GCC Weekly Wrap - 5 November

Transcription

1. WEEKLY WRAP November 05 , 2017 ECONOMIC UPDATE & NEWS Period Survey Actual Prior Oct 59.5 58.7 60.8 FOMC Rate Decision Nov-01st 1.25% 1.25% 1.25% 2.40 UK Bank of England Bank Rate Nov-02nd 0.50% 0.50% 0.25% 2.30 US Initial Jobless Claims Oct-28th 235k 229k 234k Russia Gold and Forex Reserve Oct-27th - 425.5b 425.6b 2.20 US Change in Nonfarm Payrolls Oct 313k 261k 18k 2.10 US Durable Goods Orders Sep F 2.00% 2.00% 2.20% Japan Jobless Rate Sep 2.80% 2.80% 2.80% Japan Industrial Production MoM Sep P (1.60%) (1.10%) 2.00% France CPI YoY Oct P 1.00% 1.10% 1.00% Italy CPI EU Harmonized YoY Oct P 1.30% 1.10% 1.30% US Conf. Board Cons.Confi. Oct 121.5 125.9 120.6 Source: Bloomberg GLOBAL NEWS  The US President, Donald Trump, has elected Jerome Powell to replace current Fed Chairman Janet Yellen at the Central Bank. (Source: Reuters)  US personal income rose by 0.4% MoM in Sep-17. Personal expenditure increased by 1.0% MoM driven by purchases of durable goods which were lost in recent flooding from hurricanes. (Source: Nasdaq)  US Federal Reserve kept the interest rate unchanged at 1.0% to 1.25%. 2.23 2.00 30-Oct 23-Oct 16-Oct 09-Oct 02-Oct 25-Sep 18-Sep 11-Sep 04-Sep 1.90 28-Aug US UST 10yr Bond 21-Aug ISM Manufacturing 14-Aug Event US 07-Aug Region Source: Bloomberg   UAE based traditional banks’ assets rose to AED 2.1tn, accounting for 79.6% of the total assets of the country's banking apparatus at end of Sep-17. (Source: Trade Arabia)  The total value of real estate transactions in Dubai for 9M-17 reached AED 204.0bn driven by 52,170 transactions, according to Dubai Land Department. (Source: Trade Arabia)  Abu Dhabi’s GDP rose by 6.7% YoY in Q2-17. The non-oil sector contributed 70.2% while the oil sector accounted for 29.8%. (Source: (Source: USA Today) SCAD)  US non-farm payrolls climbed to 261,000 jobs in Oct-17 as labor conditions returned to normal following the storm weekend September. While unemployment rate fell to 4.1% in Oct-17 compared to 4.2% last month. (Source: CNBC)  Bank of England raised its benchmark rate by 25bps to 0.5% and policymakers voted to maintain the quantitative easing at GBP 435.0bn. (Source: Market Insider)  Bahrain government plans to invite tender bids for the 100-megawatt solar power plant, set to be built under a public-private partnership scheme, by Feb-18. (Source: Trade Arabia)  Eurozone inflation fell marginally over the month to 1.4% in Oct-17 led by easing energy prices. During the preceeding month, the inflation stood at 1.5%. (Source: Morning Star)  Kuwait ruler reappointed his prime minister, Sheikh Jaber Mubarak alSabah, to form a cabinet after the government stepped down earlier this week in an expected cabinet reshuffle. (Source: Zawya)  Eurozone and EU28 GDP rose by 0.6% QoQ in Q3-17, driven by strong performance in France. (Source: The Guardian)  Eurozone unemployment rate fell to 8.9% in Sep-17. The number of unemployed fell by 0.7% MoM to 14.5mn. (Source: Market Insider)   Saudi Arabia central bank’s net foreign assets fell by 0.5% MoM to USD 475.2bn in Sep-17 driven by 1.2% MoM rise in foreign bank deposits. Foreign securities holdings fell by 1.2% MoM to USD 328.5bn. (Source: Zawya) QATAR NEWS  Bank of Japan has kept its monetary stimulus program unchanged and has trimmed its inflation forecasts. (Source: Bloomberg) Qatar’s PPI grew by 17.8% YoY to 54.8 in Sep-17, mainly driven by an 18.4% YoY rise in crude & natural gas prices and 12.7% YoY rise in basic metal prices. (Source: Qatar MDPS)   Turkey grew by 5.1% YoY in H1-17 and its year end growth is expected to hit 7.0%, the nation’s President said. (Source: Reuters) Total sukuk issued by Qatari government rose by 41.7% YoY to QAR 62.4bn in Sep-17. (Source: QCB)  Qatar’s population rose by 1.3% MoM to 2,668,415 in Oct-17. (Source:  Turkey’s banking sector’s net profit rose by 28.6% YoY to TRY 37.2bn during 9M-17. Total assets rose 20.5% YoY to TRY 3.1tn in Sep-17.  US government has given approval to the USD 1.1bn deal to service Qatar’s F-15QA fighter jets and build ground facilities, according to Defence Security Co-operation Agency report. (Source: Gulf Times)  Qatar Central Bank is planning to enter into the joint cooperation with Tajikistan in the field of financial and banking sectors, QCB governor said. (Source: The Peninsula)  Qatar Central Bank has issued a new policy which allow residents with expired Qatar IDs to continue their business with financial institutions in Qatar for 90 days after the expiry date. (Source: Gulf Times)  According to the S&P, banks based in Qatar, the UAE and Saudi Arabia enjoy the highest capitalisation, based on risk-adjusted capital (RAC) ratios calculated. (Source: The Peninsula) Gulf Times) (Source: AA)  Turkey’s total trade deficit increased by 85.0% YoY to USD 8.1bn in Sep-17. Exports rose by 8.7% YoY while imports rose by 30.6% YoY. (Source: Market Insider) GCC NEWS  Saudi Arabia’s King Salman removed one of the royal family’s most prominent princes from his ministerial role and arrested other royals and top officials in an anti-corruption drive.  UAE federal government departments' total expenses stood at AED 31.5bn in 9M-17. Public services' expenses accounted for 33.0% while public safety affairs expenditures accounted for 21.0%. (Source: Trade Arabia) 1
2. WEEKLY WRAP November 05 , 2017 EQUITY Index Price S&P 500 WTD %Δ MTD %Δ YTD %Δ COMMENTARY Index Price WTD %Δ MTD %Δ YTD %Δ 2,587.8 0.3 0.5 15.6 MSCI EM 1,126.2 1.4 0.6 30.6 23,539.2 0.4 0.7 19.1 S&P GCC 1,620.3 (0.9) (0.1) 3.1 Nasdaq 6,295.6 1.3 0.8 29.4 Dow Jones Islamic 3,551.0 1.0 0.6 22.2 FTSE 100 7,560.4 0.7 0.9 5.8 KSA (TASI) 6,956.5 0.7 0.3 (3.5) DAX 30 13,478.9 2.0 1.9 17.4 UAE (DFM) 3,622.2 (0.8) (0.4) 2.6 CAC 40 5,518.0 0.4 0.3 13.5 UAE (ADX) 4,465.2 (0.1) (0.3) (1.8) 111,292.8 3.2 1.0 42.4 Qatar (DSM) 8,146.2 0.2 (0.2) (21.9) 13.9 DJIA BIST 100 Nikkei 22,539.1 2.4 2.4 17.9 Kuwait (KSE) 6,548.4 (1.1) 0.5 Sh. Comp 3,371.7 (1.3) (0.6) 8.6 Bahrain (BAX) 1,282.9 0.4 0.5 5.1 Hang Seng 28,603.6 0.6 1.3 30.0 Oman (MSM) 5,040.2 1.6 0.6 (12.8) Sensex 33,685.6 1.6 1.4 26.5 Jordan (ASEGI) 2,112.1 0.5 0.9 (2.7) Source: Bloomberg GLOBAL INDICES Weekly Performance (%) BIST 100 Nikkei DAX 30 Sensex MSCI EM Nasdaq FTSE 100 Hang Seng Jordan (ASEGI) DJIA CAC 40 S&P 500 Sh. Comp YTD Performance (%) 3.2 0.7 0.6 0.5 0.4 0.4 0.3 (1.3) (2.0) (1.0) 0.0 1.0 2.0 3.0 (10.0) 4.0 Source: Bloomberg 30.6 30.0 29.4 26.5 19.1 17.9 17.4 15.6 13.5 8.6 5.8 0.0 10.0 20.0 30.0 40.0 50.0 Source: Bloomberg GCC INDICES Weekly Performance (%) Oman (MSM) 1.6 KSA (TASI) 2.6 UAE (ADX) (1.8) KSA (TASI) (0.8) (3.5) Oman (MSM) (0.9) (12.8) Qatar (DSM)(21.9) (1.1) (2.0) 3.1 UAE (DFM) (0.1) S&P GCC 5.1 S&P GCC 0.2 UAE (ADX) 13.9 Bahrain (BAX) 0.4 Qatar (DSM) 22.2 Kuwait (KSE) 0.7 Bahrain (BAX) Kuwait (KSE) Dow Jones Islamic 1.0 UAE (DFM) Qatar The QE index rose 0.2% during the last week. Increased buying bets from foreign institutional and retail investors contributed to the overall gains in the market. Total trading value and volume fell with Banking, Industrial and Real Estate sectors together accounting for 76.1% of the total trade volume. Among the individual stocks, Qatar Gas Transport Co rose 1.5%, as higher oil prices improved the average daily rate prospects for the company. Out of the total 45 listed companies, 18 advanced, 24 declined and 3 remained unchanged. YTD Performance (%) Dow Jones Islamic (1.0) 0.0 1.0 (30.0) (20.0) (10.0) 0.0 2.0 Source: Bloomberg 10.0 20.0 US markets closed higher during the last week, following an encouraging assessment provided by US Fed on the domestic economy and as the Trump administration unveiled the tax bill during the latter part of the week. Nasdaq outperformed its peer indices, helped by upbeat earnings from index heavy-weight Apple and other blue chip companies. S&P 500 index inched 0.3% higher, led by gains in Energy and Real Estate shares. Energy shares tracked higher oil prices during the week. The Stoxx Europe 600 index settled 0.7% higher, as the Spanish central government took control of the Catalan region. The UK’s benchmark closed 0.7% higher, after the Bank of England stated that any further rate hike would be very gradual. The Nikkei index jumped 2.4%, helped by robust earnings of listed companies and weakness in JPY. GCC GCC markets closed mixed during the last week. The Saudi Arabian benchmark settled 0.7% higher, tracking gains in oil prices and as index compiler FTSE Russell announced that it would launch Saudi-specific equity indices. Petrochemical companies were among the notable gainers, as higher oil prices improved pricing prospects of the companies. In Dubai, Emaar Properties fell 1.9%, after unveiling the price range of its real estate development unit. The Kuwaiti benchmark dropped 1.1%, amidst political crisis in the nation. ZAIN Kuwait plunged 7.0%, after reporting a decline in Q3-17 net income. 42.4 BIST 100 MSCI EM Hang Seng Nasdaq Sensex DJIA Nikkei DAX 30 S&P 500 CAC 40 Sh. Comp FTSE 100 Jordan (ASEGI) (2.7) 2.4 2.0 1.6 1.4 1.3 Global 30.0 Source: Bloomberg DSM INDEX 10,900 8,146.2 9,900 8,900 7,900 May-17 Jun-17 Index Jul-17 50 SMA 100 SMA Sep-17 200 SMA Oct-17 Indicator Price Last Close 8,146.2 MAVG 50 8,408.4 MAVG 100 8,812.0 MAVG 200 9,623.5 6 Month High 10,144.9 6 Month Low 8,110.2 RSI (14 Days) 38.5 Source: Bloomberg 2
3. WEEKLY WRAP November 05 , 2017 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 2.81 3.00 2.50 2.00 2.19 1.99 3.04 1.62 3.30 3.00 2.00 1.78 2.72 2.00 1.54 1.00 4.42 4.00 2.56 1.50 0.50 5.00 2.33 1.23 1.00 0.79 3.05 3.55 4.29 3.38 1.82 0.00 0.00 2 Yrs 5 Yrs 7 Yrs Current 10 Yrs 2 Yrs 30 Yrs 5 Yrs Current Last Year Source: Bloomberg 7 Yrs 10 Yrs 30 Yrs Last Year Source: Bloomberg CDS Price (BPS) WTD Δ (BPS) MTD Δ (BPS) YTD Δ (BPS) US 28.3 0.0 0.0 (1.7) UK 24.6 (1.4) (0.5) (8.5) Germany 12.2 (0.9) (1.1) (11.8) France 20.3 (1.5) (1.6) (19.0) Italy 119.1 (10.5) (8.5) (43.2) Greece 509.7 (8.9) (14.0) (616.6) Russia 135.0 7.3 4.4 (99.0) Japan 34.1 (0.5) (0.5) 2.1 Turkey 199.7 12.9 13.0 (75.7) Brazil 175.0 0.3 1.5 (108.3) Egypt 352.5 4.6 (0.8) (106.7) Abu Dhabi 60.0 (2.0) (1.0) (4.4) Bahrain 270.3 24.5 22.7 (42.2) Dubai 134.4 (1.5) 4.6 (20.4) Qatar 103.1 (0.2) 0.1 17.8 Saudi Arabia 83.7 0.2 0.4 (4.6) iTraxx Europe 49.8 (2.2) (0.7) (23.0) iTraxx Europe Crossover 223.6 (11.1) (3.5) (67.8) CDX North America IG 53.2 (0.0) 0.6 (14.5) CDX North America HY 315.5 4.7 6.0 (38.6) iTraxxSovX CEEMEA NA NA NA NA iTraxx Europe Senior Financial 16.5 (3.3) (1.3) (53.6) iTraxx Europe Sub Financial 17.8 (5.3) (4.8) (106.9) 5 Years CDS Global GCC International Credit Spreads Source: Bloomberg 3
4. WEEKLY WRAP November 05 , 2017 Tenor Qatar Govt. Int. Bonds Maturity Price (USD) Z Spread (BPS) Yield (%) QGS 2018 100.0 47.5 QGIB 2019 106.4 24.6 QGIB 2020 105.9 63.0 Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 1.391 0.011 0.394 6M LIBOR 1.589 0.016 0.271 WTD Δ (USD) YTD Δ (USD) 1.88 NA (0.4) 12M LIBOR 1.863 0.015 0.178 1.86 (0.0) (3.7) 2 years 1.823 0.001 0.367 2.38 0.1 (2.2) 5 years 2.076 (0.041) 0.099 10 years 2.312 (0.068) (0.027) 2.560 (0.065) (0.035) Qatari Diar 2020 98.0 99.0 2.90 0.1 (0.1) QGIB 2021 105.5 98.6 2.88 NA (1.9) 30 years QGIB 2022 105.7 103.3 2.99 0.1 (1.4) Source: Bloomberg QGS 2023 99.9 119.4 3.21 0.1 (2.4) Commentary QGIB 2026 97.8 130.4 3.52 0.2 1.1 QGIB 2030 156.6 165.3 3.96 0.5 1.6 QGIB 2040 128.2 191.3 4.37 0.8 3.0 QGIB 2042 119.8 191.2 4.38 1.0 3.0 QGIB 2046 103.2 190.5 4.41 0.9 3.0 US Treasury yields fell amidst a slew of mixed economic data which included upbeat US manufacturing and services sector data and underwhelming US jobs data for Oct17. The yields were impacted as US President Donald Trump appointed Jerome Powell as new Federal Reserve chairman, who is viewed as more dovish. UK gilt yields dropped amidst BoE’s first interest rate hike by 25 bps in 10 years, as the central bank cautioned of future rate hikes to be gradual and to a limited extent. Italian government bond yields fell significantly on back of ratings upgrade for Italy by S&P and approval of a new electoral system. Source: Bloomberg, QCB US Swap Rates COMMODITIES Commodities Price Commentary Brent (USD/bbl) 62.1 WTI Crude (USD/bbl) 55.6 Oil prices gained this week reflecting upbeat outlook, as OPEC-led production cuts tightened the market and drained crude inventories. Expectations on extension of the OPEC led supply cut till end of 2018 also kept the prices rising. Baker Hughes data showing biggest decline in US oil rig count since May-16 also supported the prices. Natural gas prices rose on back of decline in natural gas rig count. Copper prices climbed this week, on back of expectations for surging demand from electric vehicles. Gold prices rose after Federal Reserve kept the interest rate unchanged, however the gains were capped on back of upbeat US economic data and strength in greenback. Natural Gas (USD/mmBTU) 3.0 Gold (USD/t oz.) 1,269.2 Silver (USD/t oz.) 16.8 Copper (USD/lb) 311.8 Source: Bloomberg Weekly Performance (%) YTD Performance (%) Natural Gas Copper 8.4 WTI Crude Brent Natural Gas 0.1 0.0 5.3 WTI Crude 0.5 Gold 9.2 Silver 0.5 Copper 10.2 Brent 2.7 Silver 24.4 Gold 3.2 2.0 4.0 6.0 8.0 3.6 (19.9) (30.0) 10.0 Source: Bloomberg (20.0) (10.0) 0.0 10.0 20.0 30.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.3107 USD/INR 64.0475 EUR/USD 1.1638 USD/CNY 6.6390 CAD/USD 0.7835 USD/TRY 3.8875 AUD/USD 0.7650 USD/EGP 17.6465 0.6907 USD/ZAR 14.2240 114.0700 USD/RUB 59.0564 NZD/USD USD/JPY Commentary USD ended higher against its major peers, buoyed by better-than-expected US factory orders and services sector growth data that came in 12-year high, offsetting downbeat Oct-17 jobs data. GBP weakened against the greenback despite first interest rate hike in 10 years, as BOE indicated only two further hikes over the next three years. EUR remained flattish, as upbeat Eurozone GDP data was offset by softerthan-expected Eurozone inflation data. CAD edged higher as stronger-than-expected domestic jobs data supported the case for further interest rate increase. TRY slumped after inflation rate reached 11.9% in Oct-17. Source: Bloomberg Weekly Performance (%) YTD Performance (%) 4
5. WEEKLY WRAP November 05 , 2017 NZD INR CAD CNY EGP EUR JPY AUD GBP ZAR RUB TRY EUR AUD GBP CAD INR CNY RUB EGP JPY NZD ZAR TRY 0.4 0.4 0.3 0.2 0.2 0.0 (0.3) (0.4) (0.4) (0.7) (1.6) (2.6) (3.0) Source: Bloomberg (2.5) (2.0) (1.5) (1.0) (0.5) 0.0 0.5 1.0 10.4 6.1 6.0 5.3 5.1 4.9 4.2 2.7 2.6 (0.4) (3.3) (9.4) (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 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. 5