weekly market review...germany lowered 2016 growth forecast to 1.7% cac 40vs. 1.8% earlier in the...

Weekly Market Review January 24, 2016 – January 30, 2016

January 31, 2016

Page I 2

CONTENTS

International Equity Markets

GCC Equities

Currencies

Commodities

Interest Rates

Equity Markets - Top Most & Bottom Most

Commodity Markets - Top Most & Bottom Most

Page I 3

Americas

US GDP growth slowed to 0.7% in 4Q2015 vs. 2.0% in 3Q2015 as the pace of consumer spending growth slowed

Conference Board’s US consumer confidence index climbed to 98.1 in Jan from a downwardly revised 96.3 in Dec

New home sales jumped above expectations by 10.8% in Dec, reflecting strength across most of the US

Brazil’s president is reportedly seeking to release $15bn into the economy to help lift the country out of recession

Mexico’s economy expanded 0.6% QoQ in 4Q2015, below 0.8% growth of 3Q2015 but above 0.5% growth forecast

Europe

Eurozone consumer prices rose 0.4% YoY in Jan, faster than 0.2% increase in Dec despite decline in energy prices

European Commission’s Eurozone economic confidence index fell to 105 in Jan from 106.7 in Dec, lowest since Aug

Germany lowered 2016 growth forecast to 1.7% vs. 1.8% earlier in the backdrop of an emerging market slowdown

French GDP grew a bit slower at 0.2% QoQ in 4Q2015 vs. 0.3% in 3Q2015 due to weak household spending & trade

UK GDP edged up 0.5% sequentially in 4Q2015, slightly faster than 0.4% expansion recorded in 3Q2015

Rest of the World

World Bank slashed 2016 crude oil prices forecast by $14 to $37 per barrel amid growing supply & weak demand

China’s industrial enterprises profit declined 4.7% YoY in Dec, worse than the 1.4% decrease recorded in Nov

Japan’s Dec retail sales fell for 2nd straight month by 1.1% YoY, indicating 4Q2015 economic growth will be subdued

Exports fell 8% YoY in Dec, marking the biggest drop since Sep 2012 hit by a slowing emerging nations

India revised down FY2015 & FY2014 growth rate to 7.2% & 6.6% from earlier 7.3% & 6.9%, respectively

South Korea’s 4Q2015 GDP grew 0.6% (seasonally adjusted), as per expectations following a 1.3% growth in 3Q2015

Malaysia trimmed 2016 growth expectations to 4-4.5% from 5% earlier as falling oil hurts exports, govt. revenue

The IMF cut 2016 UAE growth forecast to 2.6% from 3.1% on falling oil prices, slowing China and spending cuts

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 1,940.24 1.75 -5.07 16.05 2.27

DJI 16,466.30 2.32 -5.50 14.87 2.71

Nasdaq Comp 4,613.95 0.50 -7.86 19.20 1.37

Euro Stoxx 600 342.27 1.16 -6.44 14.80 3.65

FTSE 100 6,083.79 3.11 -2.54 15.50 4.35

Dax 9,798.11 0.34 -8.80 12.11 3.06

CAC 40 4,417.02 1.85 -4.75 13.98 3.39

Nikkei 225 17,518.30 3.30 -7.96 17.11 1.83

Hang Seng 19,683.11 3.16 -10.18 9.81 4.40

Brazil - Bovespa

40,405.99 6.24 -6.79 10.33 4.83

Russia - Micex 1,784.92 3.90 1.34 5.96 4.71

BSE Sensex 24,870.69 1.78 0.00 17.50 1.49

Shanghai Comp 2,737.60 -6.14 -22.65 11.17 2.25

Source: Bloomberg, Mashreq Private Banking

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UAE

Arabtec Holding-TAV Construction JV secured $1.1bn contract to build Bahrain International Airport’s new terminal

National Bank of Abu Dhabi’s 4Q2015 net profit fell 24.5% YoY to AED1.04bn; BoD proposes AED0.4/share dividend

Aabar Investments reportedly seeks to borrow $2.5bn from banks to refinance a loan due in Apr 2016

Emirates Airline plans to add 37 new planes, worth list price of $14.5bn, to its fleet in the fiscal year beginning Apr

Dubai Islamic Bank’s 4Q2015 net income surged 62.8% YoY to AED1.15bn; BoD proposes AED0.45/share dividend

Abu Dhabi National Insurance Company confirmed that it is planning to boost its capital by AED390mn

Mashreq Bank’s 4Q2015 net profit slid 13.7% YoY to AED556.2mn. FY2015 net profit remained flat at AED2.4bn

Union Properties is in talks for AED750mn worth credit facilities to fund construction of new real estate projects

Saudi Arabia

Saudi Capital Market Authority’s board approved Almarai Co’s request to increase its capital by SAR2bn to SAR8bn

South Korea’s S-Oil Corp. agreed to sell oil products worth $1.12bn to Saudi Arabian Oil Company’s trading arm

Sahara Petrochemical Company signed a SAR300mn working capital financing agreement with Riyad Bank

Gulf Union Cooperative Insurance Company’s BoD proposed capital reduction by around 40.9% to SAR130mn

Rest of the GCC

Kuwait Petrol. Corp. mulls selling bonds to finance $100bn planned investment over next 5 yrs. to boost oil output

Viva Kuwait’s 4Q2015 net profit edged down 9.0% YoY to KWD10.1mn; BoD recommended dividend freeze

United Finance’s FY2015 net profit rose 6.0% to OMR5.24mn; BoD proposes 10% cash, 5% stock dividend

Commercial Bank of Qatar’s FY2015 net profit dipped 24.2% to AED1.43bn; BoD proposes QAR3/share dividend

Qatar Intnl. Islamic Bank’s FY2015 net profit slipped 5.0% to QAR784.2mn; BoD proposes QAR4/share dividend

National Bank of Bahrain’s FY2015 net income inched up 3.4% to BHD55.3mn; BoD proposes dividend, bonus

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

Dubai 2,857.24 8.97 -9.32 7.96 4.10

Abu Dhabi 3,910.44 4.64 -9.21 8.59 5.86

Saudi Tadawul 5,879.98 7.62 -14.93 10.79 4.32

Qatar Index 9,272.01 8.01 -11.10 10.24 5.50

Kuwait Index 5,010.39 1.30 -10.77 – 5.04

Oman MSM 30 5,016.51 3.07 -7.21 8.77 5.21

Bahrain All Share

1,171.63 0.53 -3.64 – 5.87

Egypt EGX 30 5,986.78 4.79 -14.55 4.64 2.37

Istanbul 100 Index

73,481.09 4.61 2.45 8.42 3.39

Source: Bloomberg, Mashreq Private Banking; *Current

DFMGI – 1 year performance Saudi Tadawul – 1 year performance

GCC EQUITIES


Page I 5

Euro strengthened 0.32% against US dollar in the week ended Jan 29 as the latest Eurozone’s consumer price index (CPI) figures showed inflation accelerated for a second month in January

Canadian dollar gained 1.0% with respect to the US dollar this week, helped by a rally in crude oil prices, and as the Bank of Japan rate cut into negative territory boosted global asset markets

Japanese yen depreciated 1.99% against US dollar during the past five days after the Bank of Japan Governor Haruhiko Kuroda unexpectedly adopted negative interest rates, risking another round of competitive devaluations

Offshore yuan ticked up 0.3% this week to 6.5936 per US dollar after a Society for Worldwide Interbank Financial Telecommunications’ report showed yuan’s share of global payments climbed to 2.31% in Dec from 2.28% in Nov, and as Chinese official media stressed the nation is not headed for a hard landing

Brazilian real ended the week gaining 2.3% with respect to the US dollar after the Bank of Japan unexpectedly cut a benchmark interest rate below zero, fostering demand for high-yielding assets

Russian ruble appreciated ~3.3% since Jan 22 against the US dollar, reacting to the rising crude oil prices as Brent closed the week reaching above $34 per barrel

Indian rupee slipped 0.2% against US dollar during the week on persistent dollar demand from banks and importers despite lower greenback overseas after the US Federal Reserve kept interest rates unchanged

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

USD Index 99.6060 0.03 1.36 0.99 5.07

EUR/USD 1.0831 0.32 -0.93 -0.29 -4.07

GBP/USD 1.4244 -0.15 -3.86 -3.34 -5.42

USD/JPY 121.1400 1.99 0.51 0.77 3.11

USD/CHF 1.0231 0.69 3.47 2.10 11.18

USD/CAD 1.3976 -1.01 0.69 0.99 9.77

USD/BRL 3.9992 -2.31 1.05 0.97 49.06

USD/RUB 75.5466 -3.29 3.17 4.17 8.75

USD/INR 67.7925 0.24 2.12 2.48 9.57

USD/CNY 6.5760 -0.04 1.33 1.27 5.21

USD/AUD 1.4117 -1.15 2.87 2.87 9.69

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


CURRENCIES


Page I 6

US West Texas Intermediate (WTI) & Brent crude futures gained for a 2nd week, rising 4.4% & ~8.0%, respectively amid speculation that OPEC and Russia will meet to discuss trimming crude production to bolster prices

Spot gold prices edged up 1.8% during the week, aided by dovish comments from the US Federal Reserve and release of data showing US economic growth braked sharply in 4Q2015

The London Metal Exchange (LME) zinc futures jumped ~7.5% in the week ended Jan 29 after data showed China’s zinc imports surged by 440% in December

Spot platinum prices climbed ~4.7% this week after a World Platinum Investment Council report said the market will stay in a shortage in the next six years as supplies remain constrained amid growing or robust demand from jewelers and car companies

The LME copper futures rose ~2.7% during the past five days as traders took heart from stabilizing oil prices, solid China imports despite a slowing economy, and stockpiling ahead of the Lunar New Year

The Intercontinental Exchange (ICE) raw sugar futures slumped ~8.9% this week, recording its deepest drop since Sep 2011, after strong technical sell signals spurred heavy speculative liquidation

Baltic dry index plunged ~10.5% from Jan 22 reaching a new low, hit by an overcapacity of ships, the slowdown in Chinese demand for building materials, weakness in crude oil, and declining commodity prices


Brent – ICE 34.74 7.96 -4.72 -6.81 -34.44

WTI – Nymex 33.62 4.44 -8.14 -9.23 -30.31

Gold Spot 1,118.17 1.84 5.34 5.35 -12.90

Silver Spot 14.26 1.72 2.65 2.91 -17.35

Copper - CMX 206.70 3.22 -3.70 -3.19 -17.14

S&P GSCI Spot Index

300.67 3.61 -2.73 -3.52 -22.84

Baltic Dry Index 317.00 -10.45 -33.68 -33.68 -47.86

WTI Crude – 1 year performance GOLD – 1 year performance


COMMODITIES


Page I 7

The 10-year US bond yield fell 13.1 basis points (bps) this week to 1.92% after the Federal Reserve opted not to hike interest rates at its Jan meeting and gave no indication that it was changing course on its rate-hiking path ahead

German 10-year bund yield tumbled ~16 bps this week to 0.33% as turmoil in financial markets and the Bank of Japan’s adoption of negative interest rates fueled demand for the relative safety of fixed-income securities

The Bank of Japan’s (BoJ) policy board voted 5-4 on Jan 29 to apply -0.1% interest rate on current accounts that financial institutions maintain at the bank to achieve its 2% inflation at the earliest. The BoJ left its massive asset purchase program unchanged at an annual pace of around ¥80tn and cut 2016 inflation target to 0.8% from 1.4%

South African central bank raised its key repurchase rate by half a percentage point to 6.75% on Jan 28, a move aimed at stopping the free-fall of its currency and high inflation

The Bank of Russia held its benchmark interest rate at 11% on Jan 29, and warned that it expects the economy to shrink faster than it previously thought. On the future direction of rates, the central bank said it cannot rule out a tightening of policy if inflation risks amplify

Nigerian Monetary Policy Committee held the policy rate at 11% on Jan 26 after lowering it from a record 13% in Nov 2015, to help support an economy hit by plummeting oil prices, while ignoring calls to devalue the currency

New Zealand’s central bank held its official cash rate (OCR) at 2.5% on Jan 28 citing concerns over slowing economic growth and persistent low inflation


USD-10yr 1.92 -6.38 -16.66 -15.36 9.69

USD-2yr 0.77 -10.98 -29.09 -26.15 50.00

Fed Funds Rate 0.38 0.00 5.56 90.00 245.45

USD-3m Libor 0.62 -0.57 1.47 0.47 141.79

USD-6m Libor 0.87 0.09 3.88 2.32 141.90

German-10yr 0.33 -32.85 -48.33 -48.33 -9.47

UK-10yr 1.56 -8.83 -17.94 -20.41 9.78

Japan-10yr 0.10 -59.05 -63.88 -63.46 -66.90

AED-3m EIBOR 1.06 -0.04 0.56 0.09 55.93

AED-6m EIBOR 1.27 -0.74 2.66 3.99 50.64

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


INTEREST RATES


Page I 8

Ref Country Weekly Change Weekly Change

(USD Adj.)

1 China -6.14% -6.10%

2 Mongolia -3.63% -3.85%

3 Venezuela -2.31% -1.81%

4 Italy -1.95% -1.63%

5 Romania -1.70% -1.82%

6 Ukraine -1.14% -5.38%

7 Botswana -1.12% 0.14%

8 Malta -1.08% -0.76%

9 Zambia -0.84% -1.15%

10 Lebanon -0.69% -0.69%

Ref Country Weekly Change Weekly Change

(USD Adj.)

1 Argentina 9.45% 7.57%

2 Dubai−UAE 8.97% 8.97%

3 Qatar 8.01% 8.05%

4 Russia 7.80% 7.80%

5 Philippine 7.72% 7.64%

6 Saudi Arabia 7.62% 7.72%

7 Namibia 6.73% 10.61%

8 Brazil 6.24% 8.76%

9 Kazakhstan 5.23% 9.91%

10 Chile 4.94% 5.54%

WEEKLY

Ref Country YTD Change YTD Change (USD Adj.)

1 Tunisia 7.41% 6.77%

2 Jamaica 6.41% 5.43%

3 Slovakia 5.75% 5.45%

4 Latvia 3.76% 3.46%

5 Turkey 2.45% 1.14%

6 Colombia 1.85% -1.57%

7 Mauritius 1.76% 1.14%

8 Mexico 1.52% -4.32%

9 Thailand 1.01% 1.97%

10 Malta 0.93% 0.64%

YTD

Ref Country YTD Change YTD Change (USD Adj.)

1 China -22.65% -23.62%

2 Nigeria -16.50% -16.36%

3 Saudi Arabia -14.93% -14.84%

4 Egypt -14.55% -14.60%

5 Italy -12.89% -13.14%

6 Greece -12.44% -12.69%

7 Qatar -11.10% -11.06%

8 Kuwait -10.77% -10.83%

9 Romania -10.50% -11.29%

10 Hong Kong -10.18% -10.59%

EQUITY MARKETS - TOP MOST & BOTTOM MOST


Page I 9

Ref Commodity Weekly Change

1 Sugar -8.88%

2 Cocoa -3.86%

3 Cotton -2.11%

4 Nickel -0.92%

5 Aluminium -0.19%

6

7

8

9

10

Ref Commodity Weekly Change

1 Orange Juice 8.84%

2 Tin 8.47%

3 Brent Crude 7.96%

4 Zinc 7.48%

5 Gasoil 7.04%

6 Heat Oil 5.97%

7 Lead 4.85%

8 Platinum 4.68%

9 WTI Crude 4.44%

10 Lean Hogs 4.44%

WEEKLY

Ref Commodity YTD Pct Change

1 Lean Hogs 10.03%

2 Gold 5.35%

3 Rubber 4.41%

4 Corn 3.69%

5 Bean Meal 3.06%

6 Silver 2.91%

7 Tin 2.03%

8 Wheat 1.97%

9 Ethanol 1.86%

10 Soybeans 1.26%

YTD

Ref Commodity YTD Pct Change

1 Cocoa -14.01%

2 Sugar -13.78%

3 Gasoline -12.94%

4 Palladium -11.28%

5 WTI Crude -9.23%

6 Coffee -8.17%

7 Gasoil -6.82%

8 Brent Crude -6.81%

9 Lumber -6.68%

10 Natural Gas -6.33%

COMMODITY MARKETS - TOP MOST & BOTTOM MOST


Page I 10

IMPORTANT NOTICE

This report was prepared by the Private Banking Unit of Mashreqbank psc (“Mashreq”) in the United Arab Emirates (“U.A.E.”). Mashreq is regulated by the Central Bank of the U.A.E. This report is provided for informational purposes and private circulation only and should not be construed as an offer to sell or a solicitation to buy any security or any other financial instrument or adopt any hedging, trading or investment strategy. Prior to investing in any product, we recommend that you consult with a professional financial advisor, taking into consideration investment objectives, financial circumstances and tax implication. While based on information believed to be reliable, we do not guarantee and make no express or implied representation as to the accuracy of this report or complete description of the securities markets or developments referred to in this report. The information, opinions, forecasts (if any), assumptions or estimates contained in this report are as of the date indicated and are subject to change at any time without prior notice. The stated price of any securities mentioned in this report is as of the date indicated and is not a representation that any transaction can be effected at this price. The risks related to investment products described in this report are not all encompassing and investors should refer to the relevant investment offer document for detailed information and applicable terms and conditions. Investment products, including treasury products, are not guaranteed by Mashreq or any of its affiliates or subsidiaries unless stated otherwise and are subject to investment risk, including loss of principal. Investment products are not government insured. Past performance is not an indicator of future performance. US persons (US Citizens; US Green Card Holders; Resident Aliens subject to US income taxes for IRS purposes) are not eligible for any of the investment products introduced by Mashreq unless stated otherwise. This report is for distribution only under such circumstances as may be permitted by applicable law. Neither Mashreq nor its officers, directors or shareholders or other persons shall be liable for any direct, indirect, incidental or other damages including loss of profits arising in any way from the information contained in this report. This report is intended solely for the use by the intended recipients and the contents shall not be reproduced, redistributed or copied in whole or in part for any purpose without Mashreq’s prior express consent.

weekly market review...germany lowered 2016 growth forecast to 1.7% cac 40vs. 1.8% earlier in the...

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