GCC Daily Market Update - 11 July

Transcription

1. July 11 , 2021 ECONOMIC UPDATE & NEWS Region Event Period Survey Actual Prior US Initial Jobless Claims Jul-03rd 350k 373k 371k Russia Gold and Forex Reserve Jul-02nd -- 590.7b 592.4b 1.80 Jul 75.2 63.3 79.8 1.70 May ¥1,807.2b ¥1,979.7b ¥1,321.8b 1.60 -- (1.80%) (6.90%) MBA Mortgage Applications UK Industrial Production MoM May 1.40% 0.80% (1.00%) Italy Industrial Production MoM May 0.30% (1.50%) 1.50% France Industrial Production MoM May 0.80% (0.30%) 0.10% May 0.90% (3.70%) 1.20% Jun 6.40% 6.50% 6.00% Germany Factory Orders MoM Russia CPI YoY Source: Bloomberg GLOBAL NEWS  The IMF’s Managing Director said that further fiscal support in the US could raise inflationary pressures ultimately resulting in raising interest rates earlier than anticipated. (Source: Reuters)  As per the minutes of the US Fed meeting on 15th-16th June-21, officials discussed lowering asset purchases but also expressed the requirement for patience. (Source: CNBC)  The UK’s Health Minister said the number of COVID-19 cases in the nation will increase significantly as the UK Prime Minister announced plans to end COVID-19 restrictions from 19th July-21. (Source: Reuters) 1.40 1.30 1.36 1.20 05-Jul Jul-02nd US 1.50 28-Jun (0.30%) 21-Jun (0.30%) 14-Jun 0.50% 07-Jun May 31-May (9.1) 24-May 21.9 17-May 5.5 10-May Germany Industrial Production MoM Jul 03-May Germany ZEW Survey Current 26-Apr BoP Current Account 19-Apr Japan 12-Apr Germany ZEW Survey Expectations UST 10yr Yield Source: Bloomberg  The IMF expects Saudi real GDP to grow by 2.4% in 2021 after a 4.1% decline in 2020, as the non-oil economy expands 4.3%. (Source: Arab News)  Saudi Arabia’s new housing supply rose by 29.0% YoY and 0.6% QoQ in Q1-21, as per Housing Ministry. (Source: Arab News)  Saudi Arabia closed the July-21 issuance under the government's SAR sukuk program worth SAR 10.4bn (USD 2.8bn). (Source: Saudi Gazette)  The governor of Saudi Arabia’s central bank announced that the cut in foreign reserves during April-21 and May-21 to USD 433.0bn were primarily to finance a rebound in imports. (Source: Arab News)  Saudi Arabia’s Transport Minister announced that the nation will invest over SAR 500.0bn (USD 133.3bn) in airports, sea ports, rail and other infrastructure in next 10 years. (Source: Reuters)  Saudi Arabia's energy minister pushed back against opposition by the UAE to a proposed OPEC+ deal and urged for compromise and rationality to secure agreement when group resumes. (Source: Reuters)  The EU projected that the Eurozone’s economy will grow by 4.8% in 2021, as compared to 4.3% in its May-21 forecast. (Source: Reuters)  ECB policy makers agreed to raise their inflation target to 2.0% for 2021 and make room to exceed it when required. (Source: Bloomberg)  China will lower reserve requirement ratio (RRR) for all banks by 50.0 bps, effective 15th July-21, releasing around CNY 1.0tn (USD 154.2bn) in long-term liquidity. (Source: Reuters)  Saudi Arabia has changed its rules on imports from other GCC nations to exclude goods made in free zones with the help of Israeli input from preferential tariff concessions. (Source: Reuters)  Japan's government expects the economy to recover to pre-pandemic levels by the end of 2021 and revised its FY 2021-22 economic growth rate to 3.7% from previous 4.0%. (Source: US News)  The Saudi Ministry of Communications and Information Technology (MCIT) launched an USD 18.0bn plan to construct a network of largescale data centers across the nation. (Source: Arab News)  Japanese Prime Minister declared a state of emergency in Tokyo, to curb coronavirus infections through August-22. (Source: US News)  The IMF anticipated Oman’s economy to grow by 2.5% in 2021 and to 3.0% average growth over the medium term. (Source: Times of Oman)  Fitch Ratings has cut India’s growth forecast to 10.0% for current fiscal, from earlier 12.8% due to slowing recovery. (Source: Financial Express)  Bahrain’s GDP fell by 2.1% YoY and 0.1% QoQ in Q1-21, due to 3.0% YoY decline in the non-oil economy amid COVID-19 restrictions. The oil sector rose by 2.0%. (Source: Reuters)  Kuwait's Public Authority for Roads and Transportation (PART) is presently executing 19 key road projects across the nation valued at KWD 1.5bn (USD 4.9bn). (Source: Trade Arabia) GCC NEWS  GCC region will have 62.0mn 5G mobile subscriptions by 2026, accounting for second highest 5G market penetration internationally, as per 20th edition of the Ericsson Mobility Report. (Source: Trade Arabia)  As per CBUAE, number of financial institutions registered in the UAE at the end of H1-21 reached 260. (Source: Emirates News Agency)   UAE’s Ministry of Energy backed raising oil production from August-21 but suggested postponing a decision by OPEC+ on extending its global oil supply agreement beyond April-22. (Source: Arab News) Qatar’s real estate sector saw 28.3% YoY increase in the total number of building permits issued in June -21, as per PSA. (Source: Gulf Times)  Qatar witnessed 150.0% YoY rise in the total number of registered new vehicles during May-21 to 4,695, as per PSA. (Source: Peninsula Qatar)  Dubai welcomed 3.7mn tourists since the city reopened its borders to global visitors a year ago, as per Dubai Tourism. (Source: Arabian Business)   CEO of Dubai’s free zone DMCC announced that the center welcomed 1,230 new member companies in H1-21. (Source: Emirates News Agency) The CEO of Qatari-Russian Centre for Cooperation (QRCC) said that trade between Qatar and Russia reached USD 296.0mn in 2020 compared to USD 201.2mn in 2019. (Source: Gulf Times)   Emirate of Sharjah sold 10-year sukuk worth USD 750.0mn at a rate of 3.2%. (Source: Reuters) Qatar Central Bank (QCB) issued treasury bills for July-21 valued at QAR 600.0mn (USD 161.9mn). These comprised of QAR 300mn for three months at an interest rate of 0.33%, QAR 200mn for six months at 0.42% and QAR 100mn for nine months at 0.35%. (Source: Gulf Times) QATAR NEWS 1
2. July 11 , 2021 EQUITY Index Price S&P 500 WTD %Δ MTD %Δ YTD %Δ Index Price WTD %Δ 4,369.6 0.4 1.7 16.3 MSCI EM DJIA 34,870.2 0.2 1.1 13.9 MSCI GCC Nasdaq 14,826.1 0.7 1.9 15.0 Dow Jones Islamic FTSE 100 MTD %Δ YTD %Δ 1,318.2 (2.7) (4.1) 2.1 666.1 (1.1) (1.0) 21.4 6,065.0 (0.1) 0.8 11.3 7,121.9 (0.0) 1.2 10.2 KSA (TASI) 10,825.0 (1.4) (1.4) 24.6 DAX 30 15,687.9 0.2 1.0 14.4 UAE (DFM) 2,779.8 (1.3) (1.1) 11.5 CAC 40 6,529.4 (0.4) 0.3 17.6 UAE (ADX) 6,963.2 0.9 1.9 38.0 BIST 100 Nikkei 1,378.3 0.1 1.6 (6.7) Qatar (DSM) 10,843.0 0.3 1.0 3.9 27,940.4 (2.9) (3.0) 1.8 Kuwait (KSE) 6,367.3 (0.3) (0.3) 14.8 Sh. Comp 3,524.1 0.2 (1.9) 1.5 Bahrain (BAX) 1,575.0 (0.8) (0.8) 5.7 Hang Seng 27,344.5 (3.4) (5.1) 0.4 Oman (MSM) 4,120.4 1.0 1.4 12.6 Sensex 52,386.2 (0.2) (0.2) 9.7 Jordan (ASEGI) 2,080.9 (1.5) (0.9) 25.6 Source: Bloomberg GLOBAL INDICES Weekly Performance (%) Nasdaq S&P 500 DAX 30 DJIA Sh. Comp BIST 100 FTSE 100 Sensex CAC 40 MSCI EM Nikkei Hang Seng YTD Performance (%) 0.7 0.4 0.2 0.2 0.2 0.1 CAC 40 S&P 500 Nasdaq DAX 30 DJIA FTSE 100 Sensex MSCI EM Nikkei Sh. Comp Hang Seng BIST 100 (0.0) (0.2) (0.4) (2.7) (2.9) (3.4) (4.0) (2.0) 0.0 2.0 (22.0) Source: Bloomberg 17.6 16.3 15.0 14.4 13.9 10.2 9.7 2.1 1.8 1.5 0.4 (6.7) (12.0) (2.0) 8.0 18.0 YTD Performance (%) UAE (DFM) KSA (TASI) 14.8 Oman (MSM) (0.3) Bahrain (BAX) 21.4 Kuwait (KSE) (0.1) Kuwait (KSE) 24.6 MSCI GCC 0.3 Dow Jones Islamic 38.0 KSA (TASI) 0.9 Qatar (DSM) MSCI GCC UAE (ADX) 1.0 UAE (ADX) 12.6 UAE (DFM) 11.5 Dow Jones Islamic 11.3 (0.8) (1.1) Bahrain (BAX) (1.3) 5.7 Qatar (DSM) (1.4) Source: Bloomberg 3.9 0.0 (2.0) (1.5) (1.0) (0.5) 0.0 0.5 1.0 1.5 10.0 20.0 The US equity markets advanced in the last week, primarily due to the steep decline in US Treasury yields which made the equity investments more attractive for the market participants. The S&P 500 index ended higher by 0.4% as gains in Real Estate stocks were offset by losses in Energy and Communication Services stocks. The European markets changed moderately on account of concerns over surge in coronavirus cases in the nation hampering the economic growth. The Stoxx Europe 600 index ended the week marginally higher 0.2% with ECB President announcing adoption of a new inflation target of 2.0% and affirming a persistent monetary policy action. The DAX 30 Index advanced by 0.2%, boosted by increase in German Services Purchasing Managers' Index for June-21. In Asia, the Japanese markets closed lower with the Nikkei index declining by 2.9%. The Japanese markets were impacted by the Government’s decision to place Tokyo under state of emergency which will last throughout the Olympics held in the nation until August-22 to curb a recent rise in coronavirus cases. Most GCC indices ended on a negative note in the last week. The Saudi Arabian index declined by 1.4% due to losses in Food & Staples Retailing and Banking stocks. Dubai’s benchmark ended 1.3% lower last week, as losses in Real Estate & Construction and Services stocks weighed on the index. 28.0 GCC INDICES Oman (MSM) Global GCC Source: Bloomberg Weekly Performance (%) Commentary 30.0 40.0 Qatar The QE index increased 0.3% in the previous week. Gains in Transportation and Real Estate stocks supported the index. Buying support on part of Foreign institutional investors supported the index. Trade turnover and volume declined, with Banking & Financial Services and Industrial accounting for about 55.2% of the total traded value. Out of the total 48 traded stocks, 47 exchanged hands, 23 advanced, 23 declined and 1 remained unchanged. Source: Bloomberg DSM INDEX 12,000 10,843.0 11,000 10,000 9,000 Jan-21 Mar-21 Index Apr-21 50 SMA 100 SMA May-21 200 SMA Indicator Price Last Close 10,843.0 MAVG 50 10,784.4 MAVG 100 10,577.5 MAVG 200 10,441.8 6 Month High 10,968.9 6 Month Low 9,952.9 RSI (14 Days) 57.2 Source: Bloomberg 2
3. July 11 , 2021 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 2.50 3.50 1.99 2.00 1.34 1.50 0.50 0.22 0.65 0.39 0.00 2 Yrs 3 Yrs Current 5 Yrs 10 Yrs Last Year 30 Yrs Source: Bloomberg 1.28 0.61 0.32 2 Yrs 3 Yrs Current 5 Yrs 10 Yrs Last Year 30 Yrs Source: Bloomberg Qatar Govt. Int. Bonds CDS 5 Years CDS 2.32 1.23 0.99 0.50 0.19 0.16 0.93 1.00 0.31 3.20 2.07 2.00 0.79 1.00 0.00 2.50 1.36 1.50 3.01 3.00 Price (BPS) WTD Δ (BPS) MTD Δ (BPS) YTD Δ (BPS) Maturity Global Price (USD) Z Spread (BPS) Yield (%) WTD Δ (USD) YTD Δ (USD) QGIB 2022 102.3 (1.8) (0.00) (0.1) (2.1) QGS 2023 104.4 11.2 0.27 (0.1) (1.0) US 11.5 0.1 0.1 (5.3) QGIB 2023 106.2 9.4 0.30 (0.0) (1.4) UK 10.6 0.8 (0.5) (9.0) QGIB 2024 107.2 19.5 0.60 (0.1) (1.3) (1.4) QGIB 2025 108.9 32.4 0.95 (0.0) (1.6) QGIB 2026 109.5 40.6 1.23 (0.1) (1.9) QGIB 2028 118.1 59.0 1.64 0.1 (3.2) Germany 11.0 1.1 (0.1) France 22.8 0.2 0.1 4.8 Italy 73.7 1.1 1.1 (26.2) QGIB 2029 115.0 73.6 1.87 (0.0) (3.9) Greece 73.0 3.0 3.1 (30.9) QGIB 2030 159.8 110.4 2.27 (0.5) (11.0) Russia 87.5 1.9 1.4 (0.5) QGIB 2030 113.2 84.7 2.07 0.2 (4.7) QGIB 2040 146.5 152.8 3.07 (0.2) (11.3) Japan 19.0 0.3 0.3 0.7 QGIB 2042 139.6 152.7 3.11 0.1 (10.4) Turkey 391.6 3.2 4.1 81.2 QGIB 2046 124.7 153.6 3.17 0.3 (8.4) Brazil 176.4 9.2 7.7 30.9 QGIB 2048 133.2 159.1 3.23 0.4 (7.7) QGIB 2049 129.3 155.8 3.21 0.6 (7.5) QGIB 2050 122.5 153.5 3.19 0.8 (8.3) Egypt 367.1 19.8 26.5 15.1 GCC Abu Dhabi Bahrain Dubai Qatar Saudi Arabia Source: Bloomberg, QCB 42.6 2.5 3.2 2.9 239.3 12.4 29.6 (14.3) Tenor 95.3 2.2 2.4 (24.9) 3M LIBOR 0.119 (0.019) (0.119) 6M LIBOR 0.157 (0.006) (0.101) 12M LIBOR 0.239 (0.006) (0.103) 2 years 0.300 (0.012) 0.100 5 years 0.877 (0.098) 0.443 10 years 1.364 (0.040) 0.434 30 years 1.719 (0.055) 0.317 43.8 3.0 3.4 3.7 59.3 3.3 4.5 (8.6) 46.7 0.7 (0.2) (1.1) International Credit Spreads iTraxx Europe US Swap Rates 233.5 5.4 1.6 (7.5) Source: Bloomberg CDX North America IG 48.1 1.1 0.4 (2.2) Commentary CDX North America HY 276.2 6.9 2.9 (17.0) 5.3 (0.2) (0.2) (4.0) 69.4 0.9 0.9 (19.2) iTraxx Europe Crossover iTraxx Europe Senior Financial iTraxx Europe Sub Financial Price (%) Weekly Δ (BPS) YTD Δ (BPS) The US 10-year bond yield declined as minutes from the US Fed's 15th-16th June 2021 meeting showed progress on economic recovery was not satisfactory. Also Labour Department said job openings increased higher in May-21 while hiring declined. The German 10-year bund yield declined as Germany’s industry output decreased by 0.3% MoM in May-21, below analysts’ expectations. Source: Bloomberg 3
4. July 11 , 2021 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 75.6 WTI Crude (USD/bbl) 74.6 WTI oil prices closed lower by declining 0.8% in the last week weighed down by concerns over rising cases of new coronavirus impacting the global economic recovery. Brent declined during the week after talks between the OPEC+ nations fell apart after Saudi Arabia refused to raise its oil output levels. Copper prices increased in the last week boosted by manufacturing output surging in places like the US, Germany and Japan. Also, the demand for the metal is likely to rise as copper plays a significant role in the world’s attempt to shift to green energy. Gold prices advanced in last week as the safe-haven asset’s demand rose over concerns of slowdown in global economic recovery due to acceleration in coronavirus cases around the world. Natural Gas (USD/mmBTU) 3.7 Gold (USD/t oz.) 1,810.6 Silver (USD/t oz.) 26.2 Copper (USD/lb) 435.3 Source: Bloomberg Weekly Performance (%) YTD Performance (%) Copper WTI Crude 1.6 Gold Natural Gas Brent Silver (0.8) Copper (0.8) Silver 44.7 23.7 (0.8) Gold (4.5) (1.0) (1.5) 45.8 Natural Gas (0.7) WTI Crude 53.7 Brent 1.5 (1.0) (0.5) 0.0 0.5 1.0 1.5 2.0 (10.0) Source: Bloomberg 0.0 10.0 20.0 30.0 40.0 50.0 60.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.3931 USD/INR 74.1375 EUR/USD 1.1906 USD/CNY 6.4790 CAD/USD 0.8035 USD/TRY 8.6615 AUD/USD 0.7488 USD/EGP 15.6894 NZD/USD 0.6986 USD/ZAR 14.2182 110.1400 USD/JPY 74.5349 USD/RUB Commentary The USD declined against the basket of major currencies in the last week, with the dollar index decreasing by 0.1% to 92.1. The greenback was impacted by the release of lower than expected rise in the US ISM Non-Manufacturing Purchasing Managers Index (PMI) data for June-21. The EUR increased against the USD with release of better than expected increased in Eurozone Markit Composite PMI data for June-21. The GBP advanced against the greenback after the release of higher than expected UK Composite PMI data for the month of June-21 .The CAD declined against the greenback after the release of higher than expected reading of unemployment rate in Canada during the month of June-21. Source: Bloomberg Weekly Performance (%) JPY GBP TRY ZAR EUR INR CNY EGP AUD NZD CAD RUB (1.8) (2.0) Source: Bloomberg YTD Performance (%) 0.8 0.6 0.4 0.2 0.1 (0.1) (0.1) (0.2) (0.5) (0.6) (1.0) (1.5) (1.0) (0.5) 0.0 0.5 1.0 ZAR CAD GBP CNY EGP RUB INR AUD NZD EUR JPY TRY 3.3 2.3 1.7 0.7 0.3 (0.7) (2.0) (2.7) (2.8) (2.8) (6.2) (14.2) (20.0) (15.0) (10.0) (5.0) 0.0 5.0 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