GCC Weekly Wrap - 29 May

Transcription

1. WEEKLY WRAP May 29 , 2016 ECONOMIC UPDATE & NEWS Actual Prior Germany ZEW Current Situation May 49 53.1 47.7 Germany ZEW Survey Expectations May 12 6.4 11.2 2.00 Germany IFO Business Climate May 106.8 107.7 106.7 1.90 Canada Bank of Canada Rate Dec. May-25th 0.50% 0.50% 0.50% UK GDP QoQ 1Q P 0.40% 0.40% 0.40% UK GDP YoY 1Q P 2.10% 2.00% 2.10% 1.70 US Initial Jobless Claims May-21st 275k 268k 278k 1.60 US Durable Goods Orders Apr P 0.50% 3.40% 1.90% Russia Gold and Forex Reserve May-20th -- 388.3b 390.9b Italy Manufacturing Confidence May 103 102.1 102.7 US GDP Annualized QoQ 1Q S 0.90% 0.80% 0.50% US U. of Mich. Sentiment May F 95.4 94.7 95.8 Source: Bloomberg GLOBAL NEWS  UST 10yr Bond 1.80 (Source: Nasdaq) US consumer sentiment rose to a reading of 94.7 in May-16, up 5.7 points MoM from reading of 89 in Apr-16, according to University of Michigan. (Source: Nasdaq)  US home prices rose 5.7% YoY and 1.3% QoQ in Q1-16 as buyers competed for a limited supply of listings, according to the Federal Housing Finance Agency. (Source: Bloomberg)  Eurozone consumer sentiment improved to -7.0 points in May-16 from -9.3 in Apr-16, better than the forecast of -9.0. (Source: Reuters)  Eurozone preliminary PMI from Markit showed that business activity in the 19-country region fell to 52.9 in May-16 as compared to 53.0 in Apr-16. (Source: CNBC)  German business sentiment improved in May-16 to 107.7 from a revised 106.7 in Apr-16, ignoring Brexit fear, according to a survey from Munich-based Ifo Institute. (Source: Bloomberg) 23-May 16-May 09-May 02-May 25-Apr 18-Apr 11-Apr 04-Apr 28-Mar 21-Mar 1.50 Source: Bloomberg  Saudi Arabia has joined Turkey, Indonesia and Islamic Development Bank as a prospective founder member of a new Islamic finance infrastructure bank. All of them would contribute around USD 300mn each for the project. (Source: Arabian Business)  Oman’s total imports declined marginally by 1% to OMR 11.2bn in 2015, from OMR 11.3bn in 2014, mainly on account of the fall in commodity prices across the globe. (Source: Times Of Oman)  Oman banks witnessed 8.4% rise in credit and 12.6% rise in core capital and reserves in 2015, according to Central Bank of Oman. US GDP growth was upwardly revised to 0.8% in Q1-16 from the initial estimate of 0.5%, following a modest 1.4% gain in Q4-15.  1.82 14-Mar Period Survey 07-Mar Event 29-Feb Region (Source: Times Of Oman)  Bahrain Inflation stood at 3.8% YoY in Apr-16. Housing and utility costs and prices of food and non-alcoholic beverages rose 3.8% YoY and 5.9% YoY, respectively. (Source: Arabian Business) QATAR NEWS  Qatar’s PPI increased 1.9% in Mar-16 mainly due to increase in prices for crude petroleum and natural gas. (Source: Gulf Times)  Qatari entities raised USD 2.04bn in bonds and sukuk in 2015, according to Kuwait Financial Centre (Markaz). (Source: Gulf Times)  German Markit's flash composite PMI, which tracks the manufacturing and services activity, rose to 54.7 in May-16 from 53.6 in Apr-16. (Source: Reuters)  Despite the negative effect of persistent low oil prices, Qatar’s credit profile remains consistent with ‘Aa2’ rating on expected continued strong growth, according to Moody’s. (Source: Gulf Times)  Italy’s trade surplus climbed to EUR 3.6bn in Apr-16 from EUR 2.4bn in Apr-15. Exports fell 3.6% YoY in April-16 while imports were down 13.0% YoY in the same period. (Source: London South East)   The Markit/Nikkei Flash Japan Manufacturing Purchasing Managers Index (PMI) fell at its fastest pace in over three years to 47.6 in May16 on a seasonally adjusted basis, from a final 48.2 in April-16. (Source: Qatar is poised to raise USD 9bn through a triple-tranche bond. It has launched a USD 3.5bn five-year note at Treasuries plus 120bp, a USD 3.5bn 10-year note at plus 150bp, and a USD 2bn 30-year note at plus 210bp. (Source: Zawya)  The bilateral trade between Qatar and Saudi Arabia touched QAR 6.94bn in 2015. Qatar's imports from Saudi Arabia were at QAR 5.11bn while exports stood at QAR 1.83bn in 2015. (Source: The Peninsula)  The total trading value in the Qatar's Real Estate transactions reached QAR 529mn from 15th-19th May-16, according to the Land Registry Department of the Ministry of Justice. (Source: QNA)  Qatar accounts for 8.57% of the total value of the pipeline of projects planned in the GCC as of May-16, according to Meed. (Source: Gulf Times)  Qatar cut its planned spending on building healthcare facilities to QAR 2.5bn down from planned QAR 7bn. 2016 budget for public building has been cut to QAR 15bn–QAR 17bn, down from previously estimated QAR 25bn due to drop in energy prices. (Source: Zawya)  Property insurance in Qatar is expected to remain the largest in the non-life insurance sector over the next couple of years and is likely to be valued at QAR 6.4bn by 2019, according to Timetric. (Source: Zawya)  Seib Insurance and Reinsurance Company has been assigned 'BBB' global scale and 'AA' GCC regional scale rating by S&P, with a stable outlook. (Source: Gulf Times) Reuters) GCC NEWS  The aggregate primary issuance of bonds and sukuk by GCC entities, including Central Banks, totaled USD 118.7bn in 2015, a 37.2% increase from the total amount raised in 2014. (Source: The Peninsula)  Moody's downgraded the long-term deposit ratings of nine banks (SAMBA, Banque Saudi Fransi, SBB, Arab National Bank, Riyad Bank, Saudi Hollandi Bank, SIB, Bank AlBilad and Bank Al-Jazira). All ratings carry a stable outlook. (Source: CPI Financial)  Average consumer prices in Abu Dhabi rose 3% in the first four months of 2016 compared to the same period in 2015. In April-16 alone, the CPI rose 2.4% YoY. (Source: Zawya)  Saudi Arabia’s construction contract awards fell 51% YoY and 39% QoQ to reach SAR 27.9mn in Q1-16, due to lower oil prices, according to a report. (Source: Arabian Business) 1
2. WEEKLY WRAP May 29 , 2016 EQUITY Index Price Index Price WTD %Δ 2,099.1 2.3 1.6 2.7 MSCI EM 808.3 2.9 (3.8) 1.8 17,873.2 2.1 0.6 2.6 S&P GCC 1,438.0 0.5 (5.3) (0.6) Nasdaq 4,512.5 3.4 3.9 (1.8) Dow Jones Islamic 2,853.2 2.3 0.6 1.9 FTSE 100 6,270.8 1.9 0.5 0.5 KSA (TASI) 6,482.5 (3.2) (4.8) (6.2) DAX 30 10,286.3 3.7 2.5 (4.3) UAE (DFM) 3,351.0 3.8 (4.0) 6.3 CAC 40 4,514.7 3.7 1.9 (2.6) UAE (ADX) 4,283.5 1.1 (5.7) (0.6) BIST 100 78,028.9 2.2 (8.6) 8.8 Qatar (DSM) 9,716.5 (1.0) (4.6) (6.8) Nikkei S&P 500 DJIA WTD %Δ MTD %Δ YTD %Δ COMMENTARY MTD %Δ YTD %Δ 16,834.8 0.6 1.0 (11.6) Kuwait (KSE) 5,396.7 1.4 0.1 (3.9) Sh. Comp 2,821.0 (0.2) (4.0) (20.3) Bahrain (BAX) 1,098.8 (0.3) (1.1) (9.6) Hang Seng 20,576.8 3.6 (2.3) (6.1) Oman (MSM) 5,914.6 (0.3) (0.5) 9.4 Sensex 26,653.6 5.3 4.1 2.1 Jordan (ASEGI) 2,107.6 (0.4) 0.6 (1.3) Source: Bloomberg GLOBAL INDICES Weekly Performance (%) YTD Performance (%) 5.3 Sensex DAX 30 CAC 40 Hang Seng Nasdaq MSCI EM S&P 500 BIST 100 DJIA FTSE 100 Nikkei Sh. Comp Jordan (ASEGI) BIST 100 S&P 500 DJIA Sensex MSCI EM FTSE 100 Jordan (ASEGI) Nasdaq CAC 40 DAX 30 Hang Seng Nikkei Sh. Comp 3.7 3.7 3.6 3.4 2.9 2.3 2.2 2.1 1.9 0.6 (0.2) (0.4) (2.0) 0.0 2.0 4.0 8.8 2.7 2.6 2.1 1.8 0.5 (1.3) (1.8) (2.6) (4.3) (6.1) (11.6) (20.3) (30.0) 6.0 Source: Bloomberg (20.0) (10.0) 0.0 10.0 20.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) UAE (DFM) Oman (MSM) 3.8 Dow Jones Islamic Kuwait (KSE) S&P GCC Bahrain (BAX) KSA (TASI) (3.2) (2.0) (3.9) KSA (TASI) Qatar (DSM) (1.0) (4.0) (0.6) Kuwait (KSE) (0.3) Qatar (DSM) (0.6) S&P GCC 0.5 (0.3) Bahrain (BAX) 1.9 UAE (ADX) 1.1 Oman (MSM) 6.3 Dow Jones Islamic 1.4 UAE (ADX) 9.4 UAE (DFM) 2.3 0.0 2.0 4.0 (9.6) (15.0) (10.0) (5.0) 6.0 Source: Bloomberg (6.2) (6.8) 0.0 5.0 10.0 15.0 Global Global markets rallied this week. US benchmarks rose for a second consecutive week amid generally positive economic data, higher oil prices and signs that Federal Reserve would go for a rate hike soon. S&P 500 and DJIA gained 2.3% and 2.1%, respectively for the week. Nasdaq added 3.4% during the week, mainly led by Technology and Biotechnology stocks. European stocks posted their best weekly gain since February-16 as Stoxx Europe 600 surged. DAX 30 and CAC 40 both advanced 3.7% over the week while FTSE 100 closed 1.9% higher. A resolution to the economic crisis in Greece and improving oil prices helped the broader indices. Most Asian markets advanced over the week. Japan’s Nikkei closed just 0.6% higher for the week with concern over an additional tax hike, which could throw the Japanese economy back into recession. The Shanghai Composite fell 0.2% over the week, as the private indicators tracking the world’s second largest economy suggested sluggish growth in May-16. GCC Gulf markets closed on a mixed note over the week. An improvement in oil prices failed to support Saudi Arabia's index as investors resorted to profit booking, but helped the Emirati bourses. Saudi Arabia’s index closed 3.2%. However, petrochemical shares remained resilient on Thursday, with the sub-index advancing 0.3%. Dubai’s benchmark added 3.8% over the week, mainly supported by gains in Real Estate sector. Abu Dhabi’s index rose 1.1% for the week, majorly helped by energy stocks. Qatar QE index closed 1.0% lower during the week, which otherwise witnessed despite a rebound in oil prices. Domestic institutions and non-Qatari individual investors squared off their positions over the week. Real Estate, Insurance, Telecom and Transport counters witnessed higher than average sell-off during the week, which dragged the broader index. Out of the 44 stocks, 33 declined, 10 advanced and 1 remained unchanged. Source: Bloomberg DSM INDEX Indicator 12,000 11,000 9,716.5 10,000 9,000 8,000 Nov-15 Jan-16 Index Feb-16 50 SMA 100 SMA Apr-16 200 SMA May-16 Price Last Close 9,716.5 MAVG 50 10,098.8 MAVG 100 9,883.4 MAVG 200 10,473.4 6 Month High 10,500.0 6 Month Low 8,516.8 RSI (14 Days) 36.9 Source: Bloomberg 2
3. WEEKLY WRAP May 29 , 2016 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 3.50 5.00 3.00 4.00 2.50 2.65 1.49 0.91 1.85 1.67 1.00 0.50 2.12 1.87 2.00 1.50 4.47 2.88 2.48 3.00 2.00 1.45 2.57 1.79 1.00 0.61 0.00 0.00 5 Yrs 4.17 2.18 1.39 2 Yrs 3.25 2.60 7 Yrs 10 Yrs Current 0.80 2 Yrs 30 Yrs 5 Yrs 7 Yrs Current Last Year Source: Bloomberg 10 Yrs 30 Yrs Last Year Source: Bloomberg CDS Qatar Govt. Int. Bonds Price (BPS) WTD Δ (BPS) MTD Δ (BPS) YTD Δ (BPS) US 22.3 1.2 1.2 3.1 UK 32.0 (2.0) (4.0) 13.2 Germany 19.3 (1.2) (0.7) France 36.5 (2.0) Italy 126.5 Greece Maturity Price (USD) Z Spread (BPS) Yield (%) WTD Δ (USD) YTD Δ (USD) QGIB 2017 101.3 25.5 0.78 (0.1) (0.5) QGS 2018 100.6 75.7 1.59 (0.4) (0.7) QGIB 2019 113.0 69.0 1.74 (0.6) (2.0) 6.8 QGIB 2020 110.0 112.3 2.28 (0.6) (0.8) (2.0) 10.5 Qatari Diar 2020 110.9 94.5 2.22 NA (1.6) (2.5) 1.5 29.8 QGIB 2022 109.9 119.5 2.54 (0.4) 0.2 955.8 9.0 (196.8) (126.3) QGS 2023 103.5 117.2 2.61 (0.2) (0.2) Russia 260.1 (9.4) 12.6 (47.3) QGIB 2030 162.7 209.3 3.87 0.8 4.7 Japan 34.0 (1.0) (2.0) (14.6) QGIB 2040 128.6 240.9 4.40 (0.8) 2.0 Turkey 271.5 (11.0) 31.5 (5.6) QGIB 2042 119.5 241.8 4.44 (0.9) 1.9 5 Years CDS Global Brazil 351.3 (11.7) 13.0 (152.8) Egypt 488.5 8.0 7.9 9.7 Abu Dhabi 100.0 5.0 8.0 7.4 Bahrain 370.0 (1.0) 12.2 4.4 Dubai 215.0 (4.0) 3.5 (18.7) Qatar 110.0 9.5 14.0 17.4 Saudi Arabia 165.0 5.5 13.0 9.2 GCC US Swap Rates Tenor Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 0.674 0.013 0.061 6M LIBOR 0.977 0.022 0.131 12M LIBOR 1.321 0.019 0.143 2 years 1.064 0.048 (0.115) 5 years 1.343 0.022 (0.402) 10 years 1.710 0.012 (0.478) 70.7 30 years 2.174 0.031 (0.448) International Credit Spreads iTraxx Europe Source: Bloomberg, QCB 70.7 (8.0) (2.3) iTraxx Europe Crossover 305.2 (30.0) (5.8) 305.2 Source: Bloomberg CDX North America IG 76.6 (7.4) (1.1) 76.6 Commentary CDX North America HY 433.2 (24.7) 1.8 433.2 iTraxxSovX CEEMEA NA NA NA NA iTraxx Europe Senior Financial 72.9 (9.7) (1.1) 72.9 iTraxx Europe Sub Financial 110.3 (33.4) (21.8) 110.3 Treasury yields remained majorly unchanged over the week, despite increased prospects of interest rate hike by the US Fed in June this year. Credit spreads on high quality bonds narrowed, backed by a slew of positive macroeconomic data which included strong housing data and an upward revision to first-quarter GDP estimates. Below investment-grade bonds benefited from the strength in energy issuers, which make up a large component of US high yield bond indices. Energy issuers benefitted on the back of rise in oil prices during the week. Source: Bloomberg 3
4. WEEKLY WRAP May 29 , 2016 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 49.3 WTI Crude (USD/bbl) 49.3 Oil futures gained for the 3rd straight week after the Energy Information Administration weekly inventory release showed that crude stockpiles recorded a large drop of 4.23 mn barrels for the week ending May 20, 2016, following a rise of 1.31 mn barrels in the previous week. WTI crude closed 3.3% higher for the week, while Brent was up 1.2%. Baker Hughes data showing a decline of 2 rigs, had little impact on the prices. Gold plunged 3.1% for the week as the dollar rallied and investors raised bets on the Federal Reserve increasing interest rates as early as next month. Higher rates curb gold’s appeal against interest-bearing assets. Silver also closed 1.5% in red. Natural Gas (USD/mmBTU) 2.2 Gold (USD/t oz.) 1,213.8 Silver (USD/t oz.) 16.3 Copper (USD/lb) 211.4 Source: Bloomberg Weekly Performance (%) Natural Gas WTI Crude Copper Brent Silver Gold (3.1) YTD Performance (%) 5.2 WTI Crude Brent Silver Gold Copper Natural Gas (7.2) 3.3 2.7 1.2 (1.5) (4.0) (2.0) 0.0 2.0 4.0 6.0 33.2 32.3 17.7 14.5 (1.0) (10.0) Source: Bloomberg 0.0 10.0 20.0 30.0 40.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.4653 USD/INR 66.5350 EUR/USD 1.1145 USD/CNY 6.5655 CAD/USD 0.7677 USD/TRY 2.9607 AUD/USD 0.7182 USD/EGP 8.8801 NZD/USD 0.6701 USD/ZAR 15.7283 110.3100 USD/JPY 65.9385 USD/RUB Commentary The dollar gained against its major peers after Federal Reserve Chair Janet Yellen said an interest-rate increase in the coming months may be appropriate, echoing recent remarks by other policy makers. The JPY closed the week marginally in red. The currency pared some of its losses after the G7 reaffirmed previous commitments not to intervene in foreign exchange markets. However, GBP ended 0.8% in green for a second consecutive week after a survey showed that the UK will remain in the European Union. The RUB also closed the week 1.5% higher, supported by gains in oil prices, which hit the phycological benchmark of USD 50 a barrel. Source: Bloomberg Weekly Performance (%) RUB GBP CAD INR TRY EGP JPY CNY AUD ZAR NZD EUR (1.5) YTD Performance (%) RUB JPY CAD EUR GBP CNY INR TRY AUD ZAR NZD EGP 1.5 0.8 0.7 0.6 0.5 (0.1) (0.1) (0.3) (0.6) (0.6) (0.9) (1.0) (1.0) Source: Bloomberg (0.5) 0.0 0.5 1.0 1.5 2.0 10.9 9.0 6.2 2.3 (0.8) (1.1) (1.2) (1.4) (1.4) (1.6) (1.9) (11.8) (15.0) (10.0) (5.0) 0.0 5.0 10.0 15.0 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 Commercial Bank 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