GCC Daily Market Update - 23 July

Transcription

1. WEEKLY WRAP July 23 , 2017 ECONOMIC UPDATE & NEWS - (0.40%) (0.70%) Jun 0.20% 0.00% 0.30% UK CPI YoY Jun 2.90% 2.60% 2.90% Germany ZEW Survey Curr. Situation Jul 88.0 86.4 88.0 Germany ZEW Survey Expectations Jul 18.0 17.5 18.6 Jul-14th - 6.30% (7.40%) Eurozone ECB Main Refinancing Rate Jul-20th 0.00% 0.00% 0.00% US Initial Jobless Claims Jul-15th 245k 233k 248k Russia Gold and Forex Reserve Jul-14th - 412.6b 410.9b Canada CPI YoY Jun 1.10% 1.00% 1.30% US MBA Mortgage Applications Source: Bloomberg GLOBAL NEWS  US import prices dropped by 0.2% MoM in June-17 as fuel prices declined sharply. Export prices also declined by 0.2% during the month. (Source: Morningstar)  UK’s consumer prices advanced 2.6% YoY in June-17 after rising 2.9% YoY in May-17. Core inflation slowed to 2.4% YoY after rising 2.6% YoY in the previous month. (Source: Morningstar) w  Eurozone consumer prices rose 1.3% YoY in June-17 decelerating form 1.4% in May-17 and 1.9% in April-17 mostly because of the slowdown of energy prices, which grew by 1.9% YoY from 4.5% and 7.6% in the comparable periods. (Source: Reuters)  Eurozone trade surplus rose by 5.9% MoM to EUR 19.7bn in May-16 driven by rise in exports by 2.1% MoM. Imports posted a 1.6% growth over the month. (Source: Market Insider)   The Japanese government expects Japan’s economy to recover in the short term, supported by the effects of the policies and led by improving employment and income situation. (Source: Morningstar) t Japan’s industrial production declined by 3.6% MoM in May-17 but it grew by 6.5% YoY. The monthly decline in shipments was revised to 2.9% from 2.8%. (Source: LSE)  China’s GDP grew by 6.9% YoY in Q2-17 driven by stronger exports and robust steel production. (Source: Reuters)  China’s sovereign rating was maintained at A+ with stable outlook by Fitch driven by strong external finances and macroeconomic track record. (Source: Morning Star)  Turkey’s budget deficit stood at TRY 13.7bn in June-17 as compared to the surplus of TRY 6.4bn (USD 1.8bn) in May-17. Budget deficit for first six months stood at TRY 25.2bn (USD 6.9bn) in June-17, the nation’s Finance Minister said. (Source: AA) Source: Bloomberg  GCC sovereigns and government related entities lead the debt issuance from Middle East, which increased by more than 50.0% YoY to USD 57.4bn in H1-1 7, according to Thomson Reuters. (Source: Zawya)  Saudi Arabia’s General Authority for Zakat and Tax (GAZT) has introduced a public consultation of the Draft Implementing Regulations for Value Added Tax (VAT), which is open for feedback until 19th August-17. (Source: Trade Arabia)  Saudi Arabia’s Ministry of Housing has launched 27,658 housing products across the Kingdom within its housing program, “sakani”, according to SPA report. (Source: Zawya)  The Saudi government has planned to set up wastewater treatment projects worth SAR 2.2bn (USD 586.6mn) in the cities of Jeddah and Dammam, said the CEO of the National Water Company (NCW). (Source: Trade Arabia) QATAR NEWS  Qatar’s non-oil exports reached to QAR 8.6bn in H1-17 majorly driven by exports in March-17, which stood at QAR 1.8bn, according to the Qatar Chamber’s. (Source: Gulf Times)  Iranian companies are seeking to invest in the Qatari market and intend to establish partnerships with Qatari companies to boost economic and trade ties between the two countries, Iran’s Deputy Minister of Industry, Mine and Trade said. (Source: Gulf Times)  Qatar Chamber (QC) said that it has introduced an initiative which is aimed at identifying losses sustained by Qatari companies from the economic blockade for settling claims due to the same. (Source: Gulf Times)  Real estate transaction worth QAR 2.7bn were reported during the period from 9th July-17 to 13th July-17. (Source: Gulf Times)  According to the Institute of International Finance, Qatar’s banking system has the lowest non-performing loans in GCC at 1.3% of total income. Return on assets stood at 1.7%. (Source: Gulf Times)  New firms registered under the Qatar Financial Centre Regulatory rose 41.0% YoY during H1-17. (Source: Gulf Times)  The Qatar Fund for Development (QFD) said that it has started the third phase of His Highness Sheikh Hamad bin Khalifa City having 700 apartments at a total cost of USD 43.0mn. s(Source: Gulf Times) T Arabia)  GCC is leading the green field projects and refinery expansion drive in the Middle East with 1.5mn barrels per day (b/d) of new refining capacity expected online by 2021, a research by Apicorp Energy showed. (Source: Trade Arabia) Nakilat signed a MoU with Höegh LNG to explore Floating Storage and Regasification Unit (FSRU) business as part of its diversification strategy. (Source: Qatar Tribune)  Manateq and five Qatari property developers signed QAR 488.5mn worth deal for the construction of hotels and hotel apartment complexes inside the Ras Bufontas Special Economic Zone, said Manateq CEO. (Source: Gulf Times) GCC NEWS  Internet of Things (IoT) solutions market in the GCC region is poised for solid growth and is likely to be worth USD 11.0bn by 2025, according to AT Kearney. (Source: Trade Arabia)  Non-oil sectors will account for more than 80.0% of GDP in the UAE and Saudi Arabia by 2025 due to the initiatives taken by GCC governments, according to the report of Frost & Sullivan. (Source: Trade  2.13 17-Jul Jun CPI MoM 10-Jul CPI YoY UK 03-Jul KSA 2.35 2.30 2.25 2.20 2.15 2.10 2.05 2.00 26-Jun 5.60% Jun 19-Jun 3.50% Industrial Production YoY 12-Jun 3.50% Russia UST 10yr Bond 05-Jun 1.40% 29-May Prior 1.30% 22-May Actual 1.30% 15-May Survey Jun F 08-May Period 01-May Event Eurozone CPI YoY 24-Apr Region 1
2. WEEKLY WRAP July 23 , 2017 EQUITY Index Price S&P 500 WTD %Δ MTD %Δ YTD %Δ COMMENTARY Index Price WTD %Δ MTD %Δ YTD %Δ 2,472.5 0.5 2.0 10.4 MSCI EM 1,060.2 1.3 4.9 23.0 21,580.1 (0.3) 1.1 9.2 S&P GCC 1,659.3 0.8 5.3 5.6 Nasdaq 5,921.5 1.4 4.9 21.8 Dow Jones Islamic 3,350.9 0.7 2.5 15.3 FTSE 100 7,452.9 1.0 1.9 4.3 KSA (TASI) 7,261.1 (0.7) (2.2) 0.7 DAX 30 12,240.1 (3.1) (0.7) 6.6 UAE (DFM) 3,573.5 1.0 5.4 1.2 CAC 40 5,117.7 (2.2) (0.1) 5.3 UAE (ADX) 4,552.5 0.8 2.9 0.1 106,842.8 1.6 6.4 36.7 Qatar (DSM) 9,542.3 0.8 5.7 (8.6) 18.0 DJIA BIST 100 Nikkei 20,099.8 (0.1) 0.3 5.2 Kuwait (KSE) 6,781.0 (0.1) 0.3 Sh. Comp 3,238.0 0.5 1.4 4.3 Bahrain (BAX) 1,320.4 0.2 0.8 8.2 Hang Seng 26,706.1 1.2 3.7 21.4 Oman (MSM) 4,999.4 (2.4) (2.3) (13.5) Sensex 32,028.9 0.0 3.6 20.3 Jordan (ASEGI) 2,166.2 (0.1) (0.1) (0.2) Source: Bloomberg GLOBAL INDICES Weekly Performance (%) YTD Performance (%) 1.6 1.4 1.3 1.2 1.0 BIST 100 Nasdaq MSCI EM Hang Seng FTSE 100 S&P 500 Sh. Comp Sensex Nikkei Jordan (ASEGI) DJIA CAC 40 DAX 30 BIST 100 MSCI EM Nasdaq Hang Seng Sensex S&P 500 DJIA DAX 30 CAC 40 Nikkei FTSE 100 Sh. Comp Jordan (ASEGI) 0.5 0.5 0.0 (0.1) (0.1) (0.3) (2.2) (3.1) (4.0) (3.0) (2.0) (1.0) 0.0 1.0 36.7 23.0 21.8 21.4 20.3 (0.2) Source: Bloomberg 0.0 10.0 20.0 30.0 40.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) UAE (DFM) Kuwait (KSE) 1.0 S&P GCC 18.0 0.8 Dow Jones Islamic Qatar (DSM) 0.8 Bahrain (BAX) UAE (ADX) 0.8 S&P GCC 0.7 UAE (DFM) 1.2 KSA (TASI) 0.7 Dow Jones Islamic Bahrain (BAX) 0.2 Kuwait (KSE) Oman (MSM) 8.2 5.6 0.1 Qatar (DSM) (0.7) (8.6) Oman (MSM) (13.5) (2.4) (3.0) 15.3 UAE (ADX) (0.1) KSA (TASI) (2.0) (1.0) 0.0 1.0 (20.0) 2.0 Source: Bloomberg (10.0) 0.0 10.0 Global markets traded mostly higher during the last week, following the dovish stance adopted by European Central Bank and Bank of Japan. US indices benefitted from encouraging quarterly results from the US companies. Financial and Transportation stocks were among the notable gainers during the week. However, reports of the Senators almost cancelling the healthcare bill, raised concerns of the future course of the reforms in the US economy thereby limiting the broader gains. European markets traded mostly lower, as strength in the EUR weighed on the exporters listed on the regional indices. However, UK stocks inched higher, on the back of upbeat UK earnings data and weakness in the GBP. Among the Asian markets, Chinese equities inched higher, as better than expected domestic GDP data spurred optimism about the growth prospects of the economy. GCC GCC markets traded mostly higher during the last week, with the Saudi benchmark bucking the broader positive trend due to downbeat Q2-17 earnings data. The index trimmed its losses on Thursday, after index heavy-weight SABIC rose following a broker upgrade. Dubai market climbed 5.4%, led by gains in Telecommunication and Investment & Financial stocks. Upbeat earnings report from Emirates NBD and Dubai Islamic Bank also contributed to the gains in the index. Omani markets underperformed its peer indices, led by increased bearish bets in Services and Insurance & Banking sectors. 10.4 9.2 6.6 5.3 5.2 4.3 4.3 (10.0) 2.0 Global 20.0 Qatar Qatari markets continued its upward trajectory, led by Banking shares. Banking sector climbed after recent batch of quarterly earnings of the domestic banks indicated that the ongoing political blockade imposed on Qatar has not significantly impacted the lenders. Trading value and volume declined during the week, with Banking, Industrial and Telecom sector together accounting for almost 71% of total value. Out of the 44 listed stocks on the market, 26 advanced, 17 declined, while 1 remained unchanged. Source: Bloomberg DSM INDEX 11,200 10,700 9,542.3 10,200 9,700 9,200 8,700 Jan-17 Mar-17 Index Apr-17 50 SMA 100 SMA Jun-17 200 SMA Jul-17 Indicator Price Last Close 9,542.3 MAVG 50 9,506.7 MAVG 100 9,950.9 MAVG 200 10,162.1 6 Month High 11,057.8 6 Month Low 8,777.7 RSI (14 Days) 59.2 Source: Bloomberg 2
3. WEEKLY WRAP July 23 , 2017 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 2.81 3.00 2.50 1.50 2.24 2.05 3.34 3.10 2.85 2.28 4.07 3.00 1.34 2.07 2.90 2.00 1.57 1.39 1.00 1.12 0.50 4.32 4.00 1.80 2.00 5.00 1.00 0.70 2.08 2.27 5 Yrs 7 Yrs 1.21 0.00 0.00 2 Yrs 5 Yrs 7 Yrs Current 10 Yrs 2 Yrs 30 Yrs Current Last Year Source: Bloomberg 10 Yrs Source: Bloomberg CDS Qatar Govt. Int. Bonds Maturity Price (USD) Z Spread (BPS) Yield (%) Global QGS 2018 100.0 71.8 US 24.4 (2.1) (1.9) (5.6) QGIB 2019 107.5 51.9 UK 19.7 (1.6) (2.4) (13.3) QGIB 2020 106.8 Qatari Diar 2020 99.0 5 Years CDS 30 Yrs Last Year Price (BPS) WTD Δ (BPS) MTD Δ (BPS) YTD Δ (BPS) WTD Δ (USD) YTD Δ (USD) 2.10 NA (0.5) 1.93 0.2 (2.6) 77.0 2.31 0.5 (1.3) 86.4 2.58 0.9 0.9 Germany 15.2 (1.3) (2.2) (8.8) QGIB 2021 106.1 115.1 2.76 0.7 (1.4) France 19.8 (2.6) (4.1) (19.5) QGIB 2022 106.9 101.8 2.79 0.7 (0.3) Italy 137.5 (8.7) (10.8) (24.8) QGS 2023 101.6 101.4 2.88 1.2 (0.7) Greece 596.2 (8.5) (48.1) (530.1) QGIB 2026 99.3 120.3 3.31 1.0 2.5 QGIB 2030 160.3 154.3 3.76 2.2 5.4 QGIB 2040 131.0 183.0 4.22 2.6 5.7 QGIB 2042 122.0 185.1 4.26 2.5 5.2 QGIB 2046 105.1 185.5 4.30 2.1 4.7 Russia 162.7 (9.6) (7.9) (71.3) Japan 27.0 (0.6) 0.5 (5.0) Turkey 183.4 (7.0) (13.0) (92.0) Brazil 213.2 (11.2) (31.4) (70.1) Egypt 407.4 (0.0) 0.0 (51.8) Abu Dhabi 60.0 (1.6) (3.3) (4.4) Bahrain 242.4 1.6 (18.2) (70.0) Dubai 129.3 1.6 (7.8) (25.6) Qatar 95.6 (9.3) (22.2) 2.9 Saudi Arabia 100.9 (5.0) (19.0) 12.6 Source: Bloomberg, QCB US Swap Rates GCC Tenor International Credit Spreads iTraxx Europe 51.7 (2.9) (4.7) (21.1) iTraxx Europe Crossover 235.2 (9.9) (12.8) (56.1) CDX North America IG 56.9 (1.7) (4.4) (10.9) CDX North America HY 322.9 (1.7) (15.8) (31.2) iTraxxSovX CEEMEA NA NA NA NA iTraxx Europe Senior Financial 22.4 (3.6) (5.0) (47.6) iTraxx Europe Sub Financial 31.4 (10.0) (12.0) (93.3) Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 1.313 0.009 0.315 6M LIBOR 1.456 0.000 0.138 12M LIBOR 1.738 (0.002) 0.052 2 years 1.591 (0.004) 0.134 5 years 1.884 (0.046) (0.093) 10 years 2.208 (0.073) (0.131) 30 years 2.504 (0.077) (0.091) Source: Bloomberg Commentary US Treasury yields fell this week, despite encouraging economic data on housing and employment. The yields were majorly impacted after Senate leader Mitch McConnell disallowed the passage of healthcare bill which raised doubts over Trump administration’s ability to pass other reform policies. European and German government bond yields also fell as ECB kept the monetary stimulus program unchanged and gave no clear deadline on unwinding its massive bond buying plan. UK bond yields fell as inflation fell for the first time in June since October 2016. Source: Bloomberg 3
4. WEEKLY WRAP July 23 , 2017 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 48.1 WTI Crude (USD/bbl) 45.8 Brent started the week on a strong note after EIA reported a more-than-expected decline in US crude oil supplies, however the oil benchmark retreated later during the week after a tanker tracking firm, Petro Logistics showed that OPEC oil production has increased, despite pledges to cut the same. Natural gas prices ended slightly lower for the week as EIA reported a rise in US natural gas inventories by 28 bcf. Copper prices ended higher this week, supported by reports on China’s economy expanding faster-than-expected in Q2-2017 at 6.9% YoY. Gold prices rose for the week, driven by weakness in USD. The resignation of White House press secretary further sparked demand for the safe haven. Natural Gas (USD/mmBTU) 3.0 Gold (USD/t oz.) 1,254.9 Silver (USD/t oz.) 16.4 Copper (USD/lb) 271.5 Source: Bloomberg Weekly Performance (%) YTD Performance (%) Silver Gold 3.3 Gold Copper WTI Crude (1.7) Brent Brent (1.7) Natural Gas (1.0) 2.6 WTI Crude (0.3) (2.0) 8.4 Silver 1.2 Natural Gas 9.0 Copper 2.2 0.0 1.0 2.0 3.0 (14.8) (15.4) (20.2) (25.0) 4.0 Source: Bloomberg (20.0) (15.0) (10.0) (5.0) 0.0 5.0 10.0 15.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.3027 USD/INR 63.8188 EUR/USD 1.1693 USD/CNY 6.7667 CAD/USD 0.7976 USD/TRY 3.5361 AUD/USD 0.7916 USD/EGP 17.8695 NZD/USD 0.7454 USD/ZAR 12.9175 111.1300 USD/RUB 59.3575 USD/JPY Commentary Political issues such as the extension of investigation into allegation of Russian interference in US elections and resignation of White House press secretary weighed on USD this week. Pessimism over the proposed healthcare bill, further pressured the currency. While a dovish stance by BoJ impacted Yen, the EUR registered gains despite a dovish ECB. CAD benefitted from better-than-expected Canadian manufacturing shipment and retail sales data. GBP ended in red, weighed by lowerthan-expected rise in UK CPI for June. The currency however got some support from strong UK retail sales for June. Source: Bloomberg Weekly Performance (%) YTD Performance (%) EUR NZD JPY AUD CAD ZAR EGP CNY TRY INR (0.3) RUB (0.5) GBP (0.8) (1.0) Source: Bloomberg (0.5) EUR AUD NZD CAD ZAR INR GBP JPY RUB CNY EGP TRY 1.7 1.5 1.3 1.1 0.9 0.8 0.7 0.2 0.1 0.0 0.5 1.0 1.5 2.0 10.9 9.8 7.5 7.2 6.4 5.4 5.3 5.3 3.8 3.0 1.4 (0.4) (2.0) 0.0 2.0 4.0 6.0 8.0 10.0 12.0 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