GCC Weekly Wrap - 28 April

Transcription

1. WEEKLY WRAP April 28 , 2019 ECONOMIC UPDATE & NEWS 99.9 99.2 99.7 2.80 2.70 US MBA Mortgage Applications Apr-19th -- (7.30%) (3.50%) Canada BoC Rate Decision Apr-24th 1.75% 1.75% 1.75% US Initial Jobless Claims Apr-20th 200k 230k 193k 2.60 US Durable Goods Orders 2.50 Russia Gold and Forex Reserve Japan Jobless Rate Japan Tokyo CPI Ex-Fresh Food Japan Industrial Production MoM US US 491.6b Mar 2.40% 2.50% 2.30% Apr 1.10% 1.30% 1.10% Mar P 0.00% (0.90%) 0.70% GDP Annualized QoQ Q1 A 2.30% 3.20% 2.20% U. of Mich. Sentiment Apr F 97 97.2 96.9 Source: Bloomberg            Source: Bloomberg The US GDP grew at annualized rate of 3.2% in the Q1-19, primarily driven by higher investment in roads by local and state governments. The economy grew by 2.2% in Q4-18. (Source: CNBC) Saudi Arabia’s Capital Market Authority’s Chairman announced that he is looking towards relaxing a 49.0% limit for foreign investors in stocks of listed firms on the exchange. (Source: Arabian Business)  White House Adviser stated that positive economic growth and modest inflation, are giving US control over China during trade talks and could result in US central bank cutting interest rate. (Source: Reuters) The Head of Corporate Finance and Treasury of Saudi’s sovereign wealth fund announced that its AUM is projected to reach USD 400.0bn by end of 2020 from current USD 290bn. (Source: Arabian Business)  Ratings agencies S&P Global and Fitch announced that the UK’s credit rating is likely to downgrade further despite the prolonged deadline for its departure from the EU. (Source: Nasdaq) Saudi Arabia announced its first Saudi Riyal-denominated sukuk issuance with a 30-year maturity. The new issuance are due in 2049 and the demand is equivalent to USD 2.5bn. (Source: Arabian Business)  Britain’s Chancellor stated that he is confident of finalizing a Brexit negotiation with the Labour Party to allow the approval of Prime Minister’s thrice-defeated Brexit deal. (Source: Reuters) The CEO of Saudi Arabia’s stock exchange forecasted that ownership of equities by foreigners is set to triple by 2022, driven by inflows from index trackers awaiting listing of Saudi Aramco. (Source: Arabian Business)  Germany’s Economy Minister announced that the key European Union nations desire to deal with China as a group as against signing bilateral agreements as individual states. (Source: Reuters) S&P Global Ratings has cut Oman’s outlook to negative, reflecting its likelihood of lowering the ratings in the next 12 months if the government was unable to improve fiscal deficits. (Source: Arabian Business)  The US President stated that he expects that the US might reach a new bilateral trade deal with Japan by the time he visits Tokyo in May-19, however he mentioned areas where they differ on trade. (Source: Reuters) Oman’s state-owned holding firm, Oman Aviation Group is planning to raise funds upto USD 6.0bn for the expansion of Oman Air and airports in the country. (Source: Arabian Business)  The US administration announced that China will not be allowed a wind-down period nor a short-term waiver over its oil purchases from Iran after 1st May-19. (Source: Reuters) Bahrain’s hospitality sector is likely to face a challenging future with a 25.0% rise in supply of hotel rooms over the next three years putting pressure on occupancy rates, as per Knight Frank. (Source: Arabian Business)  Kuwait is planning to utilize the nation’s tourism potential in generating new sources of income and over 25,000 new job opportunities, as per Co-founder of Leaders Group. (Source: Zawya) IMF’s Managing Director announced that China’s huge Belt and Road infrastructure program should only go where it is required and where the debt it creates can be sustained. (Source: Reuters) QATAR NEWS  Qatar signed an agreement with the country of Rwanda to strengthen aviation investments and co-operation, which is expected to make Qatar a key investor in Bugesera Airport. (Source: The East African)  During his meeting with the Chinese President, the UAE Prime Minister announced that both nations are keen to grow economic partnership with trade likely to reach USD 70.0bn in 2020. (Source: Arabian Business) Qatar Chamber has entered into an agreement with Serbia’s Chamber of Commerce and Industry to form a joint business council to increase mutual private sector co-operation. (Source: Gulf Times)  UAE’s gross bank assets (including the bankers’ acceptances) declined by 0.5% MoM to AED 2.9tn (USD 786.0bn) in March-19, according to statistics released by the UAE Central Bank. (Source: Trade Arabia) President of Nigeria urged Qatari businesses to invest in Nigeria’s refineries, pipelines, power sector, aviation, agriculture and education. (Source: This Day)  UAE and China have mutually agreed for investments worth AED 12.5bn (USD 3.4bn) in Dubai, comprising of USD 2.4bn on storage and shipping station and rest on a major food project. (Source: The National) Qatar and the UK signed various bilateral agreements including the commitment by Innovate Finance to support the development of the FinTech ecosystem in Qatar. (Source: Gulf Times)  The UAE is planning for new transit visas to drive stopover tourism across the emirates as it is targeting 20.0mn annual visitors by 2020, and further 5.0mn between October-20 and April-21. (Source: The Nation) Qatar has emerged as the favorite candidate for a long-term gas supply deal to Pakistan, according to a senior Pakistani official. The agreement is expected to be finalized soon. (Source: Reuters)  Qatar has given approval to offer discounted prices on over 500 consumer products in co-operation with key shopping malls till end of the holy month of Ramadan. (Source: Gulf Times) Turkey’s central bank has kept interest rate unchanged at 24.0% as per expectations, however it declined the previous plans to further tighten rates if required to address inflation. (Source: Reuters) GCC NEWS  2.30  GLOBAL NEWS  2.50 2.40 22-Apr (1.10%) 490.9b 15-Apr 2.70% -- 08-Apr 0.80% 28-Jan Mar P Apr-19th 01-Apr Apr UST 10yr Yield 25-Mar 662k 18-Mar Prior 692k 11-Mar Actual 649k 04-Mar Survey Mar 25-Feb Germany IFO Business Climate Period 18-Feb New Home Sales 11-Feb Event US 04-Feb Region 1
2. WEEKLY WRAP April 28 , 2019 EQUITY Index Price S&P 500 DJIA WTD %Δ MTD %Δ YTD %Δ Index Price WTD %Δ MTD %Δ YTD %Δ 2,939.9 1.2 3.7 17.3 MSCI EM 1,078.1 (1.3) 1.9 11.6 26,543.3 (0.1) 2.4 13.8 S&P GCC 1,990.7 0.7 5.2 12.6 7,826.7 1.8 6.1 23.6 Dow Jones Islamic 3,894.5 0.6 2.8 16.5 Nasdaq FTSE 100 7,428.2 (0.4) 2.0 10.4 KSA (TASI) 9,275.5 0.9 5.2 18.5 DAX 30 12,315.2 0.8 6.8 16.6 UAE (DFM) 2,787.4 (0.9) 5.8 10.2 CAC 40 5,569.4 (0.2) 4.1 17.7 UAE (ADX) 5,391.9 1.9 6.3 9.7 BIST 100 94,783.1 (2.1) 1.1 3.8 Qatar (DSM) 10,451.1 1.0 3.4 1.5 Nikkei 12.3 22,258.7 0.3 5.0 11.2 Kuwait (KSE) 5,705.6 (1.7) 1.6 Sh. Comp 3,086.4 (5.6) (0.1) 23.8 Bahrain (BAX) 1,442.2 (0.3) 2.0 7.8 Hang Seng 29,605.0 (1.2) 1.9 14.5 Oman (MSM) 3,940.4 (1.0) (1.1) (8.9) Sensex 39,067.3 (0.2) 1.0 8.3 Jordan (ASEGI) 1,879.0 (1.1) (1.8) (1.6) Source: Bloomberg GLOBAL INDICES Weekly Performance (%) YTD Performance (%) 1.8 1.2 0.8 0.3 Nasdaq S&P 500 DAX 30 Nikkei DJIA Sensex CAC 40 FTSE 100 Hang Seng MSCI EM BIST 100 Sh. Comp (0.1) (0.2) (0.2) (0.4) (1.2) (1.3) (2.1) (5.6) (8.0) (3.0) 2.0 17.7 17.3 16.6 14.5 13.8 11.6 11.2 10.4 8.3 3.8 (22.0) 7.0 Source: Bloomberg (12.0) (2.0) 8.0 18.0 28.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) UAE (ADX) KSA (TASI) 1.9 Qatar (DSM) KSA (TASI) 0.7 Dow Jones Islamic S&P GCC 12.6 12.3 0.6 Bahrain (BAX) (0.3) UAE (DFM) 10.2 UAE (ADX) 9.7 UAE (DFM) (0.9) Bahrain (BAX) Oman (MSM) (1.0) Qatar (DSM) Oman (MSM) Kuwait (KSE) (1.7) (2.0) (1.0) 0.0 1.0 2.0 (20.0) 3.0 Source: Bloomberg 16.5 Kuwait (KSE) 0.9 S&P GCC 18.5 Dow Jones Islamic 1.0 7.8 1.5 (8.9) (10.0) 0.0 10.0 Global The US markets ended mostly higher during the last week after the release of upbeat quarterly earnings data. The benchmarks gained further ground amid encouraging capital goods orders and GDP data. The S&P 500 inched higher driven by gains in Technology, Healthcare and Communication Service stocks. The Stoxx Europe 600 rose marginally as upbeat earnings from regional companies was offset by tepid German business sentiment data for April-19. The Asian stocks ended the week on a mixed note. The Shanghai’s Composite declined by about 5.6%, amid worries that the Chinese government might scale back the policy support after the country’s Q1-19 GDP exceeded expectations. GCC GCC markets closed on a mixed note during the last week. The Saudi Arabian benchmark edged higher, amid gains in Utilities and Commercial Services stocks. Riyad Bank climbed 8.6%, after posting a strong 44.7% YoY gain in Q1-19 net profit. Dubai’s benchmark declined by 0.9% during the week, amid losses in Financial Services and Real Estate stocks. Takaful Emarat Insurance declined after the company said it will not proceed with the proposed acquisition of Al Hilal Takaful. Dubai Islamic Bank gained after exhibiting a growth in Q1-19 net profit. The Abu Dhabi benchmark outperformed its regional peers, amid increased buying support in Banking and Services shares. 23.8 23.6 Sh. Comp Nasdaq CAC 40 S&P 500 DAX 30 Hang Seng DJIA MSCI EM Nikkei FTSE 100 Sensex BIST 100 Commentary 20.0 Qatar The QE index gained by 1.0% during the week, amid gains in Transportation and Insurance stocks. Qatar Cinema gained 2.3%, after reporting higher net income for Q1-19. Buying support on the part of domestic and foreign institutional investors supported the benchmark. Trade turnover and volume declined with Real Estate, Industrial and Banking & Financial stocks accounting for 83.1% of the total trading volume. Out of the 46 listed stocks, 14 advanced and 31 declined, while 1 remained unchanged. Source: Bloomberg DSM INDEX Indicator Price Last Close 10,451.1 10,425 MAVG 50 10,101.6 9,850 MAVG 100 10,318.6 9,275 MAVG 200 10,117.6 6 Month High 10,787.8 6 Month Low 9,744.2 RSI (14 Days) 70.6 10,451.1 11,000 8,700 Nov-18 Dec-18 Index Feb-19 50 SMA 100 SMA Apr-19 200 SMA Source: Bloomberg 2
3. WEEKLY WRAP April 28 , 2019 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 3.13 3.20 3.00 2.92 2.62 2.20 2.50 2.29 2 Yrs 3 Yrs 5 Yrs Current 3.56 4.39 3.46 3.14 2.89 2.91 2 Yrs 3 Yrs 5 Yrs Current 2.00 2.00 10 Yrs Last Year 30 Yrs Source: Bloomberg 10 Yrs Last Year 30 Yrs Source: Bloomberg Qatar Govt. Int. Bonds CDS 5 Years CDS 3.31 3.00 2.50 2.25 3.97 4.00 3.50 2.28 4.43 4.50 2.49 2.40 5.02 5.00 2.80 2.80 2.60 5.50 2.96 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 2020 QGIB 2021 101.9 6.4 2.50 (0.2) (0.3) 98.9 51.4 2.83 0.1 1.1 US 20.9 1.9 0.0 (3.5) Qatari Diar 2020 102.4 48.7 2.90 (0.0) 0.3 UK 31.3 0.7 (3.1) (10.0) QGIB 2022 104.2 55.4 2.84 0.1 1.0 QGS 2023 101.1 62.1 2.88 0.2 1.7 QGIB 2023 103.3 68.8 2.98 0.2 1.9 QGIB 2024 101.4 72.9 3.04 0.3 NA 88.5 3.26 0.7 3.0 3.4 Germany 12.5 (0.2) (0.9) (2.7) France 29.7 0.5 (1.7) (10.3) Italy 198.6 2.2 (10.3) (12.0) QGIB 2026 99.9 Greece 340.2 (0.7) (51.7) (154.2) QGIB 2028 108.1 99.7 3.43 0.9 QGIB 2029 104.1 103.0 3.50 1.1 NA QGIB 2030 155.9 111.1 3.58 0.9 3.4 Russia 128.5 (0.6) (7.0) (26.1) Japan 22.4 (0.3) (0.6) (4.8) QGIB 2040 130.5 154.8 4.17 1.6 4.9 Turkey 463.2 26.5 64.9 99.5 QGIB 2042 121.9 158.8 4.23 1.4 3.7 (32.1) QGIB 2046 106.5 155.4 4.21 1.2 4.2 QGIB 2048 111.7 171.8 4.38 1.4 6.4 QGIB 2049 107.4 170.0 4.36 1.9 NA Brazil Egypt 177.8 334.7 4.7 5.6 3.7 (6.4) (73.3) GCC Source: Bloomberg, QCB Abu Dhabi 59.5 (0.5) (3.8) (10.1) US Swap Rates Bahrain 271.1 4.7 4.6 (43.1) Tenor Dubai 141.6 1.2 4.3 7.4 Qatar 65.3 1.0 (8.0) (19.9) Saudi Arabia 77.6 (0.4) (7.7) (29.4) International Credit Spreads iTraxx Europe 58.9 1.6 (7.0) (29.7) 251.3 4.1 (21.2) (102.7) CDX North America IG 57.5 0.1 (6.6) (30.3) CDX North America HY 324.1 (1.2) (24.5) (126.3) iTraxx Europe Senior Financial 7.0 1.8 (1.6) (37.7) iTraxx Europe Sub Financial 16.2 0.7 (4.6) (45.2) iTraxx Europe Crossover Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 2.582 0.001 (0.225) 6M LIBOR 2.613 (0.017) (0.263) 12M LIBOR 2.716 (0.030) (0.289) 2 years 2.390 (0.091) (0.270) 5 years 2.323 (0.084) (0.250) 10 years 2.486 (0.067) (0.222) 30 years 2.691 (0.043) (0.147) Source: Bloomberg Commentary The 10-year treasury yield slipped by 2.1 bps to 2.5%, after the release of a tepid domestic inflation data for Q1-19 cemented expectations that the US Fed would stay patient with its rate hikes. The yield on German 10-year bund declined by 5.4 bps, ending further into the negative territory. The release of tepid German business confidence data heightened concerns over the health of the economy. The Japanese bonds fell during the week as a decline in the domestic stock markets increased demand for the safe haven assets. Source: Bloomberg 3
4. WEEKLY WRAP April 28 , 2019 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 72.2 WTI Crude (USD/bbl) 63.3 Oil prices saw a volatile trading session in an eventful week. Prices advanced earlier in the week, after the Trump administration announced that it would no longer exempt certain countries from importing oil from Iran. However, comments from the US President that he has asked the OPEC to bring down oil prices released some pressure from the oil prices later in the week. Oil prices also found support from the reports that Poland and Germany have suspended imports of Russian crude. Gold gained, amid bargain hunting from investors. Natural gas gained amid weather forecasts of cold snap in the northern parts of US. Copper prices fell, amid reports that China may reduce its stimulus following the release of strong domestic data. Natural Gas (USD/mmBTU) 2.6 Gold (USD/t oz.) 1,288.8 Silver (USD/t oz.) 15.0 Copper (USD/lb) 288.7 Source: Bloomberg Weekly Performance (%) YTD Performance (%) Natural Gas WTI Crude 3.1 Gold Silver (1.1) Copper (1.1) (2.0) 9.7 Gold 0.3 WTI Crude 34.1 Copper 0.3 Brent 39.4 Brent 1.0 0.6 Silver (3.4) Natural Gas (12.2) (1.0) 0.0 1.0 2.0 3.0 4.0 (20.0) Source: Bloomberg (10.0) 0.0 10.0 20.0 30.0 40.0 50.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.2946 USD/INR 69.5188 EUR/USD 1.1181 USD/CNY 6.7288 CAD/USD 0.7432 USD/TRY 5.9380 AUD/USD 0.7042 USD/EGP 17.1720 NZD/USD 0.6662 USD/ZAR 14.3917 111.5800 USD/RUB 64.7950 USD/JPY Commentary The USD gained against a basket of major currencies during the week with the US dollar index gaining 0.7% to settle at 98.01. The greenback gained ground after the release of Q1-19 strong domestic GDP and capital goods order data. The EUR declined, amid broad based strength in the greenback and as the release of tepid German business sentiment data renewed concerns over the health of the Eurozone economy. The GBP declined, amid reports that the Brexit talks between British government and the opposition Labor party have faded. The CAD eased, after the Canadian central bank kept its interest rates unchanged and lowered the GDP growth forecasts for 2019. Source: Bloomberg Weekly Performance (%) JPY EGP NZD CNY CAD GBP INR EUR RUB AUD TRY (2.0) ZAR (2.3) (2.5) Source: Bloomberg (2.0) YTD Performance (%) 0.3 0.0 (0.3) (0.4) (0.5) (0.6) (0.6) (0.8) (1.2) (1.5) (1.5) (1.0) (0.5) 0.0 0.5 RUB EGP CNY CAD GBP AUD ZAR INR NZD JPY EUR TRY 6.9 4.3 2.2 1.4 1.3 (0.1) (0.2) (0.3) (0.8) (1.8) (2.8) (10.8) (15.0) (10.0) (5.0) 0.0 5.0 10.0 Source: Bloomberg DISCLAIMER It is understood that any opinions expressed by Commercial Bank or its affiliates as to the commentary, market informa tion, 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