GCC Daily Market Update - 23 October

Transcription

1. WEEKLY WRAP October 23 , 2016 ECONOMIC UPDATE & NEWS 0.20% Russia Industrial Production YoY Sep 0.40% (0.80%) 0.70% UK CPI MoM Sep 0.10% 0.20% 0.30% UK CPI YoY Sep 0.90% 1.00% 0.60% US CPI MoM Sep 0.30% 0.30% 0.20% UK Jobless Claims Change Sep 3.2k 0.7k 7.1k US MBA Mortgage Applications Oct-14th -- 0.60% (6.00%) Canada BoC Rate Decision Oct-19th 0.50% 0.50% 0.50% Eurozone ECB Main Refinancing Rate Oct-20th 0.00% 0.00% 0.00% US Initial Jobless Claims Oct-15th 250k 260k 247k Russia Gold and Forex Reserve Oct-14th -- 391.4b 395.4b Source: Bloomberg GLOBAL NEWS  The Fed vice Chair said that low economic growth has hindered the central bank from effectively fighting recession and the economy may face longer recessions if current rates persist. (Source: Reuters)  US consumer prices rose 0.3% MoM in Sep-16 driven by rise in gasoline prices and housing rents. (Source: Reuters)  UK annual consumer price inflation rose to 1.0% in Sep-16 from 0.6% in Aug-16, as the collapse in the GBP since the UK referendum vote began to push up the cost of imports. (Source: The Guardian)  The European Central Bank has left its monetary policy unchanged, quashing any talk of tapering its asset-buying program. (Source: Reuters)  China's GDP rose 6.7% YoY in Q3-16, as government spending rose and a boom in property market offset weak exports. (Source: Reuters)  China’s crude output fell 9.8% YoY to 16.0mn bpd in Sep-16, due to spending cuts at oil fields and the closure of old wells. (Source: 1.80 1.75 1.70 1.65 1.60 1.55 1.50 1.45 1.40 Source: Bloomberg respectively. (Source: Reuters)       Bloomberg)    India’s exports grew by 4.6% YoY to USD 22.90bn in Sep-16, while imports contracted by 2.5% YoY. (Source: Live Mint) OPEC’s secretary-general said that he was optimistic that the group will reach a deal in Nov-16 to limit oil production without disagreement about output levels. (Source: Reuters) Iran oil minister said that the country is planning to boost its oil output to 4.3mn bpd in 2016 and is seeking USD 200bn of investment for the same. (Source: Bloomberg)      Economic activity in the GCC region is projected to slow in 2016 as fiscal tightening and declining liquidity impacts the region, according to IMF regional report. (Source: Trade Arabia) S&P said that GCC sovereign’s 4-year funding needs, ending in 2019, has been estimated at USD 560bn. It further adds that the member countries will mostly rely on debt issuance to cater to funding needs, with Qatar expected to the most active one. (Source: The Peninsula) The overall growth in the UAE would fall to 2.3% in 2016, down from 4.0% last year, as the effect of lower oil prices impacts the wider economy, according to IMF. (Source: The National) Moody's maintained stable outlook for UAE banking system, citing resilient capital and liquidity buffers. (Source: Trade Arabia) Saudi Arabia's imports tumbled 32.7% YoY to SAR 33.5bn while nonoil exports dropped 27.2% YoY to SAR 11.8bn in July-16. (Source: Zawya)  Annual CPI inflation rose 2.6% YoY in Sep-16, mainly due to costlier recreation, transport and housing and utilities. (Source: Gulf Times)  The Qatari royal family has halted its future equity investment to Deutsche Bank, as the bank is under investigation for alleged misselling of mortgage-backed securities. (Source: Arabian Business)  More than 70% of Qatar’s SMEs have posted cumulative investments worth USD 852.3mn in 2015, the Secretary General the Gulf Organization for Industrial Consulting said. (Source: Gulf Times)  Qatar has delayed the start-up of the first phase of its Barzan Gas project which was due to start in Nov-16, because of a leak discovered in the upstream gas pipeline. (Source: Reuters)  Qatar's central bank is offering QAR 3bn of government bonds, made up of QAR 1.5bn, QAR 250mn and QAR 250mn of 3-years, 7-years and 10-years bonds respectively. (Source: QCB)  The Commercial Bank reported net profit of QAR 499mn in 9M-16 compared to QAR 1,301mn in 9M-15. (Source: QSE)  Fitch said that Qatari banks are better placed than GCC peers to cope with an eventual deterioration in asset quality due to a prolonged period of weak oil prices. (Source: The Peninsula)  Qatar is considering investing in the USD 100bn global technology fund formed by SoftBank Group Corp. and Saudi Arabia, according to people familiar with the matter. (Source: Bloomberg)  Qatargas signed a new 5-year LNG Sale and Purchase Agreement (SPA) with Petronas LNG UK Limited to deliver LNG until 31st Dec-23. Saudi Arabia’s crude oil exports in Aug-16 fell to 7.31mn barrels per day from 7.62mn bpd in Jul-16. (Source: Arab News)  Saudi Arabia’s debut 3-tranche debut Euro-bond is priced at 160 bps, 185 bps and 235 bps over US treasury for 5, 10 and 30-year tranches, Moody’s said that rising challenges in the Saudi Arabia’s construction sector will lead to rising nonperforming loans and higher provisioning costs for the country's banks. (Source: Moody’s) Oman’s M1 money supply fell 1.3% YoY and 3.9% MoM in Aug-16, while M2 money supply rose by 9.5% YoY and 1.2% MoM. (Source: CBO) Oman’s conventional bank assets declined 1.8% YoY and 6.5% MoM to OMR 27.4bn in Aug-16, while total credit rose 8.2% YoY and 0.5% MoM to OMR 19.5 bn in Aug-16. (Source: CBO) Aluminium Bahrain has secured a syndicated 7-years term loan facility worth USD 1.5bn for the Line 6 Project, which will boost its annual metal production capacity by 540,000 tons. (Source: Trade Arabia) Kuwait’s trade surplus expanded to KWD 1.2bn in Q2-16 from KWD 0.4bn in Q1-16, attributed to rise in oil exports on the back of a recovery in oil prices. (Source: Kuwait Times) The chairman of the committee for financial and economic affairs said that Bahrain’s government will not cut public spending as international oil prices have started to stabilize. (Source: Arabian Business) QATAR NEWS GCC NEWS  1.67 17-Oct 0.40% 10-Oct 0.40% 03-Oct Sep F 26-Sep Eurozone CPI YoY UST 10yr Bond 19-Sep Prior 12-Sep 1.50% 05-Sep 1.30% 29-Aug Actual -- 22-Aug Survey 15-Aug Period 08-Aug Industrial Production MoM Aug F 01-Aug Event Japan 25-Jul Region (Source: The Peninsula) 1
2. WEEKLY WRAP October 23 , 2016 EQUITY Index Price Index Price WTD %Δ 2,141.2 0.4 (1.3) 4.8 MSCI EM 911.2 1.6 0.9 14.7 18,145.7 0.0 (0.9) 4.1 S&P GCC 1,490.7 (0.1) (2.0) 3.0 Nasdaq 4,851.9 0.9 (0.5) 5.6 Dow Jones Islamic 2,920.7 0.1 (2.0) 4.3 FTSE 100 7,020.5 0.1 1.8 12.5 KSA (TASI) 5,651.8 (0.7) 0.5 (18.2) DAX 30 10,710.7 1.2 1.9 (0.3) UAE (DFM) 3,340.5 0.2 (3.9) 6.0 CAC 40 4,536.1 1.5 2.0 (2.2) UAE (ADX) 4,294.5 (1.2) (4.1) (0.3) BIST 100 78,843.7 1.7 3.1 9.9 Qatar (DSM) 10,438.5 0.5 0.0 0.1 Nikkei S&P 500 DJIA WTD %Δ MTD %Δ YTD %Δ COMMENTARY MTD %Δ YTD %Δ 17,184.6 1.9 4.5 (9.7) Kuwait (KSE) 5,321.5 (0.1) (1.4) (5.2) Sh. Comp 3,090.9 0.9 2.9 (12.7) Bahrain (BAX) 1,151.8 0.6 0.2 (5.3) Hang Seng 23,374.4 0.6 0.3 6.7 Oman (MSM) 5,562.3 (1.7) (2.9) 2.9 Sensex 28,077.2 1.5 0.8 7.5 Jordan (ASEGI) 2,117.3 0.1 (0.2) (0.9) Source: Bloomberg GLOBAL INDICES Weekly Performance (%) YTD Performance (%) 1.9 Nikkei BIST 100 MSCI EM Sensex CAC 40 DAX 30 Nasdaq Sh. Comp Hang Seng S&P 500 FTSE 100 Jordan (ASEGI) DJIA MSCI EM FTSE 100 BIST 100 Sensex Hang Seng Nasdaq S&P 500 DJIA DAX 30 Jordan (ASEGI) CAC 40 Nikkei (9.7) Sh. Comp (12.7) 1.7 1.6 1.5 1.5 1.2 0.9 0.9 0.6 0.4 0.1 0.1 0.0 0.0 0.5 1.0 1.5 2.0 (20.0) 2.5 Source: Bloomberg 14.7 12.5 9.9 7.5 6.7 5.6 4.8 4.1 GCC Gulf indices closed on a mixed note over the week. Saudi Arabia’s index slipped amidst a slew of disappointing earnings results. However, the index pared some losses towards the end of the week buoyed by a rally in the Banking stocks following the kingdom's mammoth international bond sale, which is expected to ease liquidity squeeze in the economy. Abu Dhabi’s Index fell 1.2% dragged down by blue-chip stocks, while Dubai’s Index was broadly flat over the week. (0.3) (0.9) (2.2) (10.0) 0.0 10.0 20.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) Bahrain (BAX) UAE (DFM) 0.6 Qatar (DSM) 0.5 UAE (DFM) 0.1 S&P GCC 3.0 2.9 Kuwait (KSE) (0.1) Qatar (DSM) S&P GCC (0.1) UAE (ADX) KSA (TASI) (1.2) 0.1 (0.3) Kuwait (KSE) (5.2) Bahrain (BAX) (5.3) (0.7) UAE (ADX) 4.3 Oman (MSM) 0.2 Dow Jones Islamic 6.0 Dow Jones Islamic KSA (TASI) (18.2) Oman (MSM) (1.7) (2.0) (1.5) (1.0) (0.5) 0.0 0.5 (20.0) (15.0) (10.0) (5.0) 1.0 Source: Bloomberg 0.0 5.0 Global Most global markets were higher over the last week supported by encouraging economic data from China, stable crude oil prices, and broadly positive Q3 corporate earnings globally, particularly in the US and Europe. The US markets gained with the tech-heavy Nasdaq outperforming the other US indices, helped by solid gains in the shares of Netflix and Microsoft following their earnings reports. European stocks rose supported by better-thanexpected earnings updates from some Eurozone companies, including SAP, the region’s largest software firm. The PanEuropean benchmark Stoxx 600 gained 1.3% helped by rebound in the Banking stocks. UK’s benchmark edged up 0.1% supported by data showing higher-thanexpected inflation numbers. In Asia, Japanese stocks rallied on the back of strong corporate earnings and a weaker yen. Nikkei, however, pared some gains after an earthquake rocked Western Japan on Friday. Shanghai Composite gained 0.9% as China’s economy grew 6.7% YoY in Q3-16, easing concerns about the slowdown. 10.0 Qatar QE index rose 0.5% over the week with strong buying activity witnessed in Banks and Financial Services (1.5%) and Real Estate (0.8%) sectors. In terms of volume, Banking, Telecom, Realty and Industrials stocks together constituted about 85% of the total trade. Foreign institutions were the net buyers on the bourse while domestic Institutions and individual investors turned net sellers. Out of 44 stocks traded, 30 fell and 14 gained. Source: Bloomberg DSM INDEX Indicator Price Last Close 10,438.5 MAVG 50 10,718.7 10,000 MAVG 100 10,389.0 9,000 MAVG 200 10,142.3 8,000 Apr-16 6 Month High 11,408.8 6 Month Low 9,532.6 RSI (14 Days) 46.6 12,000 10,438.5 11,000 Jun-16 Index Jul-16 50 SMA 100 SMA Sep-16 200 SMA Oct-16 Source: Bloomberg 2
3. WEEKLY WRAP October 23 , 2016 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 3.50 5.00 2.90 3.00 2.50 0.50 3.00 2.49 0.83 2.00 1.74 1.53 1.24 0.00 0.00 2 Yrs 5 Yrs 7 Yrs 10 Yrs Current 5 Yrs Last Year 7 Yrs 10 Yrs 30 Yrs Last Year Source: Bloomberg CDS Qatar Govt. Int. Bonds Price (BPS) WTD Δ (BPS) MTD Δ (BPS) YTD Δ (BPS) Global US 1.27 0.85 Current Source: Bloomberg 5 Years CDS 1.91 2 Yrs 30 Yrs 2.48 1.24 1.00 0.64 2.36 2.17 1.42 1.50 4.18 3.01 2.09 1.80 2.00 1.00 3.98 4.00 26.4 (0.1) 1.0 7.2 Maturity Price (USD) Z Spread (BPS) Yield (%) WTD Δ (USD) YTD Δ (USD) QGIB 2017 100.5 (4.0) 0.41 0.0 (1.4) QGS 2018 100.6 62.3 1.49 0.0 (0.8) QGIB 2019 111.8 52.7 1.52 (0.0) (3.2) QGIB 2020 110.2 83.8 1.89 (0.1) (0.7) Qatari Diar 2020 100.6 100.3 2.19 0.3 NA UK 38.3 0.1 4.0 19.5 Germany 17.3 (1.4) (0.5) 4.4 France 29.4 0.7 0.8 3.0 QGIB 2021 110.6 87.7 1.97 0.1 0.1 Italy 137.2 (2.4) (0.3) 40.0 QGIB 2022 110.5 108.6 2.30 (0.0) 0.7 Greece 1,031.8 7.2 (8.0) (50.3) QGS 2023 105.7 90.5 2.21 0.0 2.0 Russia 227.3 (11.8) 12.3 (81.7) QGIB 2026 102.1 145.3 2.96 0.9 NA QGIB 2030 165.1 201.2 3.62 1.4 7.0 QGIB 2040 136.1 219.0 3.97 0.8 9.5 QGIB 2042 127.9 215.2 3.96 0.6 10.5 QGIB 2046 107.8 230.3 4.15 2.3 NA Japan 33.7 (1.3) (0.8) (14.9) Turkey 247.3 (9.9) (8.6) (26.3) Brazil 260.8 (9.3) (11.3) (234.1) Egypt 481.7 (0.1) 1.5 2.9 GCC Source: Bloomberg, QCB US Swap Rates Abu Dhabi 66.5 0.5 (0.8) (26.1) Tenor Bahrain 380.7 (5.9) (3.4) 15.1 3M LIBOR Dubai 152.5 6.5 5.0 (81.2) 6M LIBOR Qatar 87.5 (1.5) (3.2) (5.1) Saudi Arabia 135.0 (9.0) (18.3) (20.8) International Credit Spreads Weekly Δ (BPS) YTD Δ (BPS) 0.882 0.000 0.269 1.256 (0.006) 0.410 12M LIBOR 1.566 (0.019) 0.388 2 years 1.060 (0.004) (0.119) 5 years 1.265 (0.033) (0.480) 10 years 1.575 (0.053) (0.613) 30 years 1.924 (0.071) (0.698) iTraxx Europe 71.1 (3.3) (2.1) 71.1 iTraxx Europe Crossover 319.8 (14.5) (14.7) 319.8 Source: Bloomberg CDX North America IG 73.7 (2.1) (2.3) 73.7 Commentary CDX North America HY 398.3 (5.7) (1.6) 398.3 iTraxxSovX CEEMEA NA NA NA NA iTraxx Europe Senior Financial 67.8 (7.2) (13.5) 67.8 iTraxx Europe Sub Financial 114.3 (15.3) (31.8) 114.3 Price (%) US benchmark treasury yields fell for the week following statements by ECB President who signaled a continuity to ECB’s massive bond buying program, which was due to end early next year. Yield were impacted after Fed Vice Chairman said that it is "not that simple" for the Fed to coax interest rates higher. Increased prospects of interest rate hike on back of hawkish statements by Fed officials however capped the fall. The US treasury yield curve however flattened as investors sold long duration treasuries, following a higher than anticipated inflation data. Source: Bloomberg 3
4. WEEKLY WRAP October 23 , 2016 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 51.8 WTI Crude (USD/bbl) 50.9 WTI closed higher for the week supported by statement of Russian Energy Minister, wherein he said that he hopes to reach an agreement on price supportive measures that could include an oil production freeze in the upcoming OPEC meet. The gains were further powered amid a projected drop in US shale output and a huge drawdown in US crude stockpiles, which is the sixth decline in seven weeks. WTI however gave back gains, while Brent closed the week in red after Baker Hughes data showed an addition of 11 new rigs this week, which is the most since February16. Natural gas fell as warm weather and heavy stockpiles continued to weigh on the market. Natural Gas (USD/mmBTU) 3.0 Gold (USD/t oz.) 1,265.9 Silver (USD/t oz.) 17.5 Copper (USD/lb) 208.9 Source: Bloomberg Weekly Performance (%) YTD Performance (%) Gold WTI Crude Silver Brent Copper Natural Gas (8.9) (10.0) Brent WTI Crude Silver Natural Gas Gold Copper 1.0 1.0 0.3 (0.3) (1.0) (8.0) (6.0) (4.0) (2.0) 0.0 2.0 38.9 37.3 27.0 26.7 19.4 (2.2) (10.0) Source: Bloomberg 0.0 10.0 20.0 30.0 40.0 50.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.2264 USD/INR 66.3900 EUR/USD 1.0914 USD/CNY 6.7670 CAD/USD 0.7498 USD/TRY 3.0810 AUD/USD 0.7608 USD/EGP 8.8814 NZD/USD 0.7161 USD/ZAR 13.9849 103.8000 USD/RUB 62.3730 USD/JPY Commentary USD gained against most major currencies supported by hawkish stance by some Fed officials and increased prospects of Hillary Clinton’s presidency, post the final debate. CAD was under pressure throughout the weak due to Bank of Canada’s dovish tilt, weak domestic data and fall in oil prices. EUR closed lower after ECB’s Chairman dismissed prospects of QE tapering. NZD recorded a strong rally against USD as strong economic data offset the RBNZ rate cut decision. ZAR was the biggest gainer as S. African Finance Minister had been given the backing of the Cabinet, improving the sentiment towards the currency. Source: Bloomberg Weekly Performance (%) ZAR NZD RUB GBP JPY TRY EGP AUD INR CNY EUR CAD YTD Performance (%) RUB JPY ZAR NZD AUD CAD EUR INR CNY TRY EGP GBP (17.0) 2.4 1.0 0.9 0.4 0.3 0.3 (0.1) (0.1) (0.3) (0.4) (0.8) (1.5) (2.0) Source: Bloomberg (1.0) 0.0 1.0 2.0 3.0 (20.0) 17.0 15.8 10.6 4.8 4.4 3.7 0.2 (1.1) (3.9) (5.3) (11.9) (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