one of the largest global commodity players.

So a hard landing would also be likely to weigh on rest of the

world. By extension it will also weigh on other financial markets,

and on policymakers’ reaction functions.

Chinese equities unravel


IMF lowers 2015 growth forecast

The IMF lowered its global growth forecast for the year to 3.3%

from 3.5%, not in reaction to either of these events, but largely

because of the weaker growth outturn in the US in Q1 this year.

The Chinese events were probably too recent to be taken into

account, although concerns were expressed about EM economies

generally and about China’s transition from an investment and

export based growth model to a consumption-led one. The IMF

was actually reasonably confident about the outlook for the

Eurozone, seeing limited contagion from recent developments. In

any case the IMF was already advocating that central banks of

developed countries keep monetary policy loose for longer, having

previously recommended that the Fed hold off from raising interest

rates until 2016.

Fed still talking about H2 tightening

For the time being at least it does not appear that this advice is

going to be heeded. Janet Yellen recently repeated the likelihood

of the Fed raising interest rates in the second half of the year, even

against a backdrop of tension in Greece and in China. Our sense

remains that September will be the starting point for Fed

normalization, but the markets still appear to need more

convincing that it will even begin this year.

The latest US jobs data was clearly mixed, with weaker than

expected non-farm payroll job gains of 223,000 offset by a bigger

than expected fall in the unemployment rate to 5.3%. There were

also other signs that labour force slack was being used up, with

those working part-time for economic reasons declining sharply

and the number of long term unemployed falling significantly too.

Despite this, labour force participation also fell to its lowest point in

this cycle at 62.6% and hourly earnings were steady on the month

and slowed to 2.0% y/y. Superficially the weaker than expected

June payroll increase might argue for holding interest rates steady,

while the unemployment rate nearing NAIRU is ammunition for a

hike soon. Now that unemployment lies at 5.3% within the in the

1000

1500

2000

2500

3000

3500

4000

4500

5000

5500

Jun-14 Sep-14 Dec-14 Mar-15 Jun-15

China Shanghai Composite Index

middle of the FOMC’s central tendency forecast for Q4 of this year,

the case can be made that wage pressures are just around the

corner. However, there are still two more payroll reports to be seen

before the September FOMC meeting, leaving it with time to make

up its mind.

US employment remains firm


Markets remain too sanguine about the Fed

All along, however, we suspect that the markets have been too

sanguine about US tightening risks, taking at face value dovish

Fed rhetoric earlier this year. After the June FOMC meeting the

markets reacted to the Fed’s message as if they do not believe

that the Fed will raise interest rates at at all this year, with the bond

yields easing and Fed funds futures lower than the projections

implied in the FOMC’s dots; even more so in 2016 and 2017 where

the futures market sees a much slower pace of Fed tightening

even after the Fed had already lowered its own ‘gradualist’

forecasts for where rates will end up.

Even as Janet Yellen becomes more vocal that the Fed will not sit

on the sidelines in the second half of the year, the markets

continue to doubt whether a rate hike will actually be seen. To us,

on the other hand, the risks are that rates may have to rise a lot

further and faster than even the dot plot implies. In fact it seems as

if the markets will not believe the Fed is prepared to pull the trigger

on tightening until it finally does. In some ways, by encouraging a

belief in its ‘gradualism’ the Fed might be doing too good a job of

reducing the chances of another ‘taper tantrum’. In its effort to

prevent another bond market sell-off the Fed has promoted such a

soporific environment in markets that an eventual rate rise, when it

comes, will surely be a shock.

Tim Fox +9714 230 7800

5.2

6.2

7.2

8.2

0

100

200

300

400

500

Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15change in non-farm payrolls (000s, lhs)unemployment rate (%, rhs)

GCC Macro

Higher oil production in the GCC in H1 2015 should help to offset slower non-oil sector growth, which is evident in the PMI surveys. However, the impact of lower oil prices on regional budgets is becoming apparent, and there is increased talk about subsidy reform in the GCC.

Oil production from GCC OPEC members (Saudi Arabia, UAE,

Kuwait and Qatar) surged to 16.75mn bpd in June according to

Bloomberg estimates, the highest level on record and against a

backdrop of sharply lower oil prices. The rise in GCC output was

largely due to Saudi Arabia, where production increased 4.6% q/q

in Q2 2015 to reach 10.45mn bpd in June. The UAE increased

production by a similar magnitude last quarter, while Kuwait and

Qatar saw output decline by -1.4% q/q and -1.5% q/q respectively.

GCC oil production and OPEC oil price


Higher oil production should help to offset slower growth in the

non-oil sectors, which is evident in the Purchasing Managers’

Indices for the two largest economies, Saudi Arabia and the UAE.

Higher oil export volumes should also mitigate some of the impact

of lower oil prices on GCC budget revenues, albeit only slightly.

There is evidence of fiscal strain across most GCC states, with

declining net foreign assets in Saudi Arabia and Bahrain, and

sharply lower budget revenues in Q1 2015 in Oman and Kuwait.

The larger economies such as Saudi Arabia and the UAE have

substantial accumulated reserves to help cushion the impact of

lower oil prices, and can maintain relatively expansionary fiscal

policies in the near-term. Kuwait is expected to record a deficit for

the first time in over decade, but again, substantial reserves mean

that spending can be maintained. Oman and Bahrain are

expected to run the largest fiscal deficits in the GCC this year, and

while we are confident that the budgets can be financed, these

countries are facing the most pressure to rationalise spending.

Calls to reduce subsidies and raise non-oil revenues have been

made by various stakeholders across the GCC in recent months,

even in those countries where the fiscal buffers are substantial.

Kuwait, Oman and Abu Dhabi have reduced some subsidies on

fuel and utilities, and the UAE Ministry of Energy is likely to

recommend further reductions in fuel (petrol) subsidies in the UAE

going forward. Bahrain has mulled cutting food and other subsides

and replacing these with cash handouts to nationals, while Oman

has proposed imposing taxes on expatriate remittances and raised

natural gas prices in a bid to save money.

Higher energy and fuel prices would have contributed to overall

housing inflation as measured by the CPI. In both the UAE and

Kuwait, housing has been a key contributor to overall consumer

inflation, with housing costs rising 9.4% y/y in the UAE and 6.4%

y/y in Kuwait, according to the official CPI. In contrast, the housing

component of CPI rose 2.3% y/y in Qatar, 3.1% y/y in Saudi Arabia

and just 0.1% y/y in Oman in May.

The strong USD and low food prices have helped to offset housing

inflation in most countries, and headline inflation has declined in

Oman and Qatar while remaining relatively low in Saudi Arabia

and Bahrain (despite housing inflation of 7.7% y/y in Bahrain). The

UAE and Kuwait are the only countries in the GCC with annual

inflation currently in excess of 3.0%. We expect the UAE’s

inflation to slow in H2 2015, as lower housing costs start to feed

through to the official index.

GCC inflation

Source: Bloomberg, Haver Analytics, Emirates NBD Research

Khatija Haque +971 4 230 7803

30

50

70

90

110

15.0

15.5

16.0

16.5

17.0

Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15

USD

mn b

pd

GCC OPEC oil price (rhs)

-1

0

1

2

3

4

5

6


% y

/y

Qatar UAE KSA

Bahrain Oman Kuwait

Non-GCC Macro

Recently released Q1 GDP data for several MENA economies

reflects a region that is still struggling to recover after four

years of weak growth. Although we were optimistic that 2015

would see business activity in the Middle East’s net oil

importers accelerate, official national accounts figures for the

January-March period suggest that consumption, investment

and trade patterns are still depressed. There is a degree of

divergence across the region, however there is not yet a

single economy that has been able to sustain growth rates

above its pre-2011 average.

First quarter GDP data for Jordan was particularly disappointing,

with growth slowing to its weakest pace since Q2 2010. Real GDP

expanded only 1.9% y/y, down from 3.3% in Q4 2014. The

performance of the construction sector, which had previously been

outperforming as a result of stronger demand for housing,

surprised to the downside between January-March, with the

industry contracting 3.4% y/y. Less surprising was the 6.0% y/y fall

of output in the Restaurants and Hotels sector (the second

consecutive quarter of decline), which confirms the difficulties the

tourism industry is facing as a result of the ongoing civil wars in

neighboring Iraq and Syria.

Real GDP Growth

Source: Haver Analytics, Emirates NBD Research

Growth in Tunisia’s economy was even weaker in Q1, at only

1.7%. This was the slowest pace of expansion since the fourth

quarter of 2011. Workers’ strike action at a phosphate mine earlier

in the year might have had some impact on headline GDP,

although we would note that mining sector output has been

declining since the start of H2 2014. While we had previously

downgraded our 2015 full-year growth forecast following the attack

on foreign tourists in Tunis in March, at this stage our projection of

2.2% GDP growth seems overly optimistic following the latest

attack on British holidaymakers in Sousse. Tunisia’s own Ministry

of Finance is expecting the economy to expand a meagre 1.0%

this year, which would be the weakest pace since 2011.

The Egyptian economy expanded 3.0% in Q1, bringing average

growth through the first three quarters of its fiscal year to 4.7% y/y.

On a nine-month running basis, this has been the fastest pace of

expansion since prior to the 2011 revolution, however it does

appear that momentum slowed in H1 compared to the second half

of 2014. We do not yet have a full breakdown of GDP by

expenditure, although we expect that the same trends which were

in play at the end of 2014 continued into the early stages of 2015.

In particular, fixed investment likely outperformed, as greater

clarity on the political outlook has helped re-start projects that had

previously been put on hold.

Real GDP Growth

Source: Markit, Emirates NBD Research

Morocco is the only MENA economy to have already released Q2

GDP data, and the figures confirm our view that the country is a

relative outperformer. In Q2, growth came in at 4.3% y/y, up

slightly on the 4.1% rate posted in the first quarter of the year. The

economy continues to benefit from a record agricultural harvest, as

favorable rains have helped boost the cereal crop this year. While

we remain optimistic on the medium-term outlook, we would also

stress that such fortunate weather patterns are unlikely to repeat

themselves, which means headline GDP could slow in 2016.

Moreover, even though real GDP growth averaged 4.2% y/y in H2,

which is the strongest in the region, our 5.0% full-year forecast will

likely be revised down in the weeks ahead.

Lebanon does not release quarterly GDP statistics, however there

is no indication that domestic demand conditions have improved

this year. The central bank releases an economic coincident

indicator which is meant to correlate with GDP growth, and this

shows growth of only 2.4% y/y (3mmavg) through the first four

months of 2015. Other data is similarly weak, if not worse, with

figures on trade and investment showing a particularly sharp fall in

recent months. Since 2011 real GDP growth has averaged roughly

2.0% y/y, and we expect this situation to continue so long as the

domestic and regional political environments remain unchanged.

-4

-2

0

2

4

6

8

10

Q111 Q411 Q312 Q213 Q114 Q414

Egypt (5.6%, 2.6%)

Morocco (4.2%, 2%)

% y

/y

Figures refer to avg growth rates (pre-2011, post-2011)

-4

-2

0

2

4

6

8

10

Q111 Q411 Q312 Q213 Q114 Q414

Tunisia (4.2%, 1.7%)

Jordan (5.8%, 2.7%)

% y

/y

Figures refer to avg growth rates (pre-2011, post-2011)

Causes of the slowdown

There are several reasons why the economic performance of

MENA’s net oil importers has not met expectations. First, although

it has improved relative to last year, the political backdrop in the

region remains volatile, and spillovers from Syria, Iraq and Libya

are likely to continue through the remainder of this year. Elevated

security risk not only depresses domestic demand, but also

undermines hopes of a revival in tourism. Second, although there

have been high-profile announcements of large investment

projects (particularly in Egypt), actual project execution has been

slow. Finally, growth in external demand has also been sluggish,

as momentum has slowed in the GCC alongside the drop in global

oil prices, and hopes for a strong pick-up in activity in the

Eurozone have also failed to materialize.

Lebanon Coincident Indicator


Reforms delayed

The main implication from this weaker-than-expected economic

growth performance relates to the outlook for reform momentum.

In an environment of slow job creation, it is less likely that

governments across the region are willing to push ahead with

potentially unpopular policies, and we would not be surprised if

efforts at reining in budget deficits begin to wane this year. In the

first half of 2015 we have already seen authorities in Tunisia agree

to further hikes in public sector wages, while their ability to focus

on necessary banking sector recapitalization has also been

diminished as a result of the aforementioned attacks on tourists. In

addition, although Egypt’s draft FY2015/16 budget sees a fiscal

shortfall of less than 9% of GDP, the recent backsliding on capital

gains taxes and potential delays to further energy subsidy reforms

do not augur well for this ambitious target.

Central Bank Policy Rates


For the remaining net-oil importing economies across the region,

the growth outlook in H215 remains dependent both on the

security environment, in addition to the extent to which

governments can provide greater clarity on the policy environment.

The ongoing conflicts in Syria, Libya and Iraq appear no closer to

being resolved, and are likely to have negative spillovers for their

neighbors in the form of weaker sentiment and investment. Reform

momentum is also crucial, however with unemployment remaining

stubbornly high, the appetite to push ahead with measures such as

subsidy reforms or cutting the public sector wage bill also appear

minimal for the time being.

Jean-Paul Pigat +971 4 230 7807

0

2

4

6

8

10

12

14

16

18

Jan-08 Feb-09 Mar-10 Apr-11 May-12 Jun-13 Jul-14

% y

/y (

3m

mavg)

0

2

4

6

8

10

12

Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

EgyptJordanTunisiaMorocco

%

Fixed Income

Sovereign and corporate bonds had a month of round trips

with substantial intra-month volatility, attributed to Greece

debt and China equities, but ultimately finishing the month in

close proximity to thier opening levels.

Global Bonds

Greece failing to meet its payment to IMF in end June and a ‘No’

outcome of the referendum vote on 5th July caused developed

world sovereign yields to tumble substantially. Yields on 10 yr UST

and Bunds touched lows of 2.19% and 0.64% respectively.

However, since then, fading Grexit risk energised the market to

regain lost ground and ultimately most sovereign bond yields

closed within few bps of their opening levels. Even Greece, which

is on the cusp of defaulting, saw its 10 yr yields close only 20bps

wider at 11.56% despite downgrade of its ratings by all three rating

agencies to CCC-/Caa3/CC. The 10bps widening in UK gilts is

largely justified on the back of UK reporting its largest trade deficit

in two years, sparking expectation of higher issuance of

government securities.

Rising above the monthly volatility, the gradual trend over the

quarter for benchmark sovereign yields has been that of widening

which in turn is supported by the improving health of the global

economy. With Greece debt and China equities dominating the

headlines through out the month, few took notice of the positive

economic data coming out of the Eurozone and the fact that 2Q

GDP in the US reflected growth rate of around 3%. Greece,

representing less than 2% of Eurozone economy, is small in

relative terms and we think global economy will easily be able to

withstand the Greek drama.

10Yr Government Bond Yields

Yield % 1M chg 3M chg YTD chg

US 2 2 51 24

UK 2 10 57 33

Germany 1 -2 67 27

Greece 12 20 -4 248

Russia 11 20 N/A -205

Brazil 5 6 51 58

Source: Bloomberg

Against the backdrop of a general widening in benchmark yields

and Greece related uncertainty causing widening of credit spreads,

cash corporate bonds in the US had a month of declining prices

and negative total returns. Both IG and HY bonds closed lower.

European IG corporate bonds also lost ground in prices. In terms

of running yield, Euro IG bonds only offer yield of 1.3%.

The hunt for higher yield and relatively healthier economic growth

in the emerging market universe saw investors shifting money to

EM assets. Hard currency denominated EM sovereign bonds are

currently the best beneficiary of all the troubles and uncertainties in

the developed world. Year-to-date, EM sovereign bonds reported

total return of 1.25% compared with loss of -0.57% for UST, -

1.25% for Eurozone and -2.29% for the UK sovereign bonds.

Similarly USD denominated emerging market corporate bonds

have reported YTD total return of 3.64% compared with a loss of -

1.32% for US IG and a loss of -1.63% for Euro IG bonds.

Global Corporate Bond OAS (bps)

OAS 1M chg 3M chg YTD chg

US IG Corp 153 7 18 15

US HY Corp 522 27 20 -24

EUR IG Corp 99 12 21 20

EUR HY Corp 396 13 50 -4

USD EM SOV 272 -28 -18 -19

USD EM CORP 393 12 -13 -54

Source: Bloomberg

The hunt for higher yield and relatively healthier economic growth

in the emerging market universe saw investors shifting money to

EM assets. Hard currency denominated EM sovereign bonds are

currently the best beneficiary of all the troubles and uncertainties in

the developed world. Year-to-date, EM sovereign bonds reported

total return of 1.25% compared with loss of -0.57% for UST, -

1.25% for Eurozone and -2.29% for the UK sovereign bonds.

Similarly USD denominated emerging market corporate bonds

have reported YTD total return of 3.64% compared with a loss of -

1.32% for US IG and a loss of -1.63% for Euro IG bonds.

Looking at fundamentals, we note that within the emerging market

universe, based on the reported PMI last month, countries showing

expansion are the likes of Mexico, South Africa and Hungary while

those showing contraction are Brazil,Turkey and Russia. China

was flattish at 50.2. People Bank of China further eased monetary

conditions, cutting the deposit and lending rates by 25bps each to

2% and 4.85% respectively. This is much in line with easing

monetary policy action from Korea, Hungary, India, Mexico, New

Zealand and Norway during the month of June. Russia has also

unwound much of last year emergency rate hikes, lowering policy

rates by another 100bps to 11.5% in June.

The credit derivative space is largely directionless, reflecting range

bound movements with the exception of Euro Crossover which

saw a 22bps tightening in CDS level to 285bps as the Greece

issue nears resolution.

GCC Market

In addition to the Ramadan induced sluggishness, GCC credit

universe had minimal idiosyncratic issue to act on, leading to low

activity in the secondary market. Quarterly result announcements

to date have been largely positive and credit rating trends have

been stable-to-slightly-improving. While oil prices have fallen in the

last one month, no one is expecting them to hit the low levels seen

at the beginning of this year. With no local issues to muddle the

impact of global forces, GC bonds largely mirrored the UST

movements.

As we go to print, BUAEUL index at 108.82 is close to its all-time

high and materially above its Jan 1st opening level of 106.75.

Although valuations seem stretched in absolute terms, on credit

spread basis, GCC bonds are cheaper today than a year ago.

Average credit spread on UAE IG bonds is 139bps now compared

with 123bps same time last year.

BUAEUL Index – YTW history

Source: Bloomberg

We note that leverage in the markets is lower than what it was a

few years ago and asset managers have more cash on hand than

ever before. With supply continuing to be nowhere near

satisfaction levels, the distorted demand supply dynamics in the

GCC is a big anchor for bond prices.

In the recent volatility, better-quality, lower-beta high-yield bonds,

such as bank Tier 1 securities / perpetuals were more stable as

investors looked to add desired credits on weakness. Longer dated

utilities, particularly TAQA was volatile during the month on the

back of news surfacing about TAQA appointing advisory firms for

debt restructuring.

During the month S&P released its banking system assessment for

the GCC sovereigns, rating Kuwait and Oman at 4, UAE at 5 and

Bahrain at 6 on a scale of 1 to 10 with ‘1’ being the lowest risk.

Fitch was also active during the month, upgrading Jebel Ali Free

Zone to BBB-, in sync with the rating on its parent DP World and

downgrading National Bank of Bahrain to BBB – from BBB, in

synch with the Bahrain sovereign. Moody’s assigned first time

rating of A2 to International Bank of Qatar.

Oil related names such as Dana Gas, Kuwait Energy, Topaz

Marine etc have regained much of their previously lost ground

albeit still trading at distress levels which we find justified in view of

continued pressure on oil prices.

GCC Primary Market - The new issue market is still shut partly

because of Ramadan but largely because volatile market

conditions have kept issuers on the sidelines. The forward

calendar has grown slightly with likes of International Finance Corp

(for senior unsecured sukuk), International Bank of Qatar,

Renaissance Services (perpetual), Abu Dhabi Islamic (for Tier 1

security), NBAD (for commercial paper) and National Bank of

Oman (for Tier 1 security) etc on the wings to tap the market post

Ramadan.

Anita Yadav +9714 230 7630

Currencies

Along with other financial markets the FX market breathed a

sigh of relief as an agreement between Greece and its

creditors reached a conclusion this week. The EUR which had

risen in anticipation of a deal fell back and the USD

strengthened across the board.

EUR vulnerability returns…

Going forward the EUR will remain vulnerable as the markets

return their focus onto the Federal Reserve and the likelihood of it

raising interest rates in the second half of the year, setting the

stage for a sharp divergence in monetary policy between the US

and the Eurozone. However, it would be a mistake to think that the

latest agreement has finally put to bed the Greek crisis. Grexit may

have been avoided for now, but the issue of debt sustainability has

not been addressed (see Global Macro) and alongside further

austerity these fault lines could still see the issue return with a

vengeance at a later date.

As Grexit risks abate…

Once the markets have moved beyond the immediate hurdle of

parliamentary approval of the Greek debt deal, implementation

risks over privatizations will be another obstacle as will the

problem of tax collection, as they have always been. However,

with Grexit risks temporarily at least out of the way, the market

focus can probably revert to broader issues of ECB monetary

policy and QE.

Recent events appear to have taken a toll on confidence in parts of

the Eurozone and harder economic data also suggest that growth

in Q2 will be not much more than in Q1, with Eurozone industrial

production dropping 0.4% m/m in May. With April also revised

down to 0.0% m/m, the three months trend rate fell back to just

0.1% from 0.9% in the three months to April. This ties in with

mixed confidence indicators recently and highlights ongoing risks

to the recovery, which are not helped by the uncertainty about

Greece.

Accordingly the ECB will stick to its ongoing commitment to full QE

implementation, but also that the ECB stands ready to employ all

its tools to limit contagion should the Greek crisis flare up again.

…And the USD recovers

This will increasingly contrast with the message from the Fed,

whose Chair Janet Yellen recently reminded markets of the likely

Fed tightening in the second half of the year. Having spent a

number of months testing higher levels we would not be surprised

if EUR/USD break below 1.0915 soon (the low after the Greek

referendum) which would likely trigger a period of sustained

underperformance, with the potential for the year’s lows below

1.05 to be revisited as the September FOMC meeting draws

nearer.

EUR/USD vulnerability to return


GBP/USD also biased down

GBP/USD has also endured a volatile period going all the way

back to the May general election when it shot up to 1.58 in the

aftermath of the Conservative Party’s victory. Since Mid-June,

however it has given up most of these gains falling back to as low

as 1.5350 last week before rallying back above 1.56 currently.

UK inflation still flat in June


Most recently the pound has been helped by Bank of England

Governor Carney saying to the UK Parliament's Treasury

Committee that ‘the point at which interest rates may begin to rise

is moving closer’. However, he also added that ‘once rates begin

to adjust, we expect for those adjustments to be at a gradual pace

and to a limited extent’. We doubt if the Bank is likely to raise

interest rates in 2015, still believing that this will be more of an

issue for 2016. Not only has Carney’s track record of calling a turn

in the monetary policy cycle relatively poor (in mid-2014 he warned

that the markets were underestimating tightening risks in the

second half of the year), but the economic data just does not

appear consistent enough for a rise in rates to happen soon.

Inflation remains stuck at 0.0%, manufacturing output is relatively

weak (contracting -0.6% in May) and upcoming budget cuts are

likely to provide further headwinds to growth. Accordingly we think

1

1.05

1.1

1.15

1.2

1.25

Jan-15 Mar-15 May-15 Jul-15

-0.5

0.0

0.5

1.0

1.5

2.0

Jan-14 Jul-14 Jan-15

UK CPI (YoY)

that the comments of the Bank of England’s Chief Economist

Andrew Haldane probably have more merit when he argued that ‘a

policy of early lift-off could be self-defeating’.

JPY uptrend still intact

Unsurprisingly the JPY was the main beneficiary of market

uncertainty in the last few weeks, both in relation to Greece and

also during the downdraft in Chinese equity markets. USD/JPY fell

to as low as 120.50 before recovering to 123.70 after the Greek

deal was announced. Ultimately, however, as attention turns back

to fundamentals and away from risk aversion USD/JPY should

start to appreciate again, reflecting the combined impact of higher

US interest rates and the probability of more BOJ stimulus

measures to come.

Commodity currencies underperform

One of the main themes of the last month has been the steep drop

in commodity currencies which were hit by the triple whammy of

risk aversion, sharp falls in commodity prices and central banks

running scared of deteriorating business sentiment. In the Kiwi’s

case there was a slump in the ANZ Business Activity Outlook

index to 23.6 in June from 32.6 in May, while in Australia the AIG

business survey also fell in June, the May trade deficit widened

and retail sales also disappointed relative to expectations.

% Change against USD in the last month


As the chart shows, the AUD, CAD, NZD and NOK were amongst

the weakest currencies against the USD over the last month. Not

only was oil under obvious pressure but iron ore and other

industrial metals also saw weakness, reflecting concerns about the

strength and demand of the Chinese economy. The RBA not

surprisingly left interest rates unchanged at 2.0% during the

month, but with business surveys weak it warned about the need

for more competitiveness through the exchange rate, allowing

AUD/USD to break and stay below our three-month 0.75 forecast.

USD/CAD also met our three-month forecast during the period

reaching as high as 1.2805. Even with an interest rate of 0.75%

the Bank of Canada may still allude to the chance of a further 25bp

rate cut to 0.50% at its policy meeting this week. Indeed with oil

prices likely to remain under pressure in view of this week’s Iran

deal there is clearly scope for USD/CAD to continue its climb

towards our six-month forecast of 1.30. In the NZD’s case with

interest rates still at 3.25% there is perhaps the greatest scope for

significant interest rate cuts, suggesting that downside pressure in

the Kiwi may become a consistent story in the coming months.

Tim Fox +9714 230 7800

0.48

0.01

-1.73

-2.28

-3.26

-3.61

-3.7

-3.85

-4.42

-6 -4 -2 0

British Pound

Japanese Yen

Swiss Franc

Euro

Canadian Dollar

Australian Dollar

Sweedish Krone

New Zealand Dollar

Norwegian Krone

Equities

It was a month of two halves for global equities as the

situation in Greece and China evolved positively towards the

latter part of the month after a tough start. Ironically, it was

European equities which dragged global equities higher even

as weakness persisted across other regions highlighting the

fact that at the moment money flow is dictating market moves

more than fundamentals.

The MSCI World index rallied +0.7% 1m on the back of gains in

developed market equities with the MSCI G7 index adding +0.7%

1m. Much of the gains in developed markets equities were led by

European equities with the Euro Stoxx 600 index rallying +4.0%

1m. MENA and Emerging market equities traded lower with the

MSCI Emerging markets index losing -3.1% 1m and the S&P Pan

Arab Composite index declining -2.4% 1m. Chinese equities

remained the focal point with the Shanghai Composite index losing

-25.3% 1m with volatility rising +8.7% 1m (VHSI index).

With Greece seemingly out of picture for the short term at least,

investors will turn their focus back to the ongoing earnings season

and the monetary policy guidance in the US. There is a concern

that the expectations bar for earnings have been set too low and it

will be interesting to see how that plays out. Locally, activity is

expected to pick up following Eid holidays as Q2 earnings season

picks up pace and clarity emerges on the Iran deal.

H1 2015 – Equities retains investor’s interest

Global equities continued their strong performance of 2014 into H1

2015. The MSCI World index returned +3.0% in H1 2015, third

best after Brent oil (+10.9% in H1 2015) and Hedge Funds (+3.7%

in H1 2015). However, it is worth pointing out that since the end of

H1 2015, Brent has given up all those gains and is actually -0.9%

for the year while equities have so far retained their gains. (Please

see the table below for detailed breakdown)

In terms of regional performances, gains were broad based with

the exception of frontier markets. The MSCI EAFE index and the

S&P Pan Arab Composite index returned +5.9% and +4.6%

respectively. Gains in developed markets were driven by strength

in European and Japanese equities with the Euro Stoxx 600 index

and the Nikkei index rallying +11.3% and +16.0% respectively in

local currency terms. Within emerging markets, Chinese equities

were standout performers with the Shanghai Composite index

adding +32.2%. Even with the recent correction, the Shanghai

Composite index is still up +21.3% for the year as of 14 July 2015.

The fund flow data too ties in with the broad theme. Global equities

have received inflows to the tune of USD 23.6bn ytd with

European and Japanese equities receiving USD 68.4bn and USD

33.2bn respectively. US and Emerging market equities have seen

outflows of USD 108.2bn and USD 12.0bn respectively.

Asset Class Returns

2008 2009 2010 2011 2012 2013 2014 H1 2015

Global Equities -40.23% 30.94% 12.49% -4.92% 16.71% 27.46% 5.60% 2.97%

DM Equities -42.86% 32.75% 8.44% -11.55% 18.09% 23.52% -4.25% 5.93%

EM Equities -53.19% 78.55% 19.30% -18.16% 18.62% -2.31% -1.96% 3.06%

FM Equities -55.18% 11.46% 22.20% -18.44% 8.47% 25.96% 6.62% -3.62%

GCC Equities -51.62% 13.58% 15.29% -9.24% 8.00% 26.03% 1.31% 4.58% Dev Sov Bonds* - - 6.04% 6.41% 1.41% -4.59% 0.11% -1.90%

Treasuries* - - 6.00% 9.77% 2.03% -3.37% 6.19% 1.77% HY Corp Bonds* - - 12.00% 2.66% 18.63% 7.55% -0.26% 0.42%

Commodities -36.61% 18.72% 16.67% -13.37% -1.14% -9.58% -17.04% -1.57%

Gold* 5.80% 24.73% 29.48% 10.06% 7.14% -27.97% -1.34% -0.81%

Oil (Brent)* -51.42% 70.94% 21.58% 13.33% 3.47% -0.28% -48.26% 10.92%

Global REITs - 28.47% 31.37% 5.68% 21.08% -2.10% 33.51% -4.19%

Hedge Funds -19.37% 9.15% 7.34% -5.15% 5.04% 7.37% 1.43% 3.68%


Indices used - Global Equities (MXWO index), DM Equities (MXEA Index), EM Equities (MXEF Index), FM Equities (MXFM Index), GCC

Equities(SEMGPCPD Index) Dev Sov Bonds (BGSV Index), Tresuries (BUSY Index), HY Corp Bonds (BHYC Index), Commodities (BCOM Index), Gold

and Oil (Spot Prices) Global REITS (ENXG Index), Hedge Funds (BBHFUNDS Index). * shows price change while others show total return.

Developed Markets

Developed market equities held its own all through the Greek crisis

and investors in a sense were vindicated when an agreement was

eventually reached. The MSCI EAFE index added +0.5% 1m on

the back of gains in the Euro Stoxx 600 index (+4.0% 1m) and the

S&P 500 index (+1.2% 1m).

Emerging Markets

Emerging market equities underperformed global equity markets

as weakness in Chinese equities overshadowed its peers. The

MSCI Emerging Markets index declined -3.1% 1m as the Shanghai

Composite index dropped -24.8% 1m. For the record, the

SHCOMP index declined as much as -35% 1m at one point of time

before the government initiated a series of measures to stem the

decline.

China – Government makes direct intervention The government intervened directly into equity markets by asking

state-owned brokerage firms to buy stocks, setting up a market

stabilisation fund, providing liquidity to brokerages, halting IPOs

and even raising margin requirements for shorting contracts on

small-cap CSI 500 index. However, it is worth noting here that

Chinese brokers have about CNY 900bn in net assets versus CNY

1.6tn in outstanding margin loans. Additionally, the government

also banned major shareholders from selling their stake in

companies and asked banks to roll over loans backed by stocks.

Some 1400 midcap stocks have also been halted from trading.

Despite these measures scepticism remains about the

effectiveness of these steps in the long run as neither the sell-off

nor the preceding surge in Chinese equities was driven by any

shift in the assessment of China’s economic fundamentals. In fact,

the latest economic data from China suggests that stimulatory

measures taken by the government earlier in the year are actually

bearing fruit. The GDP data for Q2 2015 came in at 7.0%, higher

than consensus estimates of 6.8%.

Despite the recent correction, the Shanghai Composite index still

trades at 20x trailing 12m earnings compared with its five-year

average of 13.4x. If we strip out the banking sector, then the

median P/E ratio stands at 57x which is more than 3 times its

global peers (S&P 500 index – 19x, FTSE 100 – 16x). The small

cap ChiNext index is currently trading at 81x earnings, a 45%

premium to its 5-year average and a 62% premium to the Russell

2000 index in the US.

MENA Markets

Last month saw MENA equity markets grind lower as volumes

dried up across the board despite increased investments from

foreign investors. The ADX index (+5.4% 1m) and the Qatar

Exchange (+0.6% 1m) were the only indices to close in positive

territory as the S&P Pan Arab Composite index declined -2.4%

1m. Much of the gain on the ADX index was on account of the

decision of the UAE government to lift the restriction on foreign

ownership in Etisalat. Etisalat is the largest listed company in the

UAE with market capitalization c. USD 28bn. Once the foreign

ownership restrictions are eased, it is likely to be included in the

MSCI UAE index and the MSCI EMEA Telecom index which in

turn, according to market estimates, could generate passive

inflows into the stock to the tune of USD 200mn. Etisalat is

currently trading at 2016E BEst PE of 10.5x and BEst EV/EBITDA

of 4.4x, which is 20% and 10% discount respectively to its

CEEMEA peers. The dividend yield for the company is c. 5.5%.

The Tadawul finally opened up for for foreign investors last month

and as expected it was a soft launch. In fact, the Tadawul saw

outflows for a second consecutive month to the tune of SAR

937.0mn. The QFI route saw little action with marginal inflows of

SAR 18.1mn and accounted for negligible trading volume on the

exchange.

Saudi Arabia Q2 2015 earnings – Positive start Banking sector, which accounts for nearly 43% on the Tadawul,

was first off the block in reporting Q2 2015 earnings. On an

average, profit for the banks grew +7.9% y/y and +7.5% q/q.

Banks reported return on assets of 2.3% (flat y/y) as net interest

margins remained stable. Loan growth remained weak with total

loans increasing +2.9% q/q and +5.2% since Q4 2014.

The sector is currently trading at a BEst P/E of 12.8x 12m forward

and BEst P/B ratio of 1.71x, implying a 19.6% premium on a P/E

basis and a 6.9% premium on a P/B basis to its CEEMEA peers.

Aditya Pugalia +9714 230 7802

Commodities

Commodity markets have had a volatile start to H2 after

generally underperforming in the first six months. A change in

risk appetite, concerns about China's economy and a final

agreement between Iran and the P5+1 have been the main

factors driving prices in the last few weeks in our view.

Volatility rears its head again

After a relatively mild June, oil markets entered a new phase of

volatility to start the second half of 2015. Benchmark oil futures fell

sharply for two weeks in a row at the start of July, their first such

continuous decline since March for ICE Brent futures and February

for Nymex WTI. By July 15th WTI had fallen 10.3% from the end of

H1 while Brent was down 7.7%. Oil markets have given up nearly

all their year-to-date (ytd) gains by early July after having been up

as much as 11.6% ytd at the end of June 30th.

Volatility ticks up again

Source: Bloomberg, Emirates NBD Research.

What explains this sudden reversal in market direction?

Fundamentally, little has changed in the last two weeks to affect oil

markets so significantly. True, physical indicators do point to a

bearish tone for oil. In June OPEC recorded its highest production

since August 2012 and at 32.1m b/d the bloc is producing over 2m

b/d higher than its own recently-renewed production target. Output

is surging in particular from Iraq, which added over 560k b/d in

June alone as a new heavier oil grade is now officially being

marketed. Saudi Arabia too continues to pump at highly elevated

levels and has produced at over 10m b/d since March this year. In

the US, the shale oil industry continues to demonstrate its

resilience to low oil prices by adding drilling rigs for two weeks in a

row. However, we would argue that all these dynamics were well

signposted in the final weeks of H1 and the oil markets had been

rising or at least staying stable in the face of them.

The factor catalysing the market downturn, in our view, has been a

significant readjustment in risk appetite following the outcome of

the Greece referendum on the EU bailout package and the

dramatic decline in Chinese equity markets in recent weeks. Net

long WTI contracts have fallen by nearly 71,000 since the start of

June, falling by the largest amount so far this year in the week

ending July 7th as investors moved out of risk assets and into safe

haven bids.

Greece's impact on oil markets is minimal: total consumption there

was just 289k b/d in 2014, around 0.3% of total global demand.

But the reverberations from its fiscal crisis raise doubts about the

sustainability of the Eurozone's economic recovery, particularly at

a time when regional oil consumption was surprising on the

upside.

China is the bigger risk in our view. Oil imports there surged in

June by 27% month-on month and were up 7.5% yoy in H1. But

the slump in equity markets and soft non-oil commodity trade data

shows China's economy is slowing in line with government

expectations. Even with solid oil import data, any worries about

industrial demand in China will help to put negative pressure on oil

prices. GDP data for Q2 which showed growth of 7% was above

expectations and will help act as a salve.

Nuclear deal signed with Iran

Most significant for oil markets has been the announcement of a

deal between Iran and the P5+1 over Iran's nuclear programme. In

the immediate aftermath, the deal prompted a sharp oil sell-off on

expecations of Iran contributing further to a global glut. However,

in the medium-term the return of Iranian oil may be slower than

markets anticipate.

Since the imposition of US and EU sanction in 2012 Iranian oil

production has languished below 3m b/d but had started to tick up

gradually in 2014-15 to an average of 2.79m b/d. Oil exports have

fallen significantly since 2012, moving to as low as 1.57m b/d in

Q4 of Iranian fiscal year 2013/14 from as much as 2.06m b/d on

average in 2009/10.

Iranian oil output

Source: Bloomberg, Emirates NBD Research.

Iran's oil minister, Bijan Zanganeh, said the country aims to add

1m b/d of production within seven months of a deal being reached

which would push Iran into the position of third largest producer in

OPEC. It is unclear how effectively Iran's existing wells had been

shut-in in response to the limitations imposed on the country's oil

0

10

20

30

40

50

60

70


CBOE Oil ETF VIX Index

2000

2200

2400

2600

2800

3000

3200

3400

3600

3800

4000

Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

Iran oil production (k b/d)

sector by sanctions and we remain sceptical that Iran would be

able to raise output so quickly in such a short time frame.

The bigger question is whether or not markets would actually need

this additional oil. Iran's oil would come back on to markets in

conditions far different then when it left. Global markets are

contending with a surplus that we estimate hit as much as 1.8m

b/d in Q1 2015 and helped to bring prices down 47% from year

ago levels as of July 14th. Should Iran raise production even by

half as much as it is targeting, a significant global oil surplus will

easily carry over into next year.

Iran's fellow OPEC members have also been seeking to preserve

market share in the wake of the price crash. Saudi Arabia and Iraq,

as we have noted, have quickly raised output this year. These

dynamics have helped to squeeze Iran's share of OPEC

production from 12% pre-sanctions to less than 9% currently.

Considering the bloc recently rolled over its production target of

30m b/d we see little chance that Iran would be able to convince

other members to make way for new shipments of its oil.

The medium-term impact of the deal in our view, then, is that it will

serve as a brake on a rapid rally in oil prices, limiting their

recovery, but not derailing the trajectory off of the floors prices hit

in the USD40-45/b range earlier this year.

Precious metals

Gold fell 1.4% in June from a month earlier and the yellow metal

has lost 1.6% ytd. Considering the risks surrounding the integrity of

the Eurozone, gold's recent performance may be surprising. It has

traditionally acted a safe haven, rising on the back of conflict in

Ukraine, Middle East and previous rounds of the Greece fiscal

crisis. This time around though, the market appears to have taken

as a given the Fed raising rates and has turned against gold in

response. The timing of a rate rise is less critical for gold than the

likelihood of a rise happening at all as investors will be able to

position themselves accordingly.

Platinum group metals (PGMs) have come under considerable

downward pressure in the last few weeks. Platinum was down

near 15% ytd as of early July while palladium has fallen close to

18%. General investor interest toward precious metals has turned

negative in H1 2015 with palladium showing the largest relative

drawdown in ETF holdings.

We have shifted our H2 forecasts for gold downward somewhat to

an average of around USD1,150/troy oz in Q3 and USD1,164/troy

oz in Q4. This brings our annual average to USD1,181.96/troy oz,

a decline of 6.7% from 2014. We expect the turnover of Q3/Q4 to

be the inflection point for precious metals as investors will be able

to plot about a steady normalisation of US monetary policy.

Industrial metals

Industrial metals have continued their drift downward and in early

July were getting close to five year lows. The LMEX index which

tracks the six leading non-ferrous contracts traded on the LME has

given up 11.7% ytd and is down 21% yoy. As ever, China

dominated movements in metals prices and the rapid fall of the

Shanghai equity index helped to drag metal prices downward.

Aluminium fell 6% m-o-m in June and was down 7.8% ytd as of

mid July. Copper fell 7% in June and is down 11.7% ytd.

Base metals lingering

Source: Bloomberg, Emirates NBD.

The outlook for metals should be a bit more sanguine on signs that

the Chinese economy is recovering. The better than expected Q2

growth follows on from signs of a turnaround in the local property

sector. Prices for new houses in 70 leading cities slowed their yoy

decline in May and fixed asset investment growth stabilised in

June.

Edward Bell +9714 230 7701

2000

2200

2400

2600

2800

3000

3200


LMEX Index

GCC in Pictures

GCC Oil Production and Reference Price


Inflation


Money supply (ex Government. deposits)


Purchasing Managers’ Index


CDS Spreads

Source: Bloomberg

Private sector credit

*UAE data is total bank loan growth, not private sector credit


40

50

60

70

80

90

100

110

120

12

13

14

15

16

17

18

Jan-14 May-14 Sep-14 Jan-15 May-15

US

D /bbl

mn b

pd

Oil production OPEC Reference Price

Excludes Bahrain and Oman

-1

0

1

2

3

4

5

6


% y

/y

Qatar UAE KSA

Bahrain Oman Kuwait

0

10

20

30


% y

/y

KSA UAE Qatar

50

52

54

56

58

60

62

64

Jan-14 May-14 Sep-14 Jan-15 May-15

UAE KSA

0

100

200

300

400

Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15

bp

Abu Dhabi Dubai

Qatar Bahrain

0

5

10

15

20

25


% y

/y

Qatar UAE KSA

MENA in Pictures

Inflation


Unemployment


M2 Money Supply


FX Reserves


Oil Production


Goods Exports


-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Jan-11 Oct-11 Jul-12 Apr-13 Jan-14 Oct-14

JordanMoroccoTunisiaEgypt

% y

/y

5

6

7

8

9

10

11

12

13

14

15

Q109 Q409 Q310 Q211 Q112 Q412 Q313 Q214 Q115

MoroccoEgyptJordan

%

-5

0

5

10

15

20

25

30

35

Jan-10 Oct-10 Jul-11 Apr-12 Jan-13 Oct-13 Jul-14

EgyptMoroccoJordan

% y

/y

-60

-40

-20

0

20

40

60

80

Jan-10 Nov-10 Sep-11 Jul-12 May-13 Mar-14 Jan-15

TunisiaEgyptJordanMorocco

% y

/y

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Jan-11 Sep-11 May-12 Jan-13 Sep-13 May-14 Jan-15

LibyaIraqIran

thsd

b/d

-30

-20

-10

0

10

20

30

40

50

60

Jan-10 Nov-10 Sep-11 Jul-12 May-13 Mar-14 Jan-15

JordanMoroccoEgyptTunisia

% y

/y 3

mm

avg

FX–Major Currency Pairs & Interest Rates

Interest Rate Differentials–EUR


Interest Rate Differentials-CHF


Interest Rate Differentials-CAD


Interest Rate Differentials-GBP


Interest Rate Differentials-JPY


Interest Rate Differentials-AUD


1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

-1.0

-0.8

-0.6

-0.4

-0.2

0.0

Jul-14 Oct-14 Jan-15 Apr-15

German 2yr yield - US 2yr yield FX (rhs)

0.85

0.90

0.95

1.00

1.05

1.10

0.0

0.3

0.5

0.8

1.0

1.3

1.5

1.8


US 2yr yield - CHF 2yr yield FX (rhs)

1.05

1.10

1.15

1.20

1.25

1.30

-1.2

-0.8

-0.4

0.0

0.4


US 2yr yield - CAD 2yr yield FX (rhs)

1.45

1.50

1.55

1.60

1.65

1.70

1.75

-0.4

-0.2

0.0

0.2

0.4


GBP 2yr yield - US 2yr yield FX (rhs)

100.0

105.0

110.0

115.0

120.0

125.0

130.0

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90


US 2yr yield - JPY 2yr yield FX (rhs)

0.70

0.75

0.80

0.85

0.90

0.95

1.00

1.0

1.5

2.0

2.5

3.0


AUD 2yr yield - US 2 yr yield FX (rhs)

Major Equity Markets

MENA Equity Markets


European Equity Markets


Asian Emerging Equity Markets


US Equity Markets


Latin American Equity Markets


Emerging Europe Equity Markets


-15%

-10%

-5%

0%

5%

10%

14-Jun 19-Jun 24-Jun 29-Jun 4-Jul 9-Jul 14-Jul

Qatar Oman Dubai

Saudi Arabia Egypt Morocco

Abu Dhabi Bahrain Kuwait

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%


FTSE 100 Dax Euro Stoxx 600

Cac FTSEMIB IBEX

-40%

-36%

-32%

-28%

-24%

-20%

-16%

-12%

-8%

-4%

0%

4%

8%

12%


Taiwan Jakarta

Vietnam Sensex

South Korea Shanghai

-4%

-2%

0%

2%


S&P 500 Dow Jones Nasdaq Composite

-6%

-3%

0%

3%


Mexico Brazil Chile Colombia

-12%

-8%

-4%

0%

4%

8%


Poland Istanbul 100 Russia RTS$

Major Equity Markets

MENA Equity Indices PE/ROE 2015E


D. Market Equity Indices PE/ROE 2015E


E. Market Equity Indices PE/ROE 2015E


MENA Equity Indices PB/ROA 2015E


D. Market Equity Indices PB/ROA 2015E


E. Market Equity Indices PB/ROA 2015E


y = 0.2684x + 10.9R² = 0.0693

4.0

10.0

16.0

22.0

8.0 10.0 12.0 14.0 16.0 18.0

BE

st R

OE

2015

BEst PE 2015

DSM

DFMGI

ADSMI

MADEX

MSM

TadawulISE 100

y = 1.2453x - 8.0104R² = 0.2882

6.0

10.0

14.0

18.0

22.0

10.0 15.0 20.0 25.0

BE

st R

OE

2015

BEst PE 2015

AS51 Index

FTSE 100

Dow Jones

SMI

Nikkei

S&P500

Cac

Dax

Stoxx600

Nasdaq

y = 0.875x + 0.9479R² = 0.2058

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

0.0 5.0 10.0 15.0 20.0

BE

st R

OE

2015

BEst PE 2015

Karachi

Nifty

JakartaTaiwan

Vietnam

BovespaKospi

Shanghai

Jo'burg

Micex

y = 1.569x - 1.3533R² = 0.752

0.0

2.0

4.0

6.0

0.5 1.5 2.5 3.5 4.5

BE

st R

OA

2015

BEst PB 2015

FTSE 100

S&P500

Dow Jones

SMI

Nasdaq

Nikkei

Dax

Stoxx 600CacAS51 Index

y = 1.5792x - 1.3862R² = 0.7765

0.0

2.0

4.0

6.0

0.5 1.5 2.5 3.5 4.5

BE

st R

OA

2015

BEst PB 2015

FTSE 100

S&P500

Dow Jones

SMI

Nasdaq

Nikkei

Dax

Stoxx 600CacAS51 Index

y = 0.5507x + 1.4602R² = 0.1979

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0.0 0.5 1.0 1.5 2.0 2.5 3.0

BE

st R

OA

2015

BEst PB 2015

Karachi

NiftyJakarta

Taiwan

Bovespa

Kospi

Vietnam

Shanghai

Jo'burg

Micex

Major Commodities in Pictures

US oil production and price


Copper stocks and price


Precious metals prices


International oil production and price


Aluminum (USD/metric tonne)


Agriculture prices


20

30

40

50

60

70

80

90

100

110

7.0

7.5

8.0

8.5

9.0

9.5

10.0


US crude production (m b/d): lhs WTI (USD/b): rhs

4,500

5,000

5,500

6,000

6,500

7,000

7,500

100

150

200

250

300

350


LME copper stocks (000 tonnes): lhs

Copper (USD/metric tonne): rhs

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600


Gold (USD/troy oz) Platinum (USD/troy oz)

20

40

60

80

100

120

28.5

29.0

29.5

30.0

30.5

31.0

31.5

32.0

32.5


Total OPEC production (m b/d): lhs

Brent (USD/b): rhs

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

2,100

2,200

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000


LME aluminum stocks (000 tonnes):lhs

Aluminum (USD/metric tonne): rhs

5

7

9

11

13

15

17

19

21

50

70

90

110

130

150

170

190

210

230


Coffee: Arabica (USd/lb): lhs Sugar (USd/lb): rhs

Key Economic Forecasts - GCC

United Arab Emirates 2012 2013 2014 2015f 2016f

Nominal GDP $bn 373.7 387.5 399.7 389.7 432.6

Real GDP % 6.9 4.3 4.6 4.3 5.0

Current A/C % GDP 21.5 17.6 10.6 2.0 4.1

Budget Balance % GDP 8.8 6.4 4.4 -4.1 -1.4

CPI % 0.7 1.1 2.3 3.0 3.5

Saudi Arabia

Nominal GDP $bn 734.0 744.3 746.2 701.5 774.1

Real GDP % 5.4 2.7 3.5 2.5 3.0

Current A/C % GDP 22.3 18.0 10.1 -2.0 0.3

Budget Balance % GDP 13.6 6.5 -2.3 -11.8 -8.8

CPI % 2.9 3.5 2.7 3.0 3.5

Qatar

Nominal GDP $bn 190.3 203.2 211.8 204.5 234.2

Real GDP % 6.0 6.3 6.2 7.0 6.4

Current A/C % GDP 32.6 30.8 24.9 5.9 1.5

Budget Balance % GDP 11.4 15.5 7.3 0.1 -5.8

CPI % 1.9 3.1 3.0 2.5 3.0

Kuwait

Nominal GDP $bn 173.8 175.8 172.6 150.2 169.2

Real GDP % 7.7 2.1 0.5 1.8 3.4

Current A/C% GDP 45.3 39.8 36.8 17.3 20.4


CPI % 3.2 2.7 2.9 3.5 3.6

Oman

Nominal GDP $bn 76.2 78.1 81.7 79.6 88.4

Real GDP % 6.9 4.6 3.1 3.1 3.3

Current A/C % GDP 10.2 6.6 2.6 -13.2 -7.6

Budget Balance % GDP -0.3 0.9 2.4 -12.5 -9.8

CPI % 2.9 2.1 1.0 1.0 2.0

Bahrain

Nominal GDP $bn 30.8 32.9 33.8 34.2 37.3

Real GDP % 3.6 5.3 4.5 3.5 4.3

Current A/C % GDP 7.2 7.8 5.4 -1.8 -0.8

Budget Balance % GDP -2.0 -3.3 -3.6 -12.2 -10.4

CPI % 2.8 3.3 2.7 3.0 3.5

GCC (GDP weighted avg)

Nominal GDP $bn 476.0 483.1 485.6 459.0 506.4

Real GDP % 6.1 3.6 3.8 3.5 4.1

Current A/C % GDP 25.0 21.1 14.5 1.4 3.0


CPI % 2.3 2.7 2.6 2.9 3.4

Source: Haver Analytics, National sources, Emirates NBD Research

Key Economic Forecasts – Non-GCC Oil Importers

Egypt* 2012 2013 2014 2015f 2016f

Nominal GDP $bn 262.3 268.1 286.4 312.1 333.5

Real GDP % 3.3 2.1 2.2 4.5 5.1

Current A/C % GDP -3.9 -2.4 -0.8 -0.1 -0.4


CPI % 7.2 9.5 10.1 12.0 11.0

Jordan 262.3 268.1 286.4 312.1 333.5

Nominal GDP $bn 27.2 29.6 31.5 32.9 35.3

Real GDP % 2.7 2.8 3.1 3.3 3.5

Current A/C % GDP -17.3 -11.7 -7.7 -5.2 -8.2


CPI % 4.5 5.5 2.8 1.0 4.0

Lebanon

Nominal GDP $bn 44.1 47.2 52.2 56.9 63.1

Real GDP % 2.8 3.0 1.8 2.0 3.1

Current A/C % GDP -22.3 -24.9 -22.4 -13.4 -13.0


CPI % 6.6 4.2 2.0 6.0 5.0

Tunisia

Nominal GDP $bn 45.1 46.3 46.5 46.3 50.2

Real GDP % 4.1 2.9 2.7 2.2 3.5

Current A/C% GDP -8.3 -8.4 -9.2 -6.6 -5.6


CPI % 5.1 6.1 5.5 4.5 5.0

Morocco 3.5 5.6 6.1 6.3 5.8

Nominal GDP $bn 95.9 103.7 104.0 112.3 122.1

Real GDP % 2.7 4.4 2.0 5.8 5.7

Current A/C % GDP -9.7 -7.6 -6.0 0.2 1.4


CPI % 1.3 1.8 0.4 2.2 3.0

Oil Importers (GDP weighted avg)

Nominal GDP $bn 174.3 177.6 189.6 207.9 221.5

Real GDP % 3.18 2.78 2.21 4.26 4.76

Current A/C % GDP -8.0 -6.7 -5.2 -2.2 -2.3


CPI % 5.6 6.8 6.5 8.2 7.8

Source: Haver Analytics, National sources, Emirates NBD Research

*Egypt data refers to fiscal year (July-June)

Key Economic Forecasts – Non-GCC Oil Exporters

Algeria 2012 2013 2014 2015f 2016f

Nominal GDP $bn 207.8 208.8 225.2 180.1 208.0

Real GDP % 3.3 2.8 2.3 3.1 3.5

Current A/C % GDP 5.9 0.4 -4.0 -15.8 -11.9


CPI % 9.7 4.1 3.9 6.0 6.5

Libya

Nominal GDP $bn 95.8 74.6 61.2 61.7 72.4

Real GDP % 104.5 -16.2 -43.7 8.6 14.4

Current A/C % GDP 30.7 21.7 -8.2 -5.2 3.8

Budget Balance % GDP 17.8 -7.8 -32.6 -12.6 6.6

CPI % 6.9 2.6 5.0 9.5 9.5

Iran

Nominal GDP $bn 586.2 524.0 543.6 567.1 575.8

Real GDP % -6.6 -1.9 2.5 4.5 7.9

Current A/C % GDP 4.2 5.4 5.2 5.3 5.4


CPI % 19.7 40.0 15.0 12.0 12.0

Iraq

Nominal GDP $bn 184.2 195.5 188.6 252.9 282.2

Real GDP % 10.3 4.2 -6.2 3.2 8.9

Current A/C% GDP 16.0 12.4 -1.5 -8.9 -5.4


CPI % 2.1 1.9 3.0 3.0 5.0

Oil Exporters (GDP weighted avg)

Nominal GDP $bn 400.3 360.9 378.5 397.3 403.8

Real GDP % 8.1 -0.8 -1.9 4.2 7.8

Current A/C % GDP 8.9 6.9 1.1 -2.3 -0.6


CPI % 13.6 22.3 9.7 8.7 9.1

Key Economic Forecasts - Global

US 2012 2013 2014f 2015f 2016f

Real GDP % 2.3 2.2 2.4 3.0 3.0

Current A/C % GDP -2.8 -2.4 -2.4 -2.2 -2.3


CPI % 2.1 1.5 1.6 2.0 2.2

Eurozone

Real GDP % -0.3 0.1 0.9 1.5 1.8

Current A/C % GDP 2.0 2.8 2.0 2.5 2.2


CPI % 2.3 1.5 0.4 0.5 1.4

UK

Real GDP % 0.3 1.7 2.60 2.5 2.3

Current A/C% GDP -3.8 -4.5 -5.5 -5.0 -4.0


CPI % 2.8 2.6 1.4 0.5 1.9

Japan

Real GDP % 1.5 1.5 0.0 1.0 1.5

Current A/C % GDP 1.0 0.7 0.5 2.0 1.0


CPI % 0.0 0.4 2.7 1.0 1.5

China

Real GDP % 7.7 7.7 7.4 7.0 6.7

Current A/C % GDP 2.3 2.0 2.1 2.2 2.1

Budget Balance %GDP -1.7 -1.9 -2.0 -2.5 -2.5

CPI% 2.6 2.6 2.0 1.5 2.0

India*

Real GDP% - - 6.9 7.4 8.0

Current A/C% GDP -5.4 -2.8 -2.3 -1.5 -1.5


CPI % 9.3 10.9 8.0 7.0 5.0


*For India the data refers to fiscal year (April – March)

FX Forecasts

FX Forecasts - Major Forwards

Spot 14.07 1M 3M 6M 12M 3M 6M 12M

EUR/USD 1.1009 1.08 1.03 1.00 0.95 1.1023 1.1041 1.1094

USD/JPY 123.4000 125.0 127.0 130.0 133.0 123.2307 122.9745 122.3700

USD/CHF 0.9448 0.95 1.00 1.03 1.05 0.9418 0.9379 0.9289

GBP/USD 1.5636 1.50 1.45 1.50 1.55 1.5626 1.5616 1.5601

AUD/USD 0.7452 0.77 0.75 0.73 0.70 0.7414 0.7379 0.7319

USD/CAD 1.2728 1.23 1.27 1.30 1.35 1.2742 1.2750 1.2750

EUR/GBP 0.7040 0.72 0.71 0.67 0.61 0.7054 0.7070 0.7110

EUR/JPY 135.8400 135 131 130 126 135.8399 135.8393 135.8390

EUR/CHF 1.0403 1.03 1.03 1.03 1.00 1.0383 1.0357 1.0307

NZD/USD 0.6715 0.70 0.68 0.65 0.65 0.6664 0.6618 0.6541

FX Forecasts - Emerging Forwards

Spot 14.07 1M 3M 6M 12M 3M 6M 12M

USD/SAR* 3.7504 3.75 3.75 3.75 3.75 3.7507 3.7511 3.7552

USD/AED* 3.6730 3.67 3.67 3.67 3.67 3.6729 3.6729 3.6730

USD/KWD 0.3028 0.29 0.29 0.29 0.30 0.3093 0.3203 0.3313

USD/OMR* 0.3850 0.38 0.38 0.38 0.38 0.3865 0.3900 0.4005

USD/BHD* 0.3770 0.376 0.376 0.376 0.376 0.3792 0.3815 0.3880

USD/QAR* 3.6414 3.64 3.64 3.64 3.64 3.6428 3.6447 3.6489

USD/EGP 7.8289 7.90 8.00 8.10 8.30 8.175 8.375 8.95

USD/INR 63.3925 64.00 63.00 63.00 61.00 64.3 65.34 67.47

USD/CNY 6.2090 6.25 6.30 6.35 6.40 6.143 6.1745 6.2645

Data as of 14 July 2015


Interest Rate Forecasts

USD Swaps Forecasts Forwards

Current 3M 6M 12M 3M 6M 12M

2y 0.90 1.25 1.45 1.60 1.10 1.30 1.65

5y 1.79 1.87 2.05 2.15 1.93 2.07 2.30

10y 2.49 2.51 2.70 2.85 2.57 2.65 2.79

2s10s (bp) 159 126 135 125 147 135 114

US Treasury Forecasts 0.97

2y 0.64 1.05 1.20 1.35

5y 1.68 1.75 1.90 2.00

10y 2.41 2.45 2.60 2.75

2s10s (bp) 177 140 140 140

USD LIBOR Forecast

3m 0.28880 0.30 0.55 0.80

EIBOR Forecast

3m 0.74571 0.80 1.00 1.25

Policy Rate Forecasts

Current% 3M 6M 12M

FED 0–0.25 0.25 0.50 0.75

1.00

ECB 0.05 0.05 0.05 0.05

BoE 0.50 0.50 0.50 0.75

BoJ 0.10 0.10 0.10 0.10

SNB -0.75 -0.75 -1.00 -1.00

RBA 2.00 2.00 2.00 2.00

RBI (repo) 7.25 7.25 7.00 6.50

SAMA (r repo) 0.25 0.25 0.25 0.25

UAE (1W repo) 1.00 1.00 1.00 1.00

CBK (dis. rate) 2.50 2.50 2.50 2.50

QCB (o/n depo) 0.75 0.75 0.75 0.75

CBB (1W depo) 0.50 0.50 0.50 0.50

CBO (o/n repo) 2.00 2.00 2.00 2.00

Prices as of 14 July 2015


Commodity Forecasts

Global commodity prices

Current 2015q1 q2 q3 q4 2016q1 q2

Energy

Crude oil: WTI (USD / b) 53.13 48.63 57.94 59.00 60.00 61.20 58.50

Crude oil: Brent (USD / b) 58.69 55.16 63.50 64.00 67.50 70.00 68.00

Crude oil: OPEC Reference

(USD / b)

55.23 50.30 59.89 62.72 65.48 67.90 65.96

Precious metals

Gold (USD / t oz) 1,155.36 1,219.35 1,193.85 1,150.34 1,164.31 1,186.67 1,199.10

Platinum (USD / t oz) 1,030.00 1,194.56 1,129.42 1,055.11 1,040.25 1,056.59 1,096.72

Base metals

Aluminum (USD / metric

tonne)

1,707.00 1,814.65 1,791.05 1,785.00 1,800.00 1,850.00 1,875.00

Copper (USD / metric tonne) 5,565.00 5,801.27 6,057.78 6,000.00 6,150.00 6,250.00 6,250.00



Global Equities Market Watch

Index Last Close ADV Traded

30d USD mn

Mtd %

chg

Ytd %

chg

%membera

bove 200d

MA

BEst PE BEst PB BEst Dvd

Yld

Dow Jones Industrial Average Index 18,054 6,615 2.5 1.3 60 16.0 3.1 2.4

S&P 500 Index 2,109 32,985 2.2 2.4 59 17.8 2.7 2.1

Nasdaq Composite Index 5,105 19,637 2.4 7.8 57 22.2 3.6 1.1

FTSE100 Index 6,754 6,601 3.3 2.5 69 16.3 1.9 4.0

DAX Index 11,517 4,890 5.0 17.2 83 14.4 1.8 2.8

CAC 40 Index 5,032 5,163 4.8 17.5 85 16.4 1.5 3.3

Swiss Market Index 9,311 3,038 5.9 3.5 65 18.1 2.7 3.2

Nikkei Index 20,385 13,749 1.1 17.3 83 19.2 1.8 1.6

S&P/ASX 200 Index 5,577 3,356 3.2 4.2 56 15.8 1.9 4.7

Stoxx Europe 600 Index 398 34,733 4.3 16.1 79 16.8 1.9 3.3

Dubai Financial Market General Index 4,053 177 0.1 8.4 50 12.5 1.5 3.1

Abu Dhabi Sec Market General Index 4,777 52 1.7 6.0 41 11.3 1.6 4.8

Tadawul All Share Index 9,275 1,244 2.2 11.5 42 16.7 2.0 3.0

Istanbul SE National 100 Index 83,041 1,239 0.7 -3.3 58 10.6 1.3 3.0

Egyptian Exchange Index 7,687 39 -7.1 -12.9 3 10.8 1.0 2.9

Kuwait Stock Exchange Index 6,241 41 0.7 -4.4 21 - - -

Bahrain Bourse All Share Index 1,335 1 -2.4 -6.4 - - - -

Muscat Securities Index 6,535 7 1.8 3.1 50 11.5 1.4 -

Qatar Exchange Index 11,964 58 -1.6 -2.2 45 13.3 2.0 -

MADEX Free Float Index 7,916 13 1.0 0.9 43 16.1 2.2 4.3

Hong Kong Hang Seng Index 4 5,322 -4.5 6.1 53 12.1 1.3 3.3

Shanghai Composite Index 3,924 142,028 -11.0 17.7 65 16.3 2.0 1.8

Korea Stock Exchange Index 2,059 5,367 -0.1 8.2 69 11.8 1.0 1.4

BSE Sensex 27,933 80 1.5 2.5 53 16.3 2.8 1.6

Nifty 8,454 1,085 1.9 2.9 56 16.5 2.8 1.5

Karachi Stock Exchange Index 35,447 114 3.7 11.0 73 9.2 1.8 5.3

Taiwan SE Weighted Index 9,042 2,704 -2.9 -2.7 27 12.8 1.6 3.7

Bovespa Brasil Sao Paulo SE Index 53,239 1,524 0.3 6.5 49 14.5 1.3 4.0

Micex Index 1,647 488 -1.3 17.0 71 6.6 0.6 4.4

FTSE/JSE Africa All Share Index 52,110 1,521 1.1 5.3 60 17.0 2.0 3.4

Vietnam Ho Chi Minh Stock Index 639 100 6.4 15.6 55 14.5 2.2 2.8

Jakarta SE Composite Index 4,902 267 -1.0 -7.0 28 14.9 2.4 2.1

FTSE Bursa Malaysia KLCI Index 1,721 211 1.0 -2.1 37 16.0 1.9 3.3

Mexican Stock Exchange 45,137 377 0.2 4.6 60 21.4 2.6 1.8



Disclaimer

PLEASE READ THE FOLLOWING TERMS AND CONDITIONS OF ACCESS FOR THE PUBLICATION BEFORE THE USE THEREOF. By continuing to access and use the

publication, you signify you accept these terms and conditions. Emirates NBD reserves the right to amend, remove, or add to the publication and Disclaimer at any time. Such

modifications shall be effective immediately. Accordingly, please continue to review this Disclaimer whenever accessing, or using the publication. Your access of, and use of the

publication, after modifications to the Disclaimer will constitute your acceptance of the terms and conditions of use of the publication, as modified. If, at any time, you do not wish

to accept the content of this Disclaimer, you may not access, or use the publication. Any terms and conditions proposed by you which are in addition to or which conflict with this

Disclaimer are expressly rejected by Emirates NBD and shall be of no force or effect. Information contained herein is believed by Emirates NBD to be accurate and true but

Emirates NBD expresses no representation or warranty of such accuracy and accepts no responsibility whatsoever for any loss or damage caused by any act or omission taken

as a result of the information contained in the publication. The publication is provided for informational uses only and is not intended for trading purposes. Charts, graphs and

related data/information provided herein are intended to serve for illustrative purposes. The data/information contained in the publication is not designed to initiate or conclude any

transaction. In addition, the data/information contained in the publication is prepared as of a particular date and time and will not reflect subsequent changes in the market or

changes in any other factors relevant to their determination. The publication may include data/information taken from stock exchanges and other sources from around the world

and Emirates NBD does not guarantee the sequence, accuracy, completeness, or timeliness of information contained in the publication provided thereto by or obtained from

unaffiliated third parties. Moreover, the provision of certain data/information in the publication may be subject to the terms and conditions of other agreements to which Emirates

NBD is a party.

None of the content in the publication constitutes a solicitation, offer or recommendation by Emirates NBD to buy or sell any security, or represents the provision by Emirates NBD

of investment advice or services regarding the profitability or suitability of any security or investment. Moreover, the content of the publication should not be considered legal, tax,

accounting advice. The publication is not intended for use by, or distribution to, any person or entity in any jurisdiction or country where such use or distribution would be contrary

to law or regulation. Accordingly, anything to the contrary herein set forth notwithstanding, Emirates NBD, its suppliers, agents, directors, officers, employees, representatives,

successors, assigns, affiliates or subsidiaries shall not, directly or indirectly, be liable, in any way, to you or any other person for any: (a) inaccuracies or errors in or omissions

from the publication including, but not limited to, quotes and financial data; (b) loss or damage arising from the use of the publication, including, but not limited to any investment

decision occasioned thereby. (c) UNDER NO CIRCUMSTANCES, INCLUDING BUT NOT LIMITED TO NEGLIGENCE, SHALL EMIRATES NBD, ITS SUPPLIERS, AGENTS,

DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES, SUCCESSORS, ASSIGNS, AFFILIATES OR SUBSIDIARIES BE LIABLE TO YOU FOR DIRECT, INDIRECT,

INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, OR EXEMPLARY DAMAGES EVEN IF EMIRATES NBD HAS BEEN ADVISED SPECIFICALLY OF THE POSSIBILITY

OF SUCH DAMAGES, ARISING FROM THE USE OF THE PUBLICATION, INCLUDING BUT NOT LIMITED TO, LOSS OF REVENUE, OPPORTUNITY, OR ANTICIPATED

PROFITS OR LOST BUSINESS. The information contained in the publication does not purport to contain all matters relevant to any particular investment or financial instrument

and all statements as to future matters are not guaranteed to be accurate. Anyone proposing to rely on or use the information contained in the publication should independently

verify and check the accuracy, completeness, reliability and suitability of the information and should obtain independent and specific advice from appropriate professionals or

experts regarding information contained in the publication. Further, references to any financial instrument or investment product is not intended to imply that an actual trading

market exists for such instrument or product. In publishing this document Emirates NBD is not acting in the capacity of a fiduciary or financial advisor.

Emirates NBD and its group entities (together and separately, "Emirates NBD") does and may at any time solicit or provide commercial banking, investment banking, credit,

advisory or other services to the companies covered in its reports. As a result, recipients of this report should be aware that any or all of the foregoing services may at times give

rise to a conflict of interest that could affect the objectivity of this report.

The securities covered by this report may not be suitable for all types of investors. The report does not take into account the investment objectives, financial situations and specific

needs of recipients.

Data included in the publication may rely on models that do not reflect or take into account all potentially significant factors such as market risk, liquidity risk and credit risk.

Emirates NBD may use different models, make valuation adjustments, or use different methodologies when determining prices at which Emirates NBD is willing to trade financial

instruments and/or when valuing its own inventory positions for its books and records. In receiving the publication, you acknowledge and agree that there are risks associated with

investment activities. Moreover, you acknowledge in receiving the publication that the responsibility to obtain and carefully read and understand the content of documents relating

to any investment activity described in the publication and to seek separate, independent financial advice if required to assess whether a particular investment activity described

herein is suitable, lies exclusively with you. You acknowledge and agree that past investment performance is not indicative of the future performance results of any investment and

that the information contained herein is not to be used as an indication for the future performance of any investment activity. You acknowledge that the publication has been

developed, compiled, prepared, revised, selected, and arranged by Emirates NBD and others (including certain other information sources) through the application of methods and

standards of judgment developed and applied through the expenditure of substantial time, effort, and money and constitutes valuable intellectual property of Emirates NBD and

such others. All present and future rights in and to trade secrets, patents, copyrights, trademarks, service marks, know-how, and other proprietary rights of any type under the

laws of any governmental authority, domestic or foreign, shall, as between you and Emirates NBD, at all times be and remain the sole and exclusive property of Emirates NBD

and/or other lawful parties. Except as specifically permitted in writing, you acknowledge and agree that you may not copy or make any use of the content of the publication or any

portion thereof. Except as specifically permitted in writing, you shall not use the intellectual property rights connected with the publication, or the names of any individual

participant in, or contributor to, the content of the publication, or any variations or derivatives thereof, for any purpose.

YOU AGREE TO USE THE PUBLICATION SOLELY FOR YOUR OWN NONCOMMERCIAL USE AND BENEFIT, AND NOT FOR RESALE OR OTHER TRANSFER OR

DISPOSITION TO, OR USE BY OR FOR THE BENEFIT OF, ANY OTHER PERSON OR ENTITY. YOU AGREE NOT TO USE, TRANSFER, DISTRIBUTE, OR DISPOSE OF

ANY DATA/INFORMATION CONTAINED IN THE PUBLICATION IN ANY MANNER THAT COULD COMPETE WITH THE BUSINESS INTERESTS OF EMIRATES NBD. YOU

MAY NOT COPY, REPRODUCE, PUBLISH, DISPLAY, MODIFY, OR CREATE DERIVATIVE WORKS FROM ANY DATA/INFORMATION CONTAINED IN THE PUBLICATION.

YOU MAY NOT OFFER ANY PART OF THE PUBLICATION FOR SALE OR DISTRIBUTE IT OVER ANY MEDIUM WITHOUT THE PRIOR WRITTEN CONSENT OF EMIRATES

NBD. THE DATA/INFORMATION CONTAINED IN THE PUBLICATION MAY NOT BE USED TO CONSTRUCT A DATABASE OF ANY KIND. YOU MAY NOT USE THE

DATA/INFORMATION IN THE PUBLICATION IN ANY WAY TO IMPROVE THE QUALITY OF ANY DATA SOLD OR CONTRIBUTED TO BY YOU TO ANY THIRD PARTY.

FURTHERMORE, YOU MAY NOT USE ANY OF THE TRADEMARKS, TRADE NAMES, SERVICE MARKS, COPYRIGHTS, OR LOGOS OF EMIRATES NBD OR ITS

SUBSIDIARIES IN ANY MANNER WHICH CREATES THE IMPRESSION THAT SUCH ITEMS BELONG TO OR ARE ASSOCIATED WITH YOU OR, EXCEPT AS OTHERWISE

PROVIDED WITH EMIRATES NBD’S PRIOR WRITTEN CONSENT, AND YOU ACKNOWLEDGE THAT YOU HAVE NO OWNERSHIP RIGHTS IN AND TO ANY OF SUCH

ITEMS. MOREOVER YOU AGREE THAT YOUR USE OF THE PUBLICATION IS AT YOUR SOLE RISK AND ACKNOWLEDGE THAT THE PUBLICATION AND ANYTHING

CONTAINED HEREIN, IS PROVIDED "AS IS" AND "AS AVAILABLE," AND THAT EMIRATES NBD MAKES NO WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, AS TO

THE PUBLICATION, INCLUDING, BUT NOT LIMITED TO, MERCHANTABILITY, NON-INFRINGEMENT, TITLE, OR FITNESS FOR A PARTICULAR PURPOSE OR USE. You

agree, at your own expense, to indemnify, defend and hold harmless Emirates NBD, its Suppliers, agents, directors, officers, employees, representatives, successors, and

assigns from and against any and all claims, damages, liabilities, costs, and expenses, including reasonable attorneys’ and experts’ fees, arising out of or in connection with the

publication, including, but not limited to: (i) your use of the data contained in the publication or someone using such data on your behalf; (ii) any deletions, additions, insertions or

alterations to, or any unauthorized use of, the data contained in the publication or (iii) any misrepresentation or breach of an acknowledgement or agreement made as a result of

your receiving the publication.

Emirates NBD Research & Treasury Contact List

Emirates NBD Head Office 12thFloor Baniyas Road, Deira P.OBox777 Dubai

Aazar Ali Khwaja

Group Treasurer & EVP Global Markets & Treasury +971 4 609 3000 [email protected]

Tim Fox

Head of Research & Chief Economist +9714 230 7800 [email protected]

Research

Khatija Haque

Head of MENA Research +9714 230 7803 [email protected]

Jean Paul Pigat

Senior Economist +9714 230 7807 [email protected]

Aditya Pugalia

Analyst +9714 230 7802 [email protected]

Anita Yadav

Head of Fixed Income Research +9714 230 7630 [email protected]

Athanasios Tsetsonis

Sector Economist +9714 230 7629 [email protected]

Edward Bell

Commodity Analyst +9714 230 7701 [email protected]

Sales & Structuring

Group Head – Treasury Sales

Tariq Chaudhary +971 4 230 7777 [email protected]

Saudi Arabia Sales

Numair Attiyah +966 11 282 5656 [email protected]

Singapore Sales

Supriyakumar Sakhalkar +65 65785 627 [email protected]

London Sales

James Symington +44 (0) 20 7838 2240 [email protected]

Egypt

Samy Safwat +20 22 726 5050 [email protected]

Group Corporate Affairs

Ibrahim Sowaidan

+9714 609 4113 [email protected]

Claire Andrea


Investor Relations

Patrick Clerkin


monthly insights - emirates nbd · head of research & 3 +971 4 230 7800...

Documents