GCC Daily Market Update - 18 September

Transcription

1. WEEKLY WRAP September 18 , 2016 ECONOMIC UPDATE & NEWS Prior UST 10yr Bond ¥974.4b 2Q F 0.00% 0.20% 0.00% 1.80 Eurozone ECB Main Refinancing Rate Sep-08th 0.00% 0.00% 0.00% 1.70 US Initial Jobless Claims Sep-03rd 265k 259k 263k 1.60 Russia Gold and Forex Reserve Sep-02nd -- 394.3b 396.9b France Industrial Production MoM Jul 0.30% (0.60%) (0.70%) Sep 2.5 0.5 0.5 1.30 0.20% 1.20 0.25% 0.25% UK Bank of England Bank Rate Sep-15th 0.25% US Initial Jobless Claims Sep-10th 265k 260k 259k Russia Gold and Forex Reserve Sep-09th -- 399.6b 394.3b Source: Bloomberg GLOBAL NEWS            (Source: Bloomberg)  Calendar)  Source: Bloomberg Global oil industry may cut spending for a third straight year in 2017 as companies struggle with weaker finances due to crude’s slump, according to a report by the International Energy Agency. (Source: WSJ) US producer prices were flat on monthly basis in Aug-16 as strength in underlying producer inflation was offset by decline in cost of energy products and trade services. (Source: Reuters) US budget deficit rose by 66% YoY to USD 107bn in Aug-16, driven largely by spending on entitlements such as Medicare, Medicaid and Social Security programs. (Source: WSJ) US retail sales fell 0.3% MoM in Aug-16 after a 0.1% MoM rise in July16. The fall in retail sales can be attributed to slower wage growth. Lael Brainard, member of the US Federal Reserve's Board of Governors said that continued prudence in tightening monetary policy should be avoided however the Federal Reserve should not remove support for the US economy too quickly. (Source: Bloomberg) UK CPI rose 0.3% MoM in Aug-16, due to higher food prices, air fares and transportation cost. (Source: FT) Bank of England has maintained bank rate at 0.25% and has decided to continue with its bond buying program. (Source: Bank of England) Eurozone CPI rose 0.1% MoM to 0.2% in Aug-16, due to upward pressure from restaurants, fruits and vegetables. (Source: Economic Eurozone’s trade surplus shrank to EUR 20.0bn in Jul-16 from EUR 23.8bn in Jun-16 as exports fell 1.1% while imports rose by 1.4% over the month. (Source: Econo Times) China’s Industrial output rose 6.3% YoY in Aug-16, due to strong housing market and government infrastructure spending. (Source:      Chinese banks extended CNY 948.7bn in net new CNY loans in Aug16. Mortgage loans were the major driver of loan growth, based on booming housing market. (Source: Reuters) Indian consumer inflation eased to 5.05% in Aug-16, due to slower rise in food prices. (Source: Reuters) India's trade deficit fell by more than 40% YoY to USD 34.7bn in the first five months of FY-17 supported by a double digit slide of 14.1% in imports. (Source: Reuters)   UAE’s exports of goods and services would rise by 5% to over AED 1.3tn at the end of 2016 compared to AED 1.25tn in 2015, according to the Ministry of Economy. (Source: Gulf News) Dubai is planning to establish itself as the number one tourist destination for visitors from Asia following a decision to grant Chinese tourists visas on arrival, according to Crown Prince of Dubai. (Source: Arabian Business) The Saudi economy is expected to create 5.7mn jobs by 2020, with 55% of the available jobs for expats, according to a study assessing the ability of Saudi economy to generate suitable and sustainable jobs. (Source: Arabian Business) Despite the lower oil price environment Kuwait’s economic outlook remains strong backed by high public spending and stable fiscal buffers, according to a report by Abu Dhabi Commercial Bank. (Source: Gulf News) QATAR NEWS  Qatar’s exports trade surplus (in goods) in Jul-16 fell 18.8% MoM and 52.5% YoY to QAR 6.7bn. (Source: The Peninsula)  Qatar is expected to continue its growth at around 3.7% in 2016 and 2017, as impact of lower oil prices on Qatar’s economy is likely to be ameliorated, supported by increased reliance on non-hydrocarbons, which now constitute more than 65% of the economy, according to Qatar Investment Fund. (Source: Gulf Times)  Moody's said that Loan Coverage Ratio of Islamic banks in Qatar are comparable to those of their conventional peers due to absence of sizable retail deposit franchises among the Qatari banks, coupled with heightened systemic liquidity pressures that had led to banks relying more on market funding. (Source: Gulf Times)  Qatar’s corporate full year earnings are expected to be flat in 2016 as 11% YoY decline in H1-16 will be offset by gains in H2-16. Higher performance in anticipated on back of infrastructure developments and relatively better credit growth expectations, according to a report by Markaz. (Source: Gulf Times)  Qatar issued USD 9bn in the capital markets so far in 2016 to fill fiscal gap due to decline in oil price, according to a report by S&P. (Source: GCC NEWS  Dubai hotels revenue fell by 10% YoY in Aug-16 despite a rise in occupancy, according to hotel consultancy STR. (Source: Arabian Business) Fitch Ratings said that the budget deficit of Saudi Arabia is likely to be 11.2% and 6.8% of GDP in 2016 and 2017 respectively. It is expected to fall to 2.4%in 2018. (Source: Press TV) Saudi Arabia produces 18% of the world's desalinated water, according to the Saline Water Conversion Corporation. (Source: Zawya) Construction projects worth USD 100bn to expand capacity at Makkah's Grand Mosque and other Islamic holy sites will be completed in three years, Makkah's mayor said. (Source: Trade Arabia) Saudi Arabia is in the process to join MSCI Inc.’s Emerging-markets Index in 2018 as Tadawul is relaxing barriers to overseas investors. (Source: Gulf Times) Reuters)  12-Sep 0.00% 0.20% 05-Sep (0.40%) 29-Aug -0.20% 22-Aug Jul F Aug F 15-Aug Industrial Production MoM Eurozone CPI YoY 1.40 08-Aug Japan 1.50 20-Jun Germany ZEW Survey Expectations 1.64 01-Aug Actual 25-Jul GDP SA QoQ Survey Jul ¥2073.3b ¥1938.2b 18-Jul Japan Period 11-Jul BoP Current Ac Balance 04-Jul Event Japan 27-Jun Region Gulf Times)  Qatar Investment Fund reported net loss of USD 37.95mn for the year to the end of June-16, generated from fair value adjustments, realized gains and dividend income. (Source: Interactive Investor) 1
2. WEEKLY WRAP September 18 , 2016 EQUITY Index Price S&P 500 DJIA WTD %Δ MTD %Δ YTD %Δ COMMENTARY Index Price WTD %Δ 2,139.2 0.5 (1.5) 4.7 MSCI EM 885.5 (2.6) MTD %Δ YTD %Δ (0.9) 11.5 18,123.8 0.2 (1.5) 4.0 S&P GCC 1,519.0 (0.2) (0.8) 5.0 2,930.9 0.1 (0.8) 4.7 NA NA 1.6 (10.6) Nasdaq 4,818.1 2.9 1.0 4.9 Dow Jones Islamic FTSE 100 6,710.3 (1.0) (1.1) 7.5 KSA (TASI) DAX 30 10,276.2 (2.8) (3.0) (4.3) UAE (DFM) 3,482.3 (1.1) (0.6) 10.5 CAC 40 4,332.5 (3.5) (2.4) (6.6) UAE (ADX) 4,499.3 (0.4) 0.6 4.5 BIST 100 76,020.3 (1.3) 0.1 6.0 Qatar (DSM) NA NA (4.1) 1.0 Nikkei 16,519.3 (2.6) (2.2) (13.2) Kuwait (KSE) NA NA 0.2 (3.3) Sh. Comp 3,002.8 (2.5) (2.7) (15.2) Bahrain (BAX) 1,125.1 0.4 (1.5) (7.5) Hang Seng 23,335.6 (3.2) 1.6 6.5 Oman (MSM) NA NA 0.7 6.9 Sensex 28,599.0 (0.7) 0.5 9.5 Jordan (ASEGI) NA NA 1.9 (1.0) Source: Bloomberg. (Qatar, Oman, Kuwait, Jordan and TASI were closed on the account of Eid Al-Adha for the week, hence kept NA) GLOBAL INDICES Weekly Performance (%) YTD Performance (%) 2.9 Nasdaq S&P 500 DJIA Jordan (ASEGI) Sensex (0.7) FTSE 100 (1.0) BIST 100 (1.3) Sh. Comp (2.5) MSCI EM (2.6) Nikkei (2.6) DAX 30 (2.8) Hang Seng (3.2) CAC 40 (3.5) (4.0) (2.0) 0.0 2.0 11.5 9.5 7.5 6.5 6.0 4.9 4.7 4.0 MSCI EM Sensex FTSE 100 Hang Seng BIST 100 Nasdaq S&P 500 DJIA Jordan (ASEGI) DAX 30 CAC 40 Nikkei (13.2) Sh. Comp (15.2) 0.5 0.2 0.0 (1.0) (4.3) (6.6) (20.0) (15.0) (10.0) (5.0) 0.0 4.0 Source: Bloomberg 5.0 10.0 15.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) Bahrain (BAX) UAE (DFM) 0.4 Dow Jones Islamic 10.5 Oman (MSM) 0.1 Qatar (DSM) NA S&P GCC 5.0 NA Dow Jones Islamic 4.7 Kuwait (KSE) NA UAE (ADX) KSA (TASI) NA Qatar (DSM) S&P GCC UAE (DFM) Bahrain (BAX) (3.3) (7.5) KSA (TASI) (10.6) (1.1) (1.5) 4.5 1.0 Kuwait (KSE) (0.2) (0.4) GCC Most GCC markets including Qatar, Oman, Kuwait and Saudi Arabia were closed for the week on the account of Eid-Al-Adha. Both Emirati indices, DFM and ADX, edged down, while Bahrain’s benchmark gained marginally by 0.4% during the last week. 6.9 Oman (MSM) UAE (ADX) Global Most of the global markets weakened this week as investors waited for clarity on central bank monetary policy globally, particularly next week’s interest rate decision by the US Federal Reserve. US Indices rose as soft US economic data released during the week diminished expectations of interest rate increase by the US Fed in its upcoming meet. US retail sales fell 0.3% MoM, while US industrial output declined 0.4% MoM in August, highlighting tepid demand for manufactured goods and slow growth across the broader economy. Tech heavy Nasdaq Composite outperformed the other US indices largely as a result of about 11% surge in the shares of Apple. European stocks fell amid central banks uncertainty on monetary policy and weakness in banking stocks. DAX 30 fell 2.8% dragged by Deutsche Bank as US Justice Department is seeking up to USD 14 bn from the bank to resolve allegations stemming from the sale of mortgage securities in the 2008 crisis. In Asia, Shanghai Composite fell 2.5% for the week as robust industrial output and retail sales data showed signs of improvement in China’s economy reduced the possibility of any further monetary easing measures from the Central Bank in the near-term. Japan’s Nikkei edged down 2.6% as yen strengthened during the week. (1.0) (0.5) 0.0 0.5 (15.0) (10.0) (5.0) 1.0 Source: Bloomberg. (Gulf markets closed for Eid Al-Adha week) 0.0 5.0 10.0 15.0 Source: Bloomberg DSM INDEX Indicator Price Last Close NA 11,000 MAVG 50 NA 10,000 MAVG 100 NA 9,000 MAVG 200 NA 12,000 8,000 Mar-16 10,534.1 May-16 Index Jun-16 50 SMA 100 SMA Jul-16 200 SMA 6 Month High 11,408.8 6 Month Low 9,532.6 RSI (14 Days) NA Source: Bloomberg 2
3. WEEKLY WRAP September 18 , 2016 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 3.50 5.00 2.94 3.00 1.84 2.00 1.45 0.76 3.00 2.45 1.50 0.50 3.03 2.13 2.50 1.00 4.27 4.00 2.00 1.69 1.50 1.20 0.68 0.00 0.00 2 Yrs 5 Yrs 7 Yrs 10 Yrs Current 2.15 1.44 0.85 2 Yrs 30 Yrs 2.60 1.37 1.00 5 Yrs 7 Yrs Current Last Year Source: Bloomberg 4.01 2.29 2.13 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 QGIB 2017 100.7 23.1 0.71 NA (1.1) US 25.3 (0.5) (6.7) 6.1 QGS 2018 100.6 68.9 1.67 NA (1.2) UK 32.5 (0.2) (1.0) 13.4 QGIB 2019 112.3 56.3 1.51 NA (2.7) QGIB 2020 110.5 88.2 1.89 NA (0.4) Qatari Diar 2020 100.5 107.9 2.23 NA NA 5 Years CDS Price (BPS) WTD Δ (BPS) MTD Δ (BPS) YTD Δ (BPS) Germany 16.7 0.6 0.0 3.8 France 27.8 (0.5) (1.4) 1.4 QGIB 2021 111.2 81.4 1.94 NA (1.3) Italy 137.1 1.7 6.1 39.8 QGIB 2022 111.0 105.8 2.23 NA 1.3 1,125.5 58.1 143.8 43.5 QGS 2023 106.4 86.0 2.11 NA 2.7 QGIB 2026 101.3 159.7 3.06 NA NA QGIB 2030 163.8 216.9 3.72 NA 5.9 QGIB 2040 135.3 228.0 4.02 NA 8.7 QGIB 2042 127.5 222.2 3.98 NA 10.0 QGIB 2046 107.2 237.8 4.18 NA NA Greece Russia 206.0 (1.0) (16.1) (103.0) Japan 31.5 (0.4) (1.5) (17.1) Turkey 246.3 (0.1) 7.1 (27.3) Brazil 273.8 20.1 20.2 (221.2) Egypt 480.8 3.3 31.4 2.0 GCC Source: Bloomberg, QCB US Swap Rates Abu Dhabi 64.5 (7.5) (11.0) (28.1) Tenor Bahrain 384.2 11.4 (7.2) 18.6 Dubai 142.5 (14.3) (17.5) Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 0.857 0.004 0.244 (91.2) 6M LIBOR 1.252 0.002 0.406 12M LIBOR 1.550 (0.007) 0.372 2 years 1.015 (0.036) (0.164) 5 years 1.220 (0.019) (0.525) 10 years 1.524 (0.000) (0.664) 30 years 1.886 0.031 (0.736) Qatar 85.5 NA (12.0) (7.1) Saudi Arabia 140.5 NA (19.4) (15.3) International Credit Spreads iTraxx Europe 71.2 3.3 3.0 71.2 iTraxx Europe Crossover 335.3 19.5 24.6 335.3 Source: Bloomberg CDX North America IG 75.9 (0.3) 3.1 75.9 Commentary CDX North America HY 410.7 5.5 20.2 410.7 iTraxxSovX CEEMEA NA NA NA NA iTraxx Europe Senior Financial 73.6 5.0 2.5 73.6 iTraxx Europe Sub Financial 119.2 4.3 (2.3) 119.2 US benchmark yields closed higher for the week after tepid releases including retail sales and industrial production dampened expectations of an interest rate hike before December. Higher than expected inflation data helped offset the rise in yields to some extent. Corporate bonds from energy-related issuers held up fairly well despite the move lower in oil prices. European government bond yields closed higher for the week after ECB surprised markets by not raising interest rates or committing to an extension of its bond-buying program. Source: Bloomberg 3
4. WEEKLY WRAP September 18 , 2016 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 45.8 WTI Crude (USD/bbl) 43.0 Most major commodities closed lower for the week on back of a rally in USD. The drop in oil prices was further aggravated after data showing growth in Iranian exports reinforced fears of a global glut. A rise in US stockpiles of crude and products, and Libya's pledge to sharply boost production and exports within weeks further weighed on the commodity. Baker Hughes data showing an addition of 2 rigs this week was another negative development for oil. Natural gas prices rallied after weather reports suggested more heat and high demand for gas-fired power, while copper prices benefitted from data showing higher than expected Industrial production in China. Natural Gas (USD/mmBTU) 2.9 Gold (USD/t oz.) 1,306.2 Silver (USD/t oz.) 18.8 Copper (USD/lb) 215.2 Source: Bloomberg Weekly Performance (%) Natural Gas Copper Gold Silver Brent WTI Crude YTD Performance (%) Silver Natural Gas Gold Brent WTI Crude Copper 5.4 3.0 (1.8) (2.6) (4.7) (6.2) (8.0) (6.0) (4.0) (2.0) 0.0 2.0 4.0 6.0 36.2 26.1 23.2 22.8 16.2 0.8 0.0 Source: Bloomberg 10.0 20.0 30.0 40.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.3032 USD/INR 66.4850 EUR/USD 1.1185 USD/CNY 6.6747 CAD/USD 0.7569 USD/TRY 2.9804 AUD/USD 0.7491 USD/EGP 8.8799 NZD/USD 0.7266 USD/ZAR 14.1820 102.2900 USD/RUB 65.2850 USD/JPY Commentary The USD started on a weak note following uncertainty over interest rate hike post release of tepid retail sales and industrial production data. The currency however closed the week higher after a more than anticipated increase in US consumer prices boosted the prospects of an interest rate hike. GBP remained under pressure after the Bank of England indicated further monetary easing in near future. CAD closed lower weighed by weak oil prices and lower than expected manufacturing sales data. Other oil linked currencies like AUD and NZD also closed lower. CNY closed higher supported by improvement in industrial production and retail sales. Source: Bloomberg Weekly Performance (%) ZAR JPY CNY EGP INR TRY AUD EUR NZD RUB CAD GBP (3.0) Source: Bloomberg YTD Performance (%) 1.7 0.4 0.3 (0.2) (0.2) (0.4) (0.7) (0.7) (0.8) (1.0) (1.2) (2.0) (2.0) (1.0) 0.0 1.0 2.0 JPY RUB ZAR NZD CAD AUD EUR INR TRY CNY GBP EGP 17.6 11.5 9.1 6.4 4.7 2.8 2.7 (1.3) (2.1) (2.6) (11.8) (11.8) (15.0) (10.0) (5.0) 0.0 5.0 10.0 15.0 20.0 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