GCC Daily Market Update - 25 Sep

Transcription

1. WEEKLY WRAP September 25 , 2016 ECONOMIC UPDATE & NEWS Period Survey Actual Aug 1190k 1142k 1212k MBA Mortgage Applications Sep-16th -- (7.30%) 4.20% 1.80 US FOMC Rate Decision Sep-21st 0.50% 0.50% 0.50% 1.70 US Initial Jobless Claims Sep-17th 261k 252k 260k Russia Gold and Forex Reserve Sep-16th -- 396.6b 399.6b 1.60 Japan Nikkei Japan PMI Mfg 1.50 France GDP QoQ France Markit Manf. PMI Germany Markit/BME Manf PMI Sep P 53.1 54.3 53.6 EC Markit Manufacturing PMI Sep P 51.5 52.6 51.7 Canada CPI YoY Aug 1.40% 1.10% 1.30% US Markit Manufacturing PMI Sep P 52 51.4 52 Source: Bloomberg 1.40 1.30 Source: Bloomberg the value of Etisalat’s stocks, which got a boost after foreign investors were permitted to invest in company. (Source: Mubasher) GLOBAL NEWS  OECD trimmed its global growth forecasts by 0.1% for 2016 and 2017. The expected growth during 2016 and 2017 is 2.9% and 3.2%, respectively. (Source: Bloomberg)  A possible deal to support oil prices by the world's leading producer countries to stabilize the market by freezing output may last for one year, the Secretary General of OPEC said. (Source: Reuters)  The Federal Open Market Committee kept the benchmark US rates unchanged however indicated a rate hike in Dec-16 (Source: Fed)  Investments in the Eurozone surged to EUR 52.8bn in Jul-16 from EUR 11.6 bn in Jun-16. The growth was majorly due to net portfolio investments. (Source: Reuters)  German economic growth could slow in Q3-16, primarily due to weak manufacturing export demand, according to the Central Bank of Germany. (Source: Reuters)  The Bank of Japan’s new monetary stimulus program involves adjusting the volume of its asset purchases in the short term to control bond yields, while keeping it at about JPY 80tn annually over the long term. (Source: Bloomberg)     Abu Dhabi’s CPI rose by 2.4% in the first eight months of 2016 led by housing, power, water and fuel budget group. (Source: Gulf News)  Oman’s CPI rose 1.34% YoY for Aug-16, driven mainly by a 7.25% rise in prices of transportation. (Source: Times Of Oman)  Kuwait’s real GDP declined 25.9% YoY to KWD 34mn in 2015, meanwhile, CPI was 3.3% during 2015, compared with 2.9% during 2014. (Source: KUNA)  Moody's outlook for Kuwait's banking system remains stable, reflecting the rating agency's expectation of continued government spending and growing loss-absorbing buffers. (Source: Moody’s)  Kuwait’s trade surplus with Japan shrank 52.8% YoY to JPY 25.2bn in Aug-16, mainly due to a plunge in exports. (Source: KUNA) QATAR NEWS  China’s economy has shown a steady upward trend and has huge room for maneuver, said Premier Li Keqiang. He however dismissed prospects of depreciation of the CNY. (Source: Bloomberg) Qatar Central Bank is offering QAR 3bn of government bonds in its second domestic bond sale in 2016. The offer is made up of QAR 1.5bn of three-year bonds at a fixed rate of 2.25%, QAR 1bn of fiveyear debt at 2.75%, QAR 250mn of seven-year debt at 3.25% and QAR 250mn of 10-year debt at 3.75%. (Source: Zawya)  Excessive credit growth in China is signaling an increasing risk of a banking crisis in the next three years, according to a report by the Bank for International Settlements. (Source: Reuters) Homes in Qatar, connected to the Internet are reported at 96% of the total population, according to a report of the United Nations Broadband Commission. (Source: Zawya)  Passenger Traffic at Hamad International Airport (HIA) rose 20% YoY to 17.6mn passengers in H1-16. HIA also showed continued expansion in airport operation and cargo tonnage, which grew 17% YoY and 20.3% YoY respectively, during the period. (Source: The Peninsula)  Banks in GCC countries will remain under pressure for the remainder of 2016 and 2017 due to low commodity prices and geopolitical risks, according to S&P. (Source: Arabian Business) With an exception to Al Ahli Brokerage, Qatar’s stock brokerage houses have by and large witnessed a sharp decline in trade turnover during the first eight months of 2016, according to a report by Qatar Stock Exchange. (Source: Gulf Times)  UAE posted a budget surplus of AED 34.7bn in Q1-16 compared to AED 12.1bn in Q1-15. Government revenues rose by 14% YoY to AED 85.7bn, while government spending declined by 41% YoY to AED 51bn for the same period. (Source: Mubasher) Projects worth USD 200bn are underway in Qatar as the country is working on improving its infrastructure, the Minister of Economy and Commerce said. (Source: Gulf Times)  Consumption of natural gas in Qatar has witnessed a steep rise of 40% over the last five years from 32.1bn m3 (bcm) in 2010 to 45.2bcm in 2015, according to BP Statistical Review of World Energy 2016 report. Increasing population and rapid expansion of infrastructure are the main drivers behind surge in consumption. Moody’s said that India's (Baa3 positive) banking system is moving past the worst of its asset quality down cycle, supporting its stable outlook for the sector over the next 12-18 months. (Moody’s) GCC NEWS     19-Sep 48.3 12-Sep 49.5 05-Sep 48.5 29-Aug Sep P 22-Aug 0.00% 15-Aug 49.5 (0.10%) 08-Aug 50.3 0.00% 01-Aug -- 2Q F 1.57 25-Jul Sep P UST 10yr Bond 18-Jul US Prior 11-Jul Housing Starts 04-Jul Event US 27-Jun Region A rescue plan for SME financing in the UAE has so far led to the restructuring or loans worth AED 7bn, according to the UAE banks federation. (Source: Arabian Business) The market capitalization of the Abu Dhabi Exchange rose in the first eight months of 2016 to AED 441bn, mainly due to the increase in (Source: The Peninsula)  Qatar’s banks will continue to face challenges in H1-16, but is expected to turn more positive in 2017, according to KPMG. (Source: The Peninsula) 1
2. WEEKLY WRAP September 25 , 2016 EQUITY Index Price Index Price WTD %Δ 2,164.7 1.2 (0.3) 5.9 MSCI EM 917.5 3.6 2.7 15.5 18,261.5 0.8 (0.8) 4.8 S&P GCC 1,525.0 0.4 (0.4) 5.4 Nasdaq 4,858.9 0.8 1.8 5.8 Dow Jones Islamic 2,981.1 1.7 0.9 6.5 FTSE 100 6,909.4 3.0 1.9 10.7 KSA (TASI) 5,948.9 (3.7) (2.1) (13.9) DAX 30 10,627.0 3.4 0.3 (1.1) UAE (DFM) 3,513.6 0.9 0.3 11.5 CAC 40 4,488.7 3.6 1.1 (3.2) UAE (ADX) 4,515.2 0.4 1.0 4.8 BIST 100 79,756.4 4.9 5.0 11.2 Qatar (DSM) 10,412.5 (1.2) (5.3) (0.2) Nikkei S&P 500 DJIA WTD %Δ MTD %Δ YTD %Δ COMMENTARY MTD %Δ YTD %Δ 16,754.0 1.4 (0.8) (12.0) Kuwait (KSE) 5,405.8 (0.4) (0.3) (3.7) Sh. Comp 3,033.9 1.0 (1.7) (14.3) Bahrain (BAX) 1,134.5 0.8 (0.7) (6.7) Hang Seng 23,686.5 1.5 3.1 8.1 Oman (MSM) 5,766.1 (0.2) 0.5 6.7 Sensex 28,668.2 0.2 0.8 9.8 Jordan (ASEGI) 2,139.7 1.1 3.0 0.2 Source: Bloomberg GLOBAL INDICES Weekly Performance (%) YTD Performance (%) 4.9 BIST 100 MSCI EM CAC 40 DAX 30 FTSE 100 Hang Seng Nikkei S&P 500 Jordan (ASEGI) Sh. Comp Nasdaq DJIA Sensex 3.0 1.5 1.4 1.2 1.1 1.0 0.8 0.8 0.2 0.0 2.0 4.0 15.5 MSCI EM BIST 100 FTSE 100 Sensex Hang Seng S&P 500 Nasdaq DJIA Jordan (ASEGI) DAX 30 CAC 40 Nikkei (12.0) Sh. Comp (14.3) 3.6 3.6 3.4 (20.0) 6.0 Source: Bloomberg 11.2 10.7 9.8 8.1 5.9 5.8 4.8 0.2 (1.1) (3.2) (10.0) 0.0 10.0 20.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) Dow Jones Islamic 1.7 UAE (DFM) Bahrain (BAX) S&P GCC UAE (DFM) 0.9 Oman (MSM) 0.8 Dow Jones Islamic UAE (ADX) (0.2) Kuwait (KSE) (3.7) Bahrain (BAX) (1.2) (6.7) KSA (TASI) (13.9) KSA (TASI) (3.7) (4.0) 4.8 Qatar (DSM) (0.4) Qatar (DSM) 5.4 UAE (ADX) 0.4 (0.2) Kuwait (KSE) 6.5 S&P GCC 0.4 Oman (MSM) 11.5 6.7 (2.0) 0.0 (20.0)(15.0)(10.0) (5.0) 0.0 2.0 Source: Bloomberg 5.0 10.0 15.0 Global Most major global stocks posted solid gains buoyed by the US Fed and BOJ’s latest moves to support economic growth and also by strength in the prices of oil and other commodities. US markets surged as the Fed kept the policy rates unchanged. Tech-heavy Nasdaq Composite reached a new record helped by share buybacks at Microsoft and Target. European stocks rallied amid the announcement by BOJ and Fed indicating continued monetary stimulus however it pared some gains on Friday as data on manufacturing and services activity in the euro zone came below expectations. In Asia, Japan’s Nikkei rose 1.4% lifted by gains in the Banking stocks as BOJ surprised market by announcing that it would introduce a bond-purchase program to control 10-year bond rates which would ensure higher returns to the banks. GCC Gulf stock markets were mixed over the week ahead of a gathering of OPEC ministers next week in Algeria to discuss possible production cooperation to rein in global oversupply. TASI plunged 3.7% ahead of austerity measures next month. Saudi government is expected to hike fees on services including driving licenses, traffic violations, port fees and several other municipal services on 02 October 2016. Dubai and Abu Dhabi’s Index gained 0.9% and 0.4% respectively over the week as they stand to benefit from the US Fed’s decision to leave interest rates unchanged. Qatar QE index closed 1.2% lower during the week amid profit booking, after FTSE Russell included 22 local stocks in its global secondary emerging market index. Most of the sectors closed in red with major losers being Real estate (-3.1%), Industrials (2.8%) and Transportation (-1.9%) sector. Banking, Real estate and Telecom stocks together constituted about 70% of the total traded volume. Domestic Institutions and local retail investors turned net sellers on the bourse. Of the 44 stocks listed, as many as 31 declined, while only 11 advanced and two were unchanged. Source: Bloomberg DSM INDEX 12,000 11,000 10,412.5 10,000 9,000 Mar-16 May-16 Index Jun-16 50 SMA 100 SMA Aug-16 200 SMA Sep-16 Indicator Price Last Close 10,412.5 MAVG 50 10,747.3 MAVG 100 10,293.4 MAVG 200 10,115.8 6 Month High 11,408.8 6 Month Low 9,532.6 RSI (14 Days) 52.6 Source: Bloomberg 2
3. WEEKLY WRAP September 25 , 2016 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 3.50 5.00 2.96 3.00 4.00 2.16 2.50 2.97 1.86 2.00 3.00 2.35 1.48 0.76 0.50 2.00 1.62 1.44 1.16 0.00 0.00 2 Yrs 5 Yrs 7 Yrs 10 Yrs Current 2.15 1.44 0.89 2 Yrs 30 Yrs 2.62 1.27 1.00 0.69 5 Yrs 7 Yrs Current Last Year Source: Bloomberg 3.85 2.23 2.07 1.50 1.00 4.30 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 13.0 0.60 (0.0) (1.1) US 25.3 0.0 (1.3) 6.1 QGS 2018 100.6 68.9 1.66 NA NA UK 32.4 (0.1) (0.8) 13.3 QGIB 2019 112.4 48.6 1.43 0.1 (2.6) QGIB 2020 110.7 81.9 1.81 0.2 (0.2) Qatari Diar 2020 100.8 102.6 2.15 0.4 NA 5 Years CDS Price (BPS) WTD Δ (BPS) MTD Δ (BPS) YTD Δ (BPS) Germany 17.9 1.2 1.3 5.0 France 27.5 (0.3) (2.1) 1.2 QGIB 2021 111.0 88.3 1.91 0.2 0.5 Italy 137.0 (0.1) 0.5 39.8 QGIB 2022 111.3 102.9 2.17 0.3 1.6 1,018.3 (107.3) 11.6 (63.8) QGS 2023 106.7 84.9 2.06 0.4 3.0 QGIB 2026 102.2 155.8 2.96 1.2 NA QGIB 2030 164.5 218.4 3.67 0.5 6.5 QGIB 2040 138.8 216.8 3.83 3.4 12.3 QGIB 2042 130.6 213.5 3.82 3.2 13.1 QGIB 2046 110.2 229.4 4.02 2.9 NA Greece Russia 211.3 5.3 (18.4) (97.6) Japan 35.5 4.0 2.0 (13.1) Turkey 247.9 1.6 4.4 (25.7) Brazil 273.2 (0.6) 17.8 (221.7) Egypt 477.7 (3.1) 44.3 (1.0) GCC Source: Bloomberg, QCB US Swap Rates Abu Dhabi 68.1 3.6 (6.6) (24.5) Tenor Bahrain 383.4 (0.8) (9.0) 17.8 Dubai 152.0 9.5 (6.2) Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 0.857 (0.000) 0.244 (81.7) 6M LIBOR 1.248 0.001 0.402 12M LIBOR 1.561 0.016 0.383 2 years 1.015 0.000 (0.164) 5 years 1.187 (0.033) (0.558) 10 years 1.463 (0.061) (0.725) 30 years 1.801 (0.085) (0.821) Qatar 88.1 2.6 (0.6) (4.5) Saudi Arabia 149.1 8.6 (2.6) (6.7) International Credit Spreads iTraxx Europe 70.8 (0.7) 2.6 70.8 iTraxx Europe Crossover 324.6 (11.9) 14.0 324.6 Source: Bloomberg CDX North America IG 76.8 0.6 4.0 76.8 Commentary CDX North America HY 387.1 (22.5) (3.5) 387.1 iTraxxSovX CEEMEA NA NA NA NA iTraxx Europe Senior Financial 69.6 (5.6) (1.5) 69.6 iTraxx Europe Sub Financial 118.9 (4.4) (2.7) 118.9 US treasury yields fell during the week as after Federal Reserve officials left interest rates unchanged, supporting buying appetite. Yields were further impacted by weakness in oil prices and US manufacturing activity, which grew at its slowest pace in 3 months in September. Yields however gained some ground later during the week after Boston Fed President Eric Rosengren said he had wanted to raise interest rates this week to help prolong the economic expansion, explaining why he was one of three dissenters from the Fed policy-committee decision to hold rates steady. Source: Bloomberg 3
4. WEEKLY WRAP September 25 , 2016 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 45.9 WTI Crude (USD/bbl) 44.5 Oil eked marginal gains during the week, with Brent up 0.3%. The commodity started on a strong footing after Saudi Arabia offered to reduce oil production if rival Iran caps its own output this year. The gains were further powered by a surprise drop in US crude stockpiles for a third straight week. Crude prices however tumbled on Friday paring most of its gains after a Saudi Arabian delegate reportedly said oil producers aren’t likely to make a decision on production levels at a meeting next week. Prices also saw pressure after the Federal Reserve proposed restrictions on commodity trading among US banks. Gold and Silver rallied as Fed dampened expectation of an interest rate hike in near future. Natural Gas (USD/mmBTU) 3.0 Gold (USD/t oz.) 1,337.5 Silver (USD/t oz.) 19.8 Copper (USD/lb) 219.3 Source: Bloomberg Weekly Performance (%) Silver WTI Crude Gold Copper Brent Natural Gas YTD Performance (%) Silver Natural Gas Gold Brent WTI Crude Copper 5.1 3.4 2.4 1.9 0.3 0.2 0.0 1.0 2.0 3.0 4.0 5.0 6.0 43.2 27.3 26.2 23.1 20.1 2.7 0.0 Source: Bloomberg 10.0 20.0 30.0 40.0 50.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.2996 USD/INR 66.1550 EUR/USD 1.1256 USD/CNY 6.6694 CAD/USD 0.7594 USD/TRY 2.9689 AUD/USD 0.7623 USD/EGP 8.8790 NZD/USD 0.7242 USD/ZAR 13.7176 101.0200 USD/RUB 64.0796 USD/JPY Commentary The USD closed lower this week after Fed kept interest rates unchanged at the FOMC meet and remained dovish over interest rate hikes in near future. The US Dollar index, which gauges the US dollar against its main competitors, ended 0.62% lower for the week. ZAR rallied the most as concern eased that Finance Minister Pravin Gordhan will be removed from his post, while gains in oil prices boosted RUB and CAD. The RUB further benefitted after Bank of America recommended buying the Russian currency, citing a positive outlook for crude prices. JPY gained after Japan’s central bank refrained from further rate cuts. Source: Bloomberg Weekly Performance (%) ZAR RUB AUD JPY EUR INR TRY CAD CNY EGP GBP NZD YTD Performance (%) JPY RUB ZAR NZD CAD AUD EUR INR TRY CNY EGP (11.9) GBP (12.0) 3.4 2.1 1.8 1.2 0.6 0.6 0.4 0.3 0.1 (0.1) (0.3) (0.3) (1.0) (0.5) Source: Bloomberg 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 (15.0) 19.0 13.9 12.9 6.0 5.1 4.6 3.4 (0.7) (1.7) (2.6) (10.0) (5.0) 0.0 5.0 10.0 15.0 20.0 25.0 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 inf ormation provided in this materials or for any delays, inaccuracies, errors in, or omissions of the said information. 4