GCC Daily Market Update - 8 March

Transcription

1. March 8 , 2020 ECONOMIC UPDATE & NEWS 50.9 US FOMC Rate Decision 1.50% 1.25% 1.75% US MBA Mortgage Applications Feb-28th -- 15.10% 1.50% Canada BoC Rate Decision Mar-04th 1.50% 1.25% 1.75% Russia Gold and Forex Reserve Feb-28th -- 570.0b 563.1b US Initial Jobless Claims Feb-29th 215k 216k 219k US Durable Goods Orders Jan F (0.20%) (0.20%) (0.20%) Germany Factory Orders MoM Jan 1.30% 5.50% (2.10%) Russia CPI YoY Feb 2.20% 2.30% 2.40% US Change in Nonfarm Payrolls Feb 175k 273k 273k Canada Unemployment Rate Feb 5.60% 5.60% 5.50% Source: Bloomberg GLOBAL NEWS    The World Bank has provided an emergency funding worth USD 12.0bn to assist nations dealing with the health and economic impacts of the coronavirus virus outbreak. (Source: Reuters) 2.00 1.65 1.30 0.95 0.76 0.60 02-Mar 50.1 24-Feb 50.5 Mar-03rd 17-Feb Feb UST 10yr Yield 10-Feb 49.7 03-Feb 49.8 27-Jan 49.7 20-Jan Feb F 13-Jan ISM Manufacturing Prior 06-Jan US Actual 30-Dec Markit Manufacturing PMI Survey 23-Dec France Period 16-Dec Event 09-Dec Region Source: Bloomberg  The UAE’s Minister of State for Financial Affairs said that the nation’s GDP in constant prices is forecasted to grow by 2.5% YoY to AED 1.5tn (USD 408.3bn) in 2020. (Source: Emirates News Agency)  Dubai’s non-oil foreign trade grew 5.5% YoY to AED 1.4tn (USD 373.3bn) in 2019, as per Government of Dubai Media Office. (Source: Moody’s said that advanced economies including the US, Japan, Germany, Italy, France, the UK and Korea could enter a recession in an “adverse scenario” in 2020. (Source: Reuters)  OPEC and its allies were unsuccessful in reaching a deal on oil production cuts, after Russia denied to tighten supply to counter the effects of the coronavirus outbreak. (Source: The New York Times) Saudi Arabia’s real GDP grew by 0.3% YoY in 2019 driven by 3.3% YoY increase in non-oil sector, partly offset by 3.6% YoY decline in the oil sector, as per General Authority for Statistics. (Source: Reuters)  Saudi Arabia witnessed 0.6% QoQ decline in the number of private and public sector employees to 8.5mn in Q3-19, according to Saudi General Authority for Statistics. (Source: Zawya) Trade Arabia)  The US President has signed an emergency spending bill worth USD 8.3bn to increase the nation’s response to the virus. (Source: Reuters)   US Fed announced its first emergency rate cut since the financial crisis of 2008. The central bank cut its rates by 50 bps, citing the potential consequences of the coronavirus on the US economy. (Source: CNN) Saudi Arabian banks increased their investments in treasury bonds by 0.8% MoM to SAR 386.7bn (USD 103.0bn) in January-20, according to Saudi Arabian Monetary Authority. (Source: Asharq Al Awsat)  S&P Global Ratings has cut its US GDP growth projections for Q1-20 to 1.0% compared to its earlier projections of 2.2%, with a recovery in subsequent quarters. (Source: Reuters) Moody’s downgraded Oman’s credit rating to 'Ba2' from 'Ba1' and changed the outlook to stable, citing higher government debt and weaker debt affordability metrics. (Source: Reuters)  The European Commission announced that the 2020 Euro zone growth is likely to be slower than the 1.2% estimate made in mid-February-20 due to the negative effects of the coronavirus. (Source: Reuters) Bahrain witnessed a 19.6% YoY increase in the value of imports to BHD 445.0mn (USD 1.2bn) during January-20, as per Information & eGovernment Authority. (Source: Bahrain News Agency)  Moody's Investors Service expects the outlook for Kuwait's banking system to remain stable as strong economic growth will support credit conditions. (Source: Zawya)    Bank of Japan Governor announced that the central bank will take the necessary steps such as offering adequate liquidity via market operations and asset purchases to stabilize the markets. (Source: Reuters)  China’s Financial Ministry official said that the nation’s governments at all level had allocated CNY 108.8bn (USD 15.6bn) in special funds by 2nd March-20 to control the coronavirus epidemic. (Source: Financial Post) GCC NEWS QATAR NEWS  Qatar's trade surplus decreased by 12.4% YoY to QAR 12.5bn (USD 3.4bn) in January-20, according to the Planning and Statistics Authority (PSA). (Source: Gulf Times)  Credit provided by commercial banks to the general trade sector saw a huge growth of 62.1% YoY to QAR 146.9bn (USD 40.0bn), accounting for 15.0% of the total domestic loans in January-20. (Source: Gulf Times)  Central banks of all GCC nations excluding Oman have lowered their interest rates by 50 bps, in line with the US Fed rate cut. (Source: Reuters)  GCC region is forecasted to see a 26.0% growth in the number of Ultra High Net Worth Individuals over the next five years to more than 9,100, as per real estate consultancy firm, Knight Frank. (Source: Zawya)  Qatar witnessed 3.2% YoY decline in the Producers' Price Index (PPI) in January-20, led by 1.9% YoY decline in manufacturing index, according to PSA. (Source: Mena Fn)  UAE witnessed a 0.3% YoY increase in the total number of business licenses issued to 678,573 in February-20, according to the Ministry of Economy. (Source: Emirates News Agency)  The value of bilateral trade between Qatar and the US grew by 37.4% YoY to QAR 30.0bn (USD 8.2bn) in 2019, according to US Census Bureau. (Source: Peninsula Qatar)  The UAE witnessed a 2.0% YoY rise in the number of people employed in the non-government sector in December-19 to more than 5.0mn in Q4-19, according to the UAE Central Bank data. (Source: Zawya)  The value of bilateral trade between Qatar and the UK grew by 21.0% YoY to GBP 6.7bn (USD 8.6bn) in 2019, as per the UK’s Trade Commissioner for the Middle East. (Source: Gulf Times) 1
2. March 8 , 2020 EQUITY Index Price S&P 500 WTD %Δ MTD %Δ YTD %Δ Index Price WTD %Δ 2,972.4 0.6 0.6 (8.0) MSCI EM 25,864.8 1.8 1.8 (9.4) MSCI GCC Nasdaq 8,530.3 0.8 0.8 (2.3) FTSE 100 6,462.6 (1.8) (1.8) DAX 30 11,541.9 (2.9) CAC 40 5,139.1 (3.2) 109,600.5 MTD %Δ YTD %Δ 1,012.1 0.7 0.7 (9.2) 505.0 (2.8) (2.8) (11.4) Dow Jones Islamic 4,028.9 1.2 1.2 (6.3) (14.3) KSA (TASI) 7,467.5 (2.1) (2.1) (11.0) (2.9) (12.9) UAE (DFM) 2,460.5 (5.0) (5.0) (11.0) (3.2) (14.0) UAE (ADX) 4,643.1 (5.3) (5.3) (8.5) 3.4 3.4 (4.2) Qatar (DSM) 9,309.4 (1.9) (1.9) (10.7) 20,749.8 (1.9) (1.9) (12.3) Kuwait (KSE) 5,788.0 (4.7) (4.7) (7.9) Sh. Comp 3,034.5 5.4 5.4 (0.5) Bahrain (BAX) 1,617.8 (2.6) (2.6) 0.5 Hang Seng 26,146.7 0.1 0.1 (7.2) Oman (MSM) 4,107.8 (0.6) (0.6) 3.2 Sensex 37,576.6 (1.9) (1.9) (8.9) Jordan (ASEGI) 1,808.8 (1.5) (1.5) (0.4) DJIA BIST 100 Nikkei Source: Bloomberg GLOBAL INDICES Weekly Performance (%) Sh. Comp BIST 100 DJIA Nasdaq MSCI EM S&P 500 Hang Seng FTSE 100 Nikkei Sensex DAX 30 CAC 40 YTD Performance (%) Sh. Comp Nasdaq BIST 100 Hang Seng S&P 500 Sensex MSCI EM DJIA Nikkei DAX 30 CAC 40 FTSE 100 5.4 3.4 1.8 0.8 0.7 0.6 0.1 (1.8) (1.9) (1.9) (2.9) (3.2) (5.0) 0.0 5.0 (0.5) (2.3) (4.2) (7.2) (8.0) (8.9) (9.2) (9.4) (12.3) (12.9) (14.0) (14.3) (22.0) 10.0 Source: Bloomberg (12.0) (2.0) 3.2 5.0 Qatar The QE index fell 1.9% in the last week. Selling pressure on the part of domestic retail and foreign institutional investors weighed on the benchmark. Trade turnover and volume increased, with Banking & Financial Services, Consumer Goods & Services and Real Estate sectors together accounting for about 68.6% of the total traded volume. Out of the total 47 listed stocks, 18 advanced, 28 declined and 1 remained unchanged. 8.0 YTD Performance (%) 1.2 Oman (MSM) Qatar (DSM) UAE (DFM) (2.8) (8.5) Qatar (DSM) (10.7) KSA (TASI) (11.0) UAE (DFM) (11.0) (4.7) (5.0) MSCI GCC (11.4) UAE (ADX) (5.3) (6.0) (7.9) UAE (ADX) (2.6) MSCI GCC Kuwait (KSE) (6.3) Kuwait (KSE) (2.1) Bahrain (BAX) 0.5 Dow Jones Islamic (1.9) KSA (TASI) Oman (MSM) Bahrain (BAX) (0.6) (4.0) (2.0) 0.0 (15.0) 2.0 Source: Bloomberg (10.0) Global markets ended on a mixed note in the last week. Rising cases of coronavirus across various geographies was offset by increasing bets that global central banks would offer support to offset the impact of the virus. All the three major US benchmarks ended higher in an unusually high volatile week. All major benchmarks declined in the middle of the week, despite an unexpected rate cut from the US Fed. Gains in the S&P 500 index were largely driven by buying activity in defensive shares like Utilities and Consumer Staples. Healthcare stocks inched higher, after Joe Bidden won the majority of Super Tuesday votes. The Stoxx Europe 600 index continued to end lower (-2.4%). Italian shares were among the notable losers as the nation remains the epicenter for virus outbreak in the region. The Shanghai Composite rose 5.4%, on the back of greater policy support provided by the Chinese government. Most GCC markets ended lower in the previous week, despite a series of rate cuts introduced by regional central banks. The Saudi Arabian index decreased by 2.1%, after the government suspended the local public from performing Umrah pilgrims. Dubai’s benchmark declined by 5.0% last week, as increased selling in Transportation and Consumer Staples & Discretionary stocks weighed on the market. Abu Dhabi’s benchmark declined by 5.3%, amid losses in Banking stocks and Telecommunication stocks. GCC INDICES Dow Jones Islamic Global GCC Source: Bloomberg Weekly Performance (%) Commentary (5.0) 0.0 Source: Bloomberg Indicator Price 10,800 DSM INDEX Last Close 9,309.4 10,350 MAVG 50 10,194.6 MAVG 100 10,247.5 MAVG 200 10,269.2 6 Month High 10,712.9 6 Month Low 9,215.8 RSI (14 Days) 24.9 9,900 9,309.4 9,450 9,000 Sep-19 Oct-19 Index Nov-19 50 SMA Dec-19 100 SMA Jan-20 Mar-20 200 SMA Source: Bloomberg 2
3. March 8 , 2020 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 3.50 3.00 2.46 2.44 3.85 2.63 2.43 4.00 2.50 3.05 3.39 3.15 3.00 2.00 1.29 1.50 1.00 4.74 5.00 3.01 0.61 0.51 0.56 2 Yrs 3 Yrs Current 2.96 2.00 0.76 1.00 0.50 2.18 1.87 1.51 1.47 2 Yrs 3 Yrs Current 0.00 0.00 5 Yrs 10 Yrs Last Year 30 Yrs Source: Bloomberg 10 Yrs Last Year 30 Yrs Source: Bloomberg Qatar Govt. Int. Bonds CDS 5 Years CDS 5 Yrs Price (BPS) WTD Δ (BPS) MTD Δ (BPS) YTD Δ (BPS) Global Maturity Price (USD) Z Spread (BPS) Yield (%) WTD Δ (USD) YTD Δ (USD) QGIB 2021 101.1 77.5 1.33 0.4 0.8 Qatari Diar 2020 101.3 62.5 1.19 (0.0) (0.4) US 19.3 0.3 0.3 3.9 QGIB 2022 105.6 78.1 1.37 0.5 0.7 UK 23.8 0.5 0.5 1.3 QGS 2023 104.8 84.7 1.45 0.8 1.2 5.5 QGIB 2023 107.2 83.7 1.47 0.9 1.5 QGIB 2024 107.0 87.2 1.54 1.2 2.2 Germany 15.6 4.4 4.4 France 23.7 4.7 4.7 3.9 QGIB 2026 108.6 101.6 1.75 1.9 3.2 Italy 166.4 5.7 5.7 40.8 QGIB 2028 119.1 115.1 1.93 2.3 4.4 Greece 194.5 9.3 9.3 79.5 QGIB 2029 116.7 115.4 1.97 2.5 5.0 QGIB 2030 169.7 132.7 2.13 3.1 5.1 QGIB 2040 155.3 184.5 2.75 4.8 9.8 QGIB 2042 148.1 186.7 2.78 4.8 11.1 Russia 112.9 28.8 28.8 56.4 Japan 26.3 1.2 1.2 4.0 Turkey 397.5 27.4 27.4 108.0 QGIB 2046 131.4 196.7 2.90 4.7 10.0 Brazil 146.2 16.2 16.2 44.6 QGIB 2048 140.3 204.1 2.97 5.3 11.8 QGIB 2049 136.1 201.8 2.95 6.1 12.5 Egypt 325.6 (23.1) (23.1) 34.1 Abu Dhabi 56.4 5.6 5.6 18.7 Bahrain 200.2 (15.9) (15.9) 14.0 Dubai 134.8 10.7 10.7 38.1 GCC Qatar Saudi Arabia Source: Bloomberg, QCB US Swap Rates 63.0 98.9 7.4 14.7 7.4 14.7 24.6 40.5 Tenor Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 0.999 (0.464) (0.910) 6M LIBOR 0.975 (0.423) (0.938) 12M LIBOR 0.944 (0.437) (1.052) 2 years 0.644 (0.341) (1.061) 5 years 0.737 (0.244) (0.994) International Credit Spreads 10 years 0.842 (0.277) (1.062) iTraxx Europe 30 years 0.957 (0.344) (1.136) 79.8 15.5 15.5 35.7 Source: Bloomberg iTraxx Europe Crossover 380.5 82.6 82.6 174.1 CDX North America IG 80.8 14.2 14.2 35.6 CDX North America HY 441.0 63.3 63.3 161.2 iTraxx Europe Senior Financial 36.6 10.0 10.0 30.6 iTraxx Europe Sub Financial 191.0 35.4 35.4 78.4 Commentary The US 10-year bond yield fell in the past week, witnessing its biggest drop since December 2008. The fall was on the back of increased probabilities that the US Fed would introduce additional stimulus measures after an unexpected rate cut announced earlier in the week. The UK 10-year gilt yields declined by more than 20 bps, as fears over coronavirus and increased chances of rate cut from the Bank of England increased demand for the safe haven assets. Similarly, German bund yields fell, despite encouraging domestic economic data. Source: Bloomberg 3
4. March 8 , 2020 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 45.3 WTI Crude (USD/bbl) 41.3 Brent and WTI prices declined in the last week, as OPEC failed to convince Russia to participate in production cuts to arrest the downfall in prices. Prices also dropped after OPEC trimmed its demand outlook for crude oil in 2020. Gold prices ended above the psychological USD 1,600 mark. Continued fears of the coronavirus increased appetite for safe haven assets. Natural gas prices increased last week, after China’s top gas importer, PetroChina imposed force majeure on gas imports. Copper prices ended slightly higher, amid reports that factories are resuming production in China and stimulus measures by the Chinese government revived the demand outlook for the industrial metal. Natural Gas (USD/mmBTU) 1.7 Gold (USD/t oz.) 1,672.4 Silver (USD/t oz.) 17.2 Copper (USD/lb) 257.3 Source: Bloomberg Weekly Performance (%) YTD Performance (%) Gold Gold 6.7 Silver Natural Gas Brent (7.8) Brent WTI Crude (10.4) (15.0) (10.0) (5.0) 0.0 (8.0) Natural Gas 1.1 WTI Crude (3.9) Copper 1.4 Copper 9.8 Silver 5.0 5.0 10.0 (22.0) (31.4) (32.4) (40.0) Source: Bloomberg (30.0) (20.0) (10.0) 0.0 10.0 20.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.3078 USD/INR 73.2825 EUR/USD 1.1314 USD/CNY 6.9329 CAD/USD 0.7453 USD/TRY 6.0916 AUD/USD 0.6636 USD/EGP 15.6363 NZD/USD 0.6350 USD/ZAR 15.6790 105.3900 USD/RUB 68.5513 USD/JPY Commentary The US dollar decreased against a basket of six currencies in the last week and ended lower by 2.2% at 95.9. The dollar weakened, on the back of emergency rate cut by US Fed two weeks ahead of its policy meeting. The GBP increased, on the back of better than anticipated domestic construction and services PMI data for February-20. The JPY and CHF increased, amidst safe haven buying on the part of investors. The CAD declined, after the Bank of Canada slashed its lending rate and kept the doors for additional easing open. The AUD increased against the greenback, despite the Reserve Bank of Australia reducing the cash rate to a historic low of 0.5%. Source: Bloomberg Weekly Performance (%) JPY TRY EUR AUD GBP NZD CNY ZAR EGP CAD INR RUB YTD Performance (%) 2.5 2.4 2.3 1.9 1.8 1.7 0.9 (0.1) (0.2) (0.2) (2.1) (2.4) (3.0) Source: Bloomberg (2.0) (1.0) 0.0 1.0 2.0 3.0 JPY EGP EUR CNY GBP TRY CAD INR AUD NZD RUB (9.5) ZAR (10.7) (12.0) (10.0) 3.0 2.6 0.6 0.4 (1.6) (2.4) (3.2) (3.8) (5.5) (5.8) (8.0) (6.0) (4.0) (2.0) 0.0 2.0 4.0 Source: Bloomberg DISCLAIMER It is understood that any opinions expressed by Commercial Bank or its affiliates as to the commentary, market information, and future direction of prices of specific securities reflects the views of the individual analyst who issued them, and not necessarily represent the views of Commercial Bank or its affiliates in any way. In no event shall CBQ or its affiliates have any liability for any direct or indirect losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this materials or for any delays, inaccuracies, errors in, or omissions of the said information. 4