GCC Daily Market Update - 14 January

Transcription

1. WEEKLY WRAP January 14 , 2018 ECONOMIC UPDATE & NEWS Period Survey Actual Prior Germany Industrial Production MoM Nov 1.80% 3.40% (1.20%) France Industrial Production MoM Nov (0.50%) (0.50%) 1.70% 2.60 UK Industrial Production MoM Nov 0.40% 0.40% 0.20% 2.50 US MBA Mortgage Applications Jan-05th -- 8.30% (1.60%) Russia CPI YoY Dec F -- 2.50% 2.50% 2.40 -- 432.6b 432.0b 2.30 245k 261k 250k 1.20% 0.00% 0.60% US CPI MoM Dec 0.10% 0.10% 0.40% US Retail Sales Advance MoM Dec 0.50% 0.40% 0.90% Source: Bloomberg GLOBAL NEWS 2.10 08-Jan 1.20% 0.60% 01-Jan 1.20% Nov 25-Dec Dec F Industrial Production MoM 18-Dec CPI YoY Italy 11-Dec France 2.20 Nov ¥1836.1b ¥1347.3b ¥2176.4b 04-Dec Current Account Balance 27-Nov Japan 20-Nov Jan-06th 13-Nov Initial Jobless Claims 06-Nov Gold and Forex Reserve US 2.50 30-Oct Russia Jan-05th UST 10yr Bond 23-Oct Event 16-Oct Region Source: Bloomberg establish business in Saudi Arabia. (Source: Arabian Business)  Bahrain’s annualized real GDP growth rate reached 3.6% and nominal GDP annual growth rate was 6.9% in Q3-17, driven by rise in infrastructure investments. (Source: Trade Arabia)  US goods and service deficit rose by 3.3% MoM to USD 50.5bn in Nov17, driven by rise in imports by 2.4% and exports by 2.2%. (Source: BAE)  US unemployment rate remained unchanged at 4.1% in Dec-17, due to increase of 148,000 jobs in the month. (Source: Forbes)   Eurozone’s CPI rose 1.4% YoY in Dec-17 as compared to 1.5% YoY in Nov-17, driven by a rise in prices of energy by 3.0% and food, alcohol & tobacco prices by 2.1%. (Source: Eurostat) Bahrain raised petrol prices of Octane 91 by 12.0% to 140 fils a litre (37 US cents), while it rose prices of Octane 95 by 25.0% to 200 fils a litre. (Source: Trade Arabia)  Eurozone’s industrial PPI rose by 0.6% MoM in Nov-17, driven by a rise in prices of energy by 2.3%, intermediate goods by 0.2% and capital goods by 0.1%. (Source: Eurostat) Kuwait is planning to implement VAT system or might impose a progressive tax system alternative to VAT, if the former is not sanctioned by the parliament. (Source: Zawya)  Oman inflation rate rose by 1.7% YoY in Dec-17, driven by rise in prices of furnishings, household equipment and routing house maintenance by 3.6% and transport by 2.8%. (Source: NCSI)  Oman has attracted FDI worth OMR 8.0bn in 2017, a rise of OMR 800mn from 2016. (Source: Times of Oman)  Oman received grants amounting to USD 201.0mn from Saudi Arabia for development of two projects at the Port of Duqm. (Source: Trade   Eurozone’s seasonally adjusted unemployment rate reached 8.7% in Nov-17 as compared to 8.8% in Oct-17. (Source: Eurostat)  Japan’s foreign reserves rose by USD 3.0bn over a month to USD 1,264.3bn in Dec-17, with foreign currency reserves standing at USD 1,202.1bn during the same period. (Source: MOF)  Arabia) China’s CPI rose by 1.8% YoY, while PPI rose by 4.9% YoY in Dec-17. (Source: Market Insider)  China’s exports rose by 10.9% YoY and import grew by 4.5% YoY, resulting in a trade balance of CNY 361.98bn in Dec-17. (Source: FXstreet)  China’s foreign exchange reserves rose by USD 20.2bn MoM to reach USD 3.14tn in Dec-17, driven by tight regulations and a strong yuan. (Source: Reuters)  QATAR NEWS  Qatar’s total deposits of commercial banks rose by 1.0% MoM to QAR 802.3bn in Nov-17, driven by rise in public sector deposits by 3.3% to QAR 308.3bn. (Source: MDPS)  Qatar reported registration of 2,572 new companies in Dec-17. Out of the total, 63.0% were limited liability companies. (Source: The Peninsula)  Qatar and Turkey’s trade volume rose by 46.0% YoY to USD 1.0bn in 2017 and is expected to reach USD 2.0bn in 2018, Turkey’s ambassador stated. (Source: Gulf Times)  Qatar’s building permits fell by 16.3% MoM to 701 in Dec-17 of which Wakrah accounted for 30% of the total building permits, followed by Rayyan (23%). (Source: MDPS)  Almost half of Qatar’s outstanding sukuk, worth of over QR25bn, will mature in 2018. This accounts for 44% of the value of sukuk outstanding at the end of 2016. (Source: Peninsula Qatar)  The government of Qatar has approved a law which allows 100% ownership of foreign investors from the previous limit of 49% in most sectors of the economy. (Source: MEMO)  South Africa is planning to double its bilateral trade with Qatar to USD 1.0bn by 2020, South African embassy stated. (Source: Qatar Tribune) GCC NEWS  Global sukuk issuance rose by 45.3% YoY to USD 97.9bn in 2017, driven by the huge issuance from some GCC countries, according to S&P Global Rating report. (Source: Trade Arabia)  UAE Cabinet has agreed to distribute 70.0% of VAT’s revenue to the local government to support projects developments. (Source: Trade Arabia)  Dubai’s total number of real estate transactions rose by 14.0% YoY to 69,000, while the total value rose by 6.0% YoY to AED 285.0bn in 2017. (Source: Dubai Land Department)  The Emirates NBD Dubai Economy Tracker Index fell to 54.7 in Dec-17 from 55.3 in Nov-17, driven by low output/ activity growth of 56.1 in Dec-17 from 59.5 in Nov-17. (Source: Emirates NBD Research)  Abu Dhabi Global Market signed a Fintech cooperation agreement with the Bahrain Economic Development Board to provide a framework for information sharing. (Source: Trade Arabia)  Saudi Arabian General Investment Authority has introduced a new licensing service to attract global entrepreneurs, who are willing to The government of Oman has started marketing 5 year notes at treasuries +205bp area, a 10 year bond at +325bp area and a 30 year tranche at +410bp area. (Source: Reuters) 1
2. WEEKLY WRAP January 14 , 2018 EQUITY Index Price S&P 500 WTD %Δ MTD %Δ YTD %Δ COMMENTARY Index Price WTD %Δ MTD %Δ YTD %Δ 2,786.2 1.6 4.2 4.2 MSCI EM 1,208.2 0.6 4.3 4.3 25,803.2 2.0 4.4 4.4 S&P GCC 1,680.4 2.9 5.5 5.5 Nasdaq 6,758.5 1.6 5.7 5.7 Dow Jones Islamic 3,780.7 0.9 3.9 3.9 FTSE 100 7,778.6 0.7 1.2 1.2 KSA (TASI) 7,338.0 0.8 1.5 1.5 DAX 30 13,245.0 (0.6) 2.5 2.5 UAE (DFM) 3,494.6 0.9 3.7 3.7 CAC 40 5,517.1 0.8 3.8 3.8 UAE (ADX) 4,591.1 0.9 4.4 4.4 114,644.6 (1.7) (0.6) (0.6) Qatar (DSM) 9,135.9 5.9 7.2 7.2 DJIA BIST 100 Nikkei 23,653.8 (0.3) 3.9 3.9 Kuwait (KSE) 6,560.6 1.6 2.4 2.4 Sh. Comp 3,428.9 1.1 3.7 3.7 Bahrain (BAX) 1,316.9 0.3 (1.1) (1.1) Hang Seng 31,412.5 1.9 5.0 5.0 Oman (MSM) 5,087.5 (0.3) (0.2) (0.2) Sensex 34,592.4 1.3 1.6 1.6 Jordan (ASEGI) 2,121.4 (0.2) (0.3) (0.3) Source: Bloomberg GLOBAL INDICES Weekly Performance (%) YTD Performance (%) 2.0 1.9 1.6 1.6 1.3 1.1 0.8 0.7 0.6 DJIA Hang Seng Nasdaq S&P 500 Sensex Sh. Comp CAC 40 FTSE 100 MSCI EM Jordan (ASEGI) Nikkei DAX 30 BIST 100 (1.7) Nasdaq Hang Seng DJIA MSCI EM S&P 500 Nikkei CAC 40 Sh. Comp DAX 30 Sensex FTSE 100 Jordan (ASEGI) BIST 100 (0.2) (0.3) (0.6) (2.0) 0.0 2.0 5.7 5.0 4.4 4.3 4.2 3.9 3.8 3.7 2.5 1.6 1.2 (0.3) (0.6) (2.0) 4.0 Source: Bloomberg 0.0 2.0 4.0 6.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) Qatar (DSM) Qatar (DSM) 5.9 S&P GCC S&P GCC 2.9 Kuwait (KSE) 7.2 5.5 UAE (ADX) 1.6 4.4 UAE (ADX) 0.9 Dow Jones Islamic 3.9 Dow Jones Islamic 0.9 UAE (DFM) 3.7 UAE (DFM) 0.9 Kuwait (KSE) KSA (TASI) 0.8 KSA (TASI) Bahrain (BAX) Oman (MSM) Oman (MSM) 0.3 (0.2) Bahrain (BAX) (0.3) (2.0) 2.4 1.5 0.0 2.0 4.0 6.0 (5.0) 8.0 Source: Bloomberg (1.1) 0.0 5.0 10.0 Global Equity markets across major global markets edged higher, led by gains in Financial shares. US markets continued to inch higher for the second consecutive week during this year, however, reports that China would start reducing the size of its US treasury purchases and a likely pullback of the US from the NAFTA treaty limited the gains. Some positive economic developments like retail sales numbers and weaker inflation data also supported gains. Financial shares rose as JP Morgan and Wells Fargo reported encouraging earnings data. The Stoxx Europe 600 index rose 0.3%, led by gains in Automobiles and Commodity shares. Further progress on government formation in Germany, reassured markets. In Asia, the Chinese benchmark rose 1.1%, on the back of encouraging domestic trade data. Rumors on Japan unwinding its stimulus plan weighed on its stock benchmark. GCC Most GCC markets edged mostly higher during the last week, tracking gains in oil prices. The Saudi Arabian benchmark rose 0.8%, as King Salman announced handout packages for Saudi citizens to make up for the higher cost of living. Petrochemical shares inched up as higher oil prices improved pricing prospects of domestic Petrochemical companies. In Dubai, Arabtec Holding soared 12.2%, after announcing that one of its subsidiaries won a construction contract from Emaar Properties worth USD 68mn. In Bahrain, Ithmaar Holding remained flattish after receiving the necessary approval to list its share in Dubai Financial Market. Qatar The QE index rallied 5.6%, amidst increased buying support from foreign institutional investors on account of attractive dividend yield of the domestic stocks. Trade turnover and volume increased during the week, with Banking, Industrial and Real Estate shares accounting for 82% of the total trading volume. Aamal rose 4.6%, after announcing expansion plans for one of the its JVs. Out of the total 45 listed stocks, 33 advanced, 11 declined and 1 remained unchanged. Source: Bloomberg DSM INDEX 10,500 9,135.9 9,500 8,500 7,500 Jul-17 Sep-17 Index Oct-17 50 SMA 100 SMA Nov-17 200 SMA Jan-18 Indicator Price Last Close 9,135.9 MAVG 50 8,164.5 MAVG 100 8,314.2 MAVG 200 9,027.6 6 Month High 9,594.5 6 Month Low 7,714.3 RSI (14 Days) 31.5 Source: Bloomberg 2
3. WEEKLY WRAP January 14 , 2018 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 3.50 5.00 2.99 3.00 2.50 2.35 2.00 4.46 3.52 3.22 3.00 2.40 2.20 1.50 1.00 4.00 2.85 2.00 4.45 3.84 2.55 2.48 2.41 1.90 2.00 1.20 3.20 3.10 3.00 2.23 1.00 0.50 0.00 0.00 2 Yrs 5 Yrs 7 Yrs Current 10 Yrs 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 Maturity Price (USD) Z Spread (BPS) Yield (%) WTD Δ (USD) YTD Δ (USD) Global QGS 2018 100.0 36.1 2.08 (0.0) (0.0) US 27.3 0.0 0.0 0.0 QGIB 2019 105.0 35.0 2.32 (0.1) (0.3) UK 18.0 (2.5) (2.3) (2.3) QGIB 2020 105.0 49.4 2.62 (0.1) (0.2) Qatari Diar 2020 98.1 66.4 2.93 (0.2) (0.3) 5 Years CDS Price (BPS) WTD Δ (BPS) MTD Δ (BPS) YTD Δ (BPS) Germany 10.4 (0.7) (1.0) (1.0) QGIB 2021 104.9 72.5 2.96 (0.0) (0.1) France 17.8 (0.6) (1.4) (1.4) QGIB 2022 105.0 81.2 3.13 (0.4) (0.6) Italy 110.7 (12.6) (10.0) (10.0) QGS 2023 99.4 96.9 3.33 0.1 0.4 Greece 355.15 (49.7) (72.4) (72.4) QGIB 2026 97.0 117.3 3.65 (0.6) (0.6) QGIB 2030 154.9 151.9 4.04 (0.9) (1.0) QGIB 2040 127.3 181.2 4.43 (1.6) (1.2) QGIB 2042 119.0 181.1 4.44 (1.5) (1.5) QGIB 2046 102.5 182.6 4.46 (1.8) (1.5) Russia 111.1 (7.4) (18.8) (18.8) Japan 24.0 (3.2) (3.2) (3.2) Turkey 161.3 (1.9) (5.7) (5.7) Brazil 147.3 (10.7) (16.5) (16.5) Egypt 309.0 (11.8) (20.1) (20.1) Abu Dhabi 54.0 (11.6) (10.6) (10.6) Bahrain 284.6 2.4 (2.8) (2.8) Dubai 117.3 (12.2) (11.9) Qatar 93.8 (11.5) Saudi Arabia 83.0 (12.9) Source: Bloomberg, QCB US Swap Rates GCC Tenor Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 1.720 0.016 0.026 6M LIBOR 1.880 0.015 0.043 (11.9) 12M LIBOR 2.164 0.015 0.057 (9.6) (9.6) 2 years 2.194 0.045 0.114 (11.1) (11.1) 5 years 2.395 0.062 0.151 10 years 2.539 0.069 0.139 30 years 2.655 0.044 0.111 International Credit Spreads iTraxx Europe 44.2 0.2 (1.0) (1.0) iTraxx Europe Crossover 228.8 5.4 (5.1) (5.1) CDX North America IG 46.8 0.8 (2.5) (2.5) CDX North America HY 297.5 5.8 (9.2) (9.2) iTraxxSovX CEEMEA NA NA NA NA iTraxx Europe Senior Financial 14.2 (2.7) (1.8) (1.8) iTraxx Europe Sub Financial 16.9 (4.2) (3.6) (3.6) Source: Bloomberg Commentary US treasury yields ended higher this week, partly aided by the news that China was considering slowing or even halting its purchases of Treasuries. The yields rose to 2.6% post the rumors, however pared some rise after the Chinese officials later denied any changes to their policy. A news report showing increased concerns among Canadian officials over US’ withdrawal from NAFTA also unnerved investors. Yields however fell to some extent later during the week, following robust US retail sales numbers. While inflation came in higher, the price rise was largely concentered in vehicle sales. Source: Bloomberg 3
4. WEEKLY WRAP January 14 , 2018 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 69.9 WTI Crude (USD/bbl) 64.3 Crude ended the week with a gain after breaching a key USD 70 threshold and rallying for five straight days. The recent momentum in prices comes amidst signs of strong demand. This week’s U.S. inventory report showed crude stockpiles falling for an eighth week and hitting the lowest levels since August-15. At the same time, US production dropped by the most since October-17. OPEC led efforts to limit supply has been helping oil prices. Data showing a rise in rig count had little impact on the oil prices. The freezing temperatures in most of the Eastern US in the week to January 5th led to the biggest ever weekly withdrawal from natural gas storage, thereby pushing the price of a commodity higher by 14.5%. Gold rose amidst a weak USD. Natural Gas (USD/mmBTU) 3.2 Gold (USD/t oz.) 1,334.9 Silver (USD/t oz.) 17.1 Copper (USD/lb) 321.9 Source: Bloomberg Weekly Performance (%) YTD Performance (%) Natural Gas Natural Gas 14.5 WTI Crude Brent Copper (0.8) (5.0) 2.0 Silver (0.3) Silver 4.5 Gold 1.0 Copper 6.4 Brent 3.3 Gold 8.4 WTI Crude 4.7 0.0 5.0 10.0 15.0 (0.0) (2.5) (4.0) 20.0 Source: Bloomberg (2.0) 0.0 2.0 4.0 6.0 8.0 10.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.3758 USD/INR 63.1400 EUR/USD 1.2232 USD/CNY 6.4690 CAD/USD 0.8025 USD/TRY 3.7489 AUD/USD 0.7917 USD/EGP 17.7106 NZD/USD 0.7242 USD/ZAR 12.3668 111.0600 USD/RUB 56.5975 USD/JPY Commentary JPY soared this week, after a routine operational reduction in bond purchases by the Bank of Japan triggered speculation that the central bank would unwind its massive stimulus. EUR also posted strong gains against the greenback, after minutes from European Central Bank boosted investor expectations that the central bank is close to end its stimulus program. Progress on government formation in Germany also aided the EUR. The USD has also broadly been impacted by rumors on Chinese Treasury sell-off and weak Producer inflation numbers. CAD closed lower, over increase concerns about the US withdrawal from NAFTA. Source: Bloomberg Weekly Performance (%) JPY EUR GBP NZD AUD CNY RUB EGP CAD INR ZAR TRY (1.0) Source: Bloomberg YTD Performance (%) 1.8 1.4 1.2 1.0 0.7 0.6 0.3 (0.4) (0.4) (0.4) (0.5) (0.5) 0.0 0.5 1.0 1.5 2.0 NZD RUB EUR GBP JPY TRY AUD CNY CAD INR ZAR EGP 2.0 1.7 1.6 1.6 1.5 1.5 1.4 0.9 0.9 0.5 0.5 0.4 0.0 0.5 1.0 1.5 2.0 2.5 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