GCC Weekly Market Report - 21 August

Transcription

1. WEEKLY WRAP August 21 , 2016 ECONOMIC UPDATE & NEWS Japan Industrial Production MoM Jun F -- 2.30% 1.90% UK CPI YoY Jul 0.50% 0.60% 0.50% Germany ZEW Current Situation Aug 50.2 57.6 49.8 Germany ZEW Survey Expectations Aug 2 0.5 -6.8 Jul 0.00% 0.00% 0.20% CPI MoM UK Jobless Claims Change EC CPI YoY US Russia Canada CPI YoY Jul 9.0k -8.6k 0.9k Jul F 0.20% 0.20% 0.10% Initial Jobless Claims Aug-13 265k 262k 266k Gold and Forex Reserve Aug-12 -- 395.7b 396.4b Jul 1.40% 1.30% 1.50% Source: Bloomberg GLOBAL NEWS     US PPI fell by 0.4% MoM in July-16, as prices for energy and services fell 1.0% MoM and 0.3% MoM respectively. (Source: CNBC) Minutes of US Fed’s July meeting showed that voting members are divided over interest rate hike and will require more economic data for arriving at a conclusion. (Source: Reuters) UK CPI rose to 0.6% in July-16 from 0.5% in June-16, mainly due to rising fuel prices, along with high prices of alcoholic drink and hotel rooms. (Source: BBC News) UK unemployment remained at 4.9% in Q2-16 unchanged from Q215, however people claiming unemployment benefits reduced by 8,600 against an anticipated increase of 9,500 in wake of Brexit. 1.90 1.80 1.70 1.60 1.50 1.40 1.30 1.20 Source: Bloomberg         UK construction output fell 0.9% MoM in Jun-16 followed by a fall of 2.1% MoM in May-16, due to uncertainty post Brexit. (Source: Irish Times) London property rents fell by 0.5% YoY in July-16, with landlords opting to rent out rather than sell houses in the wake of the UK's vote to leave EU. (Source: CNBC) Eurozone’s GDP expanded 0.3% QoQ and 1.6% YoY in Q2-16, mainly due to economic stagnation in France and Italy. (Source: Reuters) Eurozone’s trade surplus with the rest of the world rose to EUR 29.2bn in June-16 from EUR 25.5bn in June-15 on the back of falling imports. (Source: Economic Calendar) Moody’s has raised its economic growth forecasts for China to 6.6% for 2016 from 6.3%, due to significant fiscal and monetary stimulus policies implemented by Chinese government. (Source: CNBC) Japan posted a trade surplus of JPY 513.5bn in July-16 as stronger JPY has helped reduce costs for oil and gas imports. (Source: ABC News) Japanese industrial output was down by 1.5% in June-16. Two severe earthquakes in April-16 had hampered the production at many facilities in subsequent weeks. (Source: FT) India WPI rose to 3.55% in July-16 compared to 1.62% in June-16, as vegetables, pulses and sugar turned costlier. (Source: Deccan Chronicle)       Saudi Arabia's imports fell 20.3% YoY to SAR 45.5bn in May-16, while non-oil exports fell 0.4% YoY. (Source: Trade Arabia) Saudi Arabia ranks 16th globally in terms of gold reserves held with 333 tons owned in Q2-16. (Source: Mubasher) Resident debt levels in the UAE rose by 7.5% YoY in H1-16, due to rising education and utility bills. (Source: Arabian Business) Construction tenders and costs are projected to remain flat in the UAE in 2016 due to low cash availability. (Source: Trade Arabia) Peruvian gold exports to the UAE rose 155% YoY to USD 233mn in H1-16. Gold shipments reached more than 7 metric tons in H1-16. S&P has upgraded Abu Dhabi’s Aldar Properties long and short-term corporate credit ratings from BBB/A-3 to BBB/A-2 with a stable outlook. (Source: Arabian Business) Capital Intelligence has affirmed Oman’s Long-Term and Short-Term Foreign Currency and Local Currency Ratings at A- and A2 respectively, with negative outlook. (Source: CPI Financial) Oman's seafood export volumes jumped 42% YoY to 110,579 tons in 2015, as it got boost from sharp increase in fish landings. (Source: Muscat Daily)  The Central Bank of Oman has issued treasury bills worth OMR 85mn for a maturity period of 28 days. (Source: Mubasher) QATAR NEWS        GCC NEWS  Property investors in Abu Dhabi witnessed an average gross yield of 5% in Q2-16, despite the decline in sales and rental rates. (Source: Construction Week Online)  (Source: CNBC)  1.55 15-Aug 2.00% 08-Aug 0.20% 01-Aug 0.70% 25-Jul 2Q P 18-Jul GDP Annualized SA QoQ UST 10yr Bond 11-Jul Japan US Prior 04-Jul 0.50% 27-Jun 0.00% 20-Jun Actual 0.20% 13-Jun Survey 2Q P 06-Jun Period GDP SA QoQ 30-May Event Japan 23-May Region Qatar’s annual CPI is up 2.8% YoY in July-16. The cost of living based on CPI rose by 0.8% MoM in July-16 compared to June-16, mainly due to costlier transport, recreation and furniture. (Source: Gulf Times) Qatar’s central bank sold QAR 4.6bn (USD 1.26bn) of conventional and Islamic government bonds in its domestic government bond offer in 2016. (Source: Gulf Business) The total foreign investment in Qatar rose by QAR 1.6bn to QAR 525.7bn in 2014, according to The Ministry of Development Planning and Statistics. (Source: Gulf Times) Total value of trading in Qatar’s real estate during the week ended 11th August-16 rose 80% to QAR 400.7mn, according to a research report. (Source: The Peninsula) In Qatar, online hiring declined 25% YoY in July-16, while hiring in Saudi Arabia dropped 15% YoY for the same period. (Source: Gulf News) Qatar leads global Meetings, Incentives, Conferences, and Exhibitions segment, with more than 150 business conferences hosted every year, according to a research report. (Source: Gulf Times) Rents of most high-end residential properties in Qatar fell 10 to 20% due to oversupply and relatively low demand. (Source: The Peninsula)  Moody's has affirmed Ooredoo’s A2 long-term issuer rating and A2 senior unsecured ratings of both Ooredoo International Finance Limited and Ooredoo Tamweel Limited, with negative outlook on all the ratings. (Source: Mubasher)  The first three lines of Phase I of the Doha Metro and the Lusail LRT are expected to be operational by the end of 2020, according to Qatar Rail. (Source: Gulf Times) Al Meera Consumer Goods Company is among the five Qatari firms in 30 most valuable non-banking companies in the GCC list published by Marmore MENA Intelligence. (Source: Mubasher)  (Source: Trade Arabia) 1
2. WEEKLY WRAP August 21 , 2016 EQUITY Index Price Index Price WTD %Δ 2,183.9 (0.0) 0.5 6.8 MSCI EM 910.3 0.0 4.2 14.6 18,552.6 (0.1) 0.7 6.5 S&P GCC 1,572.1 2.1 3.5 8.7 Nasdaq 4,806.1 (0.0) 1.6 4.6 Dow Jones Islamic 2,993.1 (0.2) 0.7 6.9 FTSE 100 6,859.0 (0.8) 2.0 9.9 KSA (TASI) 6,227.0 (1.6) (1.2) (9.9) DAX 30 10,544.4 (1.6) 2.0 (1.8) UAE (DFM) 3,572.4 1.4 2.5 13.4 CAC 40 4,400.5 (2.2) (0.9) (5.1) UAE (ADX) 4,518.5 (0.2) (1.2) 4.9 BIST 100 78,145.6 (0.1) 3.6 8.9 Qatar (DSM) 11,320.4 3.3 6.8 8.5 Nikkei S&P 500 DJIA WTD %Δ MTD %Δ YTD %Δ COMMENTARY MTD %Δ YTD %Δ 16,545.8 (2.2) (0.1) (13.1) Kuwait (KSE) 5,471.9 (0.5) 0.4 (2.6) Sh. Comp 3,108.1 1.9 4.3 (12.2) Bahrain (BAX) 1,149.0 (0.6) (0.6) (5.5) Hang Seng 22,937.2 0.7 4.8 4.7 Oman (MSM) 5,894.5 (0.0) 0.9 9.0 Sensex 28,077.0 (0.3) 0.1 7.5 Jordan (ASEGI) 2,105.4 (0.6) 0.2 (1.4) Source: Bloomberg GLOBAL INDICES Weekly Performance (%) YTD Performance (%) 1.9 Sh. Comp Hang Seng MSCI EM S&P 500 Nasdaq BIST 100 DJIA Sensex Jordan (ASEGI) FTSE 100 DAX 30 Nikkei CAC 40 MSCI EM FTSE 100 BIST 100 Sensex S&P 500 DJIA Hang Seng Nasdaq Jordan (ASEGI) DAX 30 CAC 40 Sh. Comp (12.2) Nikkei (13.1) 0.7 0.0 (0.0) (0.0) (0.1) (0.1) (0.3) (0.6) (0.8) (1.6) (2.2) (2.2) (4.0) (2.0) 0.0 2.0 (20.0) 4.0 Source: Bloomberg 14.6 9.9 8.9 7.5 6.8 6.5 4.7 4.6 (1.4) (1.8) (5.1) (10.0) 0.0 10.0 20.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) Qatar (DSM) 3.3 S&P GCC UAE (DFM) 1.4 Oman (MSM) UAE (DFM) (0.0) S&P GCC 8.7 8.5 UAE (ADX) (0.2) Dow Jones Islamic (0.2) UAE (ADX) Kuwait (KSE) 6.9 4.9 Kuwait (KSE) (0.5) (2.6) Bahrain (BAX) (0.6) KSA (TASI) KSA (TASI) (1.6) (2.0) 9.0 Qatar (DSM) Dow Jones Islamic Bahrain (BAX) 13.4 Oman (MSM) 2.1 0.0 2.0 (20.0) 4.0 Source: Bloomberg; Note: KSA market was closed during the week (5.5) (9.9) (10.0) 0.0 10.0 Global Most of the global stocks declined as US Federal Reserve, in its July meeting kept the possibilities open for a rate hike as early as September. Nasdaq and S&P 500 ended the week witnessing heavy sell off due to US rate hike expectations and weakness in European markets. European bourses were down over the week, with Italian shares leading the downfall as concerns over the country’s banking system sent most banking stocks lower across the Eurozone. Moreover, reports during last week indicated that UK Prime Minister intends to invoke Article 50 of the Lisbon Treaty by April 2017 which would begin formal talks for UK's withdrawal from the European Union. In Asia, Japan’s Nikkei fell 2.2% during the week as yen firmed. Shanghai Composite rose 1.9% backed by heavy buying in companies expected to issue high dividends and continuing fund inflows from overseas investors. GCC Most of the Gulf markets edged down over the week. Saudi’s Index closed 1.6% lower with selling pressure witnessed in the petrochemical shares. Abu Dhabi’s index fell 0.2% as downfall in banking shares dragged the index lower. Dubai’s Index bucked the broader trend and rose 1.4% led by Emaar Properties which witnessed heavy buying activity over the week. Qatar QE Index rose 3.3% over the week backed by stronger oil prices and the next month’s FTSE Russell upgrade of the Qatar Stock Exchange into emerging markets. Foreign institution’s robust buying interests largely swayed the market during the week which saw higher trading turnover and volumes. All sectors closed in green during the week with major gainers being Insurance (9.7%), Telecom (7.38%), and Banks and financial services (4.01%). The Banking and Financial Services along with Real estate and Industrial sector constituted about 71% of total volumes. Out of 44 stocks traded 25 advanced, 18 declined and one remained unchanged. 20.0 Source: Bloomberg DSM INDEX Indicator Price Last Close 11,320.4 11,000 MAVG 50 10,353.1 10,000 MAVG 100 10,172.1 9,000 MAVG 200 10,109.5 6 Month High 11,408.8 6 Month Low 9,532.6 RSI (14 Days) 76.2 12,000 8,000 Feb-16 11,320.4 Apr-16 Index May-16 50 SMA 100 SMA Jul-16 200 SMA Aug-16 Source: Bloomberg 2
3. WEEKLY WRAP August 21 , 2016 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 2.72 3.00 2.50 5.00 4.00 2.04 1.78 2.00 4.34 2.29 1.43 1.00 0.50 1.58 1.43 2.00 1.17 0.00 0.00 5 Yrs 7 Yrs 10 Yrs 1.70 Current 0.90 2 Yrs 30 Yrs 5 Yrs 7 Yrs Current Last Year Source: Bloomberg 2.68 2.23 1.13 1.00 0.62 2 Yrs 2.27 2.03 1.50 0.75 3.95 2.83 3.00 10 Yrs 30 Yrs Last Year Source: Bloomberg CDS Qatar Govt. Int. Bonds Maturity Price (USD) Z Spread (BPS) Yield (%) WTD Δ (USD) YTD Δ (USD) Global QGIB 2017 101.0 (13.8) 0.25 (0.0) (0.8) US 26.5 (5.2) 6.3 7.3 QGS 2018 100.7 64.8 1.61 NA (1.1) UK 33.2 (0.4) (4.3) 14.1 QGIB 2019 112.9 48.2 1.40 (0.0) (2.1) QGIB 2020 111.3 73.7 1.73 (0.0) 0.4 Qatari Diar 2020 101.0 98.3 2.10 (0.1) NA 5 Years CDS Price (BPS) WTD Δ (BPS) MTD Δ (BPS) YTD Δ (BPS) Germany 16.9 0.3 (0.1) 4.0 France 29.6 0.0 (7.0) 3.3 QGIB 2021 111.2 88.8 2.00 NA (1.3) Italy 134.6 6.1 (0.9) 37.4 QGIB 2022 111.5 103.4 2.17 (0.0) 1.8 Greece 983.0 (34.9) 15.7 (99.0) QGS 2023 107.0 80.4 2.00 0.3 3.4 QGIB 2026 103.0 148.1 2.87 0.2 NA QGIB 2030 169.6 189.2 3.35 0.7 11.7 QGIB 2040 137.7 226.9 3.90 0.5 11.1 QGIB 2042 128.7 227.8 3.93 0.6 11.1 QGIB 2046 109.7 235.7 4.04 0.2 NA Russia 230.0 6.3 (2.3) (79.0) Japan 34.2 0.7 (0.8) (14.5) Turkey 246.8 6.8 (21.6) (26.7) Brazil 252.7 (0.8) (36.7) (242.3) Egypt 400.0 (49.3) (95.8) (78.8) GCC Source: Bloomberg, QCB US Swap Rates Abu Dhabi 72.0 (1.6) (8.5) (20.6) Tenor Bahrain 392.8 0.7 (9.7) 27.2 Dubai 162.2 1.1 (9.8) Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 0.811 (0.007) 0.198 (71.5) 6M LIBOR 1.210 0.003 0.364 12M LIBOR 1.515 (0.010) 0.337 2 years 1.001 0.042 (0.178) 5 years 1.180 0.059 (0.564) 10 years 1.442 0.044 (0.746) 30 years 1.759 0.022 (0.863) Qatar 96.0 (3.3) (10.2) 3.4 Saudi Arabia 159.0 (7.5) (11.0) 3.2 International Credit Spreads iTraxx Europe 67.5 0.3 (1.8) 67.5 iTraxx Europe Crossover 309.1 (0.6) (12.6) 309.1 Source: Bloomberg CDX North America IG 70.6 (1.2) (2.0) 70.6 Commentary CDX North America HY 380.9 (6.3) (13.2) 380.9 iTraxxSovX CEEMEA NA NA NA NA iTraxx Europe Senior Financial 70.6 0.6 (4.7) 70.6 iTraxx Europe Sub Financial 116.5 3.8 (6.9) 116.5 US treasury yields rose for the week despite minutes from the Fed’s July meeting showing lack of consensus on a rate hike. Yields got a boost by hawkish comments from some Fed officials who indicated a rate hike as soon as September. Federal Reserve Bank of New York President William Dudley on Thursday expressed confidence in US economic growth and labor market strength in the H2-16, supporting a rate hike, further benefitting yields. Investment-grade debt from energy-related issuers outperformed the broader market as oil prices moved higher. Source: Bloomberg 3
4. WEEKLY WRAP August 21 , 2016 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 50.9 WTI Crude (USD/bbl) 48.5 Oil posted a third consecutive weekly gain as the potential for a production-freeze deal among major producers outweighed concerns about ample inventories. The oil market was buoyed by declines in US crude and gasoline inventories, a weakening dollar and recent indications that major producers both outside and in the Organization of the Petroleum Exporting Countries could take steps to stabilize prices. An 8th consecutive addition in US drilling rigs, additional capacity addition by Iraq and statements by OPEC member Nigeria, indicating pessimism over oil freeze deal limited the gains. Gold gave up most of its early gains as hawkish statement by Fed officials and a risk–on mode supported by oil prices reduced its appeal. Natural Gas (USD/mmBTU) 2.6 Gold (USD/t oz.) 1,340.4 Silver (USD/t oz.) 19.3 Copper (USD/lb) 217.1 Source: Bloomberg Weekly Performance (%) WTI Crude Brent Copper Gold Natural Gas Silver (4.0) YTD Performance (%) Silver Brent WTI Crude Gold Natural Gas Copper 9.1 8.3 1.3 0.3 (0.1) (2.0) (2.0) 0.0 2.0 4.0 6.0 8.0 10.0 39.9 36.5 31.0 26.4 10.0 1.7 0.0 Source: Bloomberg 10.0 20.0 30.0 40.0 50.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.3105 USD/INR 66.5612 EUR/USD 1.1355 USD/CNY 6.6532 CAD/USD 0.7770 USD/TRY 2.9292 AUD/USD 0.7627 USD/EGP 8.8836 NZD/USD 0.7272 USD/ZAR 13.5163 100.2200 USD/RUB 63.8975 USD/JPY Commentary USD closed lower against most of its peer currencies with the dollar index down 1.4% for the week. The currency was weighed down by investors’ lack of belief in the chances of a rise in US interest rates this year as Minutes from the US central bank’s latest meeting on Wednesday showed they are split over whether to press ahead quickly with rate rises. Comments in favor of a hike soon from San Francisco Federal Reserve Bank President John Williams and his New York counterpart William Dudley offered the dollar some support. AUD was one of the few currencies to close in red as Moody’s cut its outlook for Australian bank ratings. Source: Bloomberg Weekly Performance (%) YTD Performance (%) EUR RUB GBP JPY NZD TRY CAD EGP CNY (0.1) ZAR (0.3) INR (0.3) AUD (0.3) (0.5) Source: Bloomberg JPY ZAR RUB CAD NZD AUD EUR TRY INR CNY GBP (11.3) EGP (11.8) 1.5 1.4 1.2 1.1 1.0 1.0 0.6 0.0 0.5 1.0 1.5 2.0 (15.0) 20.0 14.5 14.2 7.5 6.5 4.7 4.3 (0.4) (1.4) (2.3) (10.0) (5.0) 0.0 5.0 10.0 15.0 20.0 25.0 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 inf ormation provided in this materials or for any delays, inaccuracies, errors in, or omissions of the said information. 4