GCC Daily Market Update - 28 May

Transcription

1. WEEKLY WRAP May 28 , 2017 ECONOMIC UPDATE & NEWS Period Survey Actual Prior May 113.1 114.6 113.0 MBA Mortgage Applications May-19th - 4.40% (4.10%) 2.60 May-24th Canada BoC Rate Decision 0.50% 0.50% 0.50% 2.50 UK GDP QoQ 1Q P 0.30% 0.20% 0.30% 2.40 UK GDP YoY 1Q P 2.10% 2.00% 2.10% US Initial Jobless Claims May-20th 238k 234k 233k 2.30 Russia Gold and Forex Reserve May-19th - 405.0b 399.7b Japan Tokyo CPI Food YoY May 0.00% 0.10% (0.10%) 2.10 Italy Manufacturing Confidence May 108.0 106.9 107.7 2.00 US GDP Annualized QoQ 1Q S 0.90% 1.20% 0.70% US Durable Goods Orders Apr P (1.50%) (0.70%) 2.30% US U. of Mich. Sentiment May F 97.5 97.1 97.7 Source: Bloomberg GLOBAL NEWS 2.20 22-May 15-May 08-May 01-May 24-Apr 17-Apr 10-Apr 03-Apr 27-Mar 27-Feb 2.16 20-Mar US UST 10yr Bond 13-Mar Event Germany IFO Business Climate 06-Mar Region Source: Bloomberg  Dubai is planning to create USD 1.0bn investment fund focusing on shipping to develop the Gulf city’s maritime sector. (Source: Gulf Times)  US GDP increased at an annual rate of 1.2% in Apr-17 as compared to that of 0.7% in Mar-17. (Source: Reuters)   US White House presented President Trump's first full budget, which seeks to slash government spending by USD 3.6tn over the next 10 years. (Source: Reuters) Abu Dhabi's economy is mending due to heavy government spending and its GDP is expected to grow by 3.0% in 2017 and 4.0% in 2018, according to Department of Economic Development. (Source: Zawya)  Saudi Arabia-US deals worth at least USD 380.0bn were signed during the visit of the US President. (Source: Zawya)  US existing home sales declined 2.3% YoY to 5.6mn units in Apr-17 led by a chronic shortage of houses. (Source: Reuters)  Saudi Arabia and USA bilateral trade exceeded SAR 2.0tn in 10 years Saudi Ministry of Commerce and Investment (MCI) said. (Source:  US Trade deficit widened to USD 67.6bn as compared to that of USD 65.1bn in Mar-17. (Source: Marketwatch)  OPEC and non-members led by Russia decided to extend cuts in oil output by 1.8 mn bpd by nine months to Mar-18. (source: Reuters)  Japan's exports increased 7.5% YoY in Apr-17 due to rise in shipments of semiconductors and steel, while its trade surplus with the US declined 4.2% YoY. (Source: Reuters)  China's economy is expected to grow by 6.8% YoY in Q2-17 and CPI is forecasted to be 1.4% for the same period. (Source: Reuters)  Moody's downgraded China's credit ratings to A1 from Aa3, expecting its financial strength to fade away in coming years. (Source: Reuters) Mubasher)  Saudi Arabia’s private sector businesses with annual revenues of SAR 0.38mn will be included in the VAT decision while that of SAR 0.19mn have an option to pay, according to General Authority for Zakat and Tax. (Source: Zawya)  Oman’s USD 2.0bn Sukuk Islamic bond sale attracted orders for more than 3x the issue size. (Source: Bloomberg)  Kuwait government has agreed to spend nearby KWD 94.0mn for development of roads and other key infrastructure in South Surra neighbourhood of its capital city. (Source: Trade Arabia)  Bahrain inflation rate rose by 0.9% YoY to 128.7 points in Apr-17 due to rise in residential prices and facilities. CPI edged up by 0.8% YoY during the first four months in 2017. (Source: Mubasher)  Moody’s downgraded Hong Kong’s local and foreign currency ratings from AA2 to AA1. (Source: Mubasher)  Turkey’s gross debt stock stood at TRY 794.5bn for Apr-17, of which, more than 60.0% was in domestic currency. (Source: AA)   Turkey FDI stood at USD 1.6bn in Mar-17 and rose by 2.0% YoY in Q117 to USD 2.8bn. (Source: AA) Foreign investments in Qatar increased by 11.0% YoY to QAR 537.3bn, 25% of which was from FDI. (Source: Gulf Times)  Qatar based companies are expected to become VAT compliant soon, with the Cabinet recently approving the draft law on the implementation of VAT. (Source: Qatar Tribune)  The Ministry of Economy and Commerce (MEC) is planning for price reductions on consumer goods as a part of initiatives to mark the holy month of Ramadan. (Source: QNA)  Qatar and Pakistan’s trade volume is expected to cross USD 1bn in 2017 with first full year of LNG import from Qatar, a senior official of Pakistan's embassy said. (Source: Qatar Tribune)  Qatar’s power generation capacity is forecasted to enhance by 50.0% to 13.1GW by 2018, MENA project tracker Venturesonsite reported. QATAR NEWS GCC NEWS  GCC countries grid inter-connectivity will generate USD 33.0bn in investments, economic and energy savings for the bloc over the next 25 years, according to Dun & Bradstreet. (Source: Gulf Times)  UAE banking sector liquidity conditions has eased in Q1-17 as gross loan-to-deposit rate fell to 99.7% in Mar-17 as compared to 100.3% in Feb-17, according to the Central Bank of UAE. (Source: Zawya)  UAE is committed to oil production targets agreed in the OPEC deal to curb output, but is expanding its oil and gas production capacity, the energy minister said. (Source: Zawya)  Abu Dhabi Fund for Development has invested a total of AED 80bn into key development projects in several major sectors across the globe till date. (Source: Gulfbase)  Dubai hardware and tools trade was valued at AED 5.1bn in 2016 of which the US, China, Italy, Germany and India accounted for 52.0% of total trade, according to Dubai Customs. (Source: Construction Week Online) (Source: The Peninsula)  As per Qatar Tourism Authority, the cruise industry has the potential to generate over QAR 350.0mn per annum by 2026. (Source: Qatar Tribune)  QSE and Stenden University in Qatar (SUQ) inked MoU to promote partnership and will be working together to collaborate in the fields of education, training, capacity building and community development. (Source: The Peninsula) 1
2. WEEKLY WRAP May 28 , 2017 EQUITY Index Price S&P 500 WTD %Δ MTD %Δ YTD %Δ COMMENTARY Index Price WTD %Δ MTD %Δ YTD %Δ 2,415.8 1.4 1.3 7.9 MSCI EM 1,017.0 2.1 4.0 17.9 21,080.3 1.3 0.7 6.7 S&P GCC 1,637.3 (0.1) 0.7 4.2 Nasdaq 5,788.4 2.4 3.7 19.0 Dow Jones Islamic 3,273.2 1.0 2.7 12.6 FTSE 100 7,547.6 1.0 4.8 5.7 KSA (TASI) 6,871.7 (1.0) (2.0) (4.7) DAX 30 12,602.2 (0.3) 1.3 9.8 UAE (DFM) 3,327.1 (1.5) (2.6) (5.8) CAC 40 5,336.6 0.2 1.3 9.8 UAE (ADX) 4,516.8 (1.4) (0.1) (0.6) BIST 100 97,533.3 2.5 3.0 24.8 Qatar (DSM) 10,060.5 (0.4) (0.0) (3.6) Nikkei 16.3 DJIA 19,686.8 0.5 2.6 3.0 Kuwait (KSE) 6,687.5 (0.6) (2.3) Sh. Comp 3,110.1 0.6 (1.4) 0.2 Bahrain (BAX) 1,314.2 0.4 (1.6) 7.7 Hang Seng 25,639.3 1.8 4.2 16.5 Oman (MSM) 5,403.1 (0.2) (2.0) (6.6) Sensex 31,028.2 1.8 3.7 16.5 Jordan (ASEGI) 2,156.4 (0.4) (1.3) (0.6) Source: Bloomberg GLOBAL INDICES Weekly Performance (%) YTD Performance (%) 2.5 2.4 2.1 1.8 1.8 BIST 100 Nasdaq MSCI EM Sensex Hang Seng S&P 500 DJIA FTSE 100 Sh. Comp Nikkei CAC 40 DAX 30 Jordan (ASEGI) 1.4 1.3 1.0 0.6 0.5 0.2 (0.3) (0.4) (1.0) 0.0 1.0 2.0 24.8 BIST 100 Nasdaq MSCI EM Hang Seng Sensex DAX 30 CAC 40 S&P 500 DJIA FTSE 100 Nikkei Sh. Comp Jordan (ASEGI) (0.6) 19.0 17.9 16.5 16.5 9.8 9.8 7.9 6.7 5.7 3.0 0.2 (5.0) 0.0 3.0 Source: Bloomberg 5.0 10.0 15.0 20.0 25.0 30.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) Dow Jones Islamic 1.0 Bahrain (BAX) 0.4 S&P GCC Qatar (DSM) UAE (DFM) 4.2 UAE (ADX) (0.4) Qatar (DSM) (0.6) KSA (TASI) UAE (ADX) 7.7 S&P GCC (0.2) Kuwait (KSE) 16.3 12.6 Bahrain (BAX) (0.1) Oman (MSM) Kuwait (KSE) Dow Jones Islamic KSA (TASI) (1.0) (0.6) (3.6) (4.7) UAE (DFM) (5.8) (1.4) Oman (MSM) (6.6) (1.5) (10.0) (5.0) (2.0) (1.5) (1.0) (0.5) 0.0 0.5 1.0 1.5 Source: Bloomberg 0.0 5.0 10.0 15.0 Global Most major global indices rallied this week. In US, the rally was driven by technology stocks, which helped the tech heavy Nasdaq outperform its peers. S&P also reached record highs, however a plunge in oil prices post OPEC meet, weighed on Energy stocks, thereby capping gains in the broad index. Macro releases like a slight upward US GDP data revision and the release of minutes of Fed meet showcasing a more dovish outlook had little impact on the markets. European indices were largely unmoved as positive PMI data for the bloc was countered by fall in Energy, Automobile, and Financial shares. While energy stocks tracked weak oil prices, Automobiles came under pressure over ever expanding emission probes and comments by the US President Trump highlighting his concerns over Germany’s car exports to the US. Strong export numbers posted by Japan, aided by buoyant service PMI and another growth in core consumer prices lifted Japan’s Nikkei by 0.5%. GCC Gulf indices closed lower during the week tracking a drop in oil prices. Saudi Arabia’s benchmark started on a positive note, after the US President signed deals amounting to USD 200bn with Saudi companies; however the index pared most of its gains to close 1.0% lower. In Dubai, DXB Entertainments was amongst the top losers for the week as the upcoming holy month and beginning of hot summer season is expected to reduce footfalls at the company’s theme parks. Qatar QE index closed 0.4% lower for the weak with Ezdan Holdings leading decliners as the company proposed delisting from the bourse. Sell-off was prominent by foreign institutions and non-Qatari individuals. Apart from Real Estate index, which was impacted by Ezdan, Telecom and Consumer goods also witnessed significant selling pressure. Overall trade turnover and volumes were on the rise this week, which saw Banking, Telecom and Real Estate sectors account for more than 89% of the volumes. 20.0 Source: Bloomberg Indicator Price 11,500 DSM INDEX Last Close 10,060.5 11,000 MAVG 50 10,235.1 MAVG 100 10,476.9 MAVG 200 10,436.6 6 Month High 11,057.8 6 Month Low 9,833.6 RSI (14 Days) 45.1 10,060.5 10,500 10,000 9,500 Dec-16 Jan-17 Index Mar-17 50 SMA 100 SMA Apr-17 200 SMA Source: Bloomberg 2
3. WEEKLY WRAP May 28 , 2017 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 3.50 5.00 2.91 4.26 3.00 2.50 2.65 1.79 1.30 2.00 1.39 1.00 0.91 4.47 3.10 2.79 2.48 3.00 1.85 1.67 1.00 0.50 2.25 2.06 2.00 1.50 4.00 3.24 1.72 2.46 2.58 5 Yrs 7 Yrs 1.46 0.00 0.00 2 Yrs 5 Yrs 7 Yrs Current 10 Yrs 2 Yrs 30 Yrs Current Last Year Source: Bloomberg 30 Yrs Source: Bloomberg CDS 5 Years CDS 10 Yrs Last Year Qatar Govt. Int. Bonds Price (BPS) WTD Δ (BPS) MTD Δ (BPS) YTD Δ (BPS) Global Maturity Price (USD) Z Spread (BPS) Yield (%) WTD Δ (USD) YTD Δ (USD) QGS 2018 100.3 24.9 1.37 (0.0) 0.0 QGIB 2019 108.8 21.2 1.62 0.0 (1.2) QGIB 2020 108.3 40.7 1.95 0.0 0.2 Qatari Diar 2020 100.2 55.2 2.28 0.2 2.0 QGIB 2021 108.1 62.0 2.21 0.1 0.6 US 21.8 0.0 (3.1) (5.0) UK 24.2 (0.3) (2.6) (6.9) Germany 14.9 (1.2) (1.4) (6.9) France 28.1 (1.2) (5.5) (8.9) QGIB 2022 108.8 65.2 2.43 0.0 1.6 Italy 159.1 (4.0) (9.6) 1.9 QGS 2023 103.2 70.6 2.57 0.1 0.9 Greece 626.4 (54.7) (245.6) (421.1) QGIB 2026 101.2 95.9 3.07 0.3 4.4 QGIB 2030 162.0 147.0 3.66 0.4 7.1 QGIB 2040 131.6 181.9 4.19 0.7 6.4 QGIB 2042 122.8 183.0 4.22 0.7 6.0 QGIB 2046 106.1 181.7 4.24 0.9 5.8 Russia 148.1 (4.5) (5.5) (83.2) Japan 26.3 1.1 0.8 (3.7) Turkey 197.3 (12.9) (12.8) (75.8) Brazil 238.7 (8.4) 21.5 (42.1) Source: Bloomberg, QCB Egypt 335.0 (16.2) (10.0) (117.4) US Swap Rates Abu Dhabi 39.0 (1.1) (1.9) (22.5) Bahrain 220.0 (2.2) (2.4) (82.5) Dubai 104.0 (8.7) (7.7) Qatar 58.2 (1.9) (0.6) GCC Saudi Arabia Tenor 89.4 (4.2) 3.0 Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 1.200 0.014 0.203 6M LIBOR 1.418 0.003 0.100 (45.8) 12M LIBOR 1.723 0.000 0.037 (22.1) 2 years 1.532 0.018 0.075 5 years 1.878 0.022 (0.099) 10 years 2.200 0.028 (0.138) 30 years 2.481 0.049 (0.115) (24.0) International Credit Spreads iTraxx Europe 61.6 (2.3) (5.3) (11.2) Source: Bloomberg iTraxx Europe Crossover 250.0 (6.0) (17.6) (41.4) Commentary CDX North America IG 62.6 (2.1) (1.5) (5.2) CDX North America HY 326.6 (4.8) 0.4 (27.5) iTraxxSovX CEEMEA NA NA NA NA iTraxx Europe Senior Financial 34.2 (3.8) (6.3) (35.8) iTraxx Europe Sub Financial 44.9 (7.0) (14.3) (79.8) Treasury yields were broadly range-bound during last week on light volumes. Yields rose in earlier sessions with increased supply pressure as the US treasury department planned to auctioned USD 88.0bn coupon bearing government bonds during the week. The yields were however pressured after the release of the minutes from the FOMC meeting which stated the Central Bank’s plan for scaling back its massive USD 4.5 trillion balance sheet. Continued concerns over global supply glut of crude oil, even after the extended production cuts, also weighed on the treasury yields towards the end of the week. Source: Bloomberg 3
4. WEEKLY WRAP May 28 , 2017 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 52.2 WTI Crude (USD/bbl) 49.8 Oil prices rose earlier in the week in anticipation of a successful meeting between OPEC and non-OPEC members. Crude prices however fell later in the week as the extension of output curbs in the 25th May meeting, disappointed investors who had hoped for larger cuts. Oil producers agreed to extend supply cuts of 1.8 million bpd until the end of the Q1 2018. Natural gas prices fell for the week with EIA reporting higher-than-expected rise in inventories. Copper prices fell as Moody’s downgraded China’s rating, indicating the country’s slowing growth and rising debt. The prices were however supported later in the week, on supply concerns at Indonesia’s Grasberg mine, one of the world’s biggest copper mine. Natural Gas (USD/mmBTU) 3.3 Gold (USD/t oz.) 1,268.1 Silver (USD/t oz.) 17.3 Copper (USD/lb) 256.6 Source: Bloomberg Weekly Performance (%) YTD Performance (%) Silver Gold 3.2 Gold Copper (0.6) Copper Natural Gas (0.6) WTI Crude WTI Crude Natural Gas (2.7) (4.0) (3.0) (2.0) 8.3 2.4 (7.3) Brent (1.1) Brent 10.1 Silver 1.2 (1.0) 0.0 1.0 2.0 3.0 (8.2) (11.1) (15.0) 4.0 Source: Bloomberg (10.0) (5.0) 0.0 5.0 10.0 15.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.2834 USD/INR 63.9450 EUR/USD 1.1213 USD/CNY 6.8555 CAD/USD 0.7437 USD/TRY 3.5780 AUD/USD 0.7448 USD/EGP 18.0985 0.7061 USD/ZAR 12.8819 111.3300 USD/RUB 56.5146 NZD/USD USD/JPY Commentary USD edged up against its major peers last week following the US FOMC minutes, which supported US interest rate hike in June. Upwardly revised data on US GDP growth also bolstered expectations of interest rate hike. The currency gains were however capped due to political uncertainties. CAD rose earlier in the week tracking rise in oil prices. The currency was also supported by Bank of Canada’s upbeat outlook about the economy and decision to keep interest rates unchanged. GBP ended lower for the week, weighed by GDP downgrade and election concerns that the incumbent parliament may not get the landslide victory they were expecting. Source: Bloomberg Weekly Performance (%) ZAR NZD RUB CAD CNY INR JPY TRY AUD EGP EUR GBP (3.0) Source: Bloomberg YTD Performance (%) RUB ZAR EUR INR JPY GBP AUD NZD CNY EGP CAD TRY 2.8 2.0 0.6 0.5 0.1 (0.1) (0.1) (0.1) (0.1) (0.2) (0.2) (1.8) (2.0) (1.0) 0.0 1.0 2.0 3.0 4.0 8.9 6.8 6.3 5.3 5.1 3.8 3.3 1.8 1.4 0.2 (0.1) (1.5) (4.0) (2.0) 0.0 2.0 4.0 6.0 8.0 10.0 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