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GCC Daily Market Update - 29 April

IM Insights
By IM Insights
5 years ago
GCC Daily Market Update - 29 April

Rub, Sales


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  1. WEEKLY WRAP April 29 , 2018 ECONOMIC UPDATE & NEWS Actual Prior 53.5 53.4 53.7 Apr 102.8 102.1 103.3 3.10 3.00 UST 10yr Bond Manufacturing Confidence Apr 108.8 107.7 108.9 Eurozone ECB Main Refinancing Rate Apr-26th 0.00% 0.00% 0.00% US Initial Jobless Claims Apr-21st 230k 209k 233k 2.90 Japan Jobless Rate Mar 2.50% 2.50% 2.50% 2.80 Japan Industrial Production MoM Mar P 0.50% 1.20% 2.00% France CPI YoY Apr P 1.60% 1.60% 1.60% UK GDP QoQ Q1 A 0.30% 0.10% 0.40% UK GDP YoY Q1 A 1.40% 1.20% 1.40% US GDP Annualized QoQ Q1 A 2.00% 2.30% 2.90% US U. of Mich. Sentiment Apr F 98 98.8 97.8 Source: Bloomberg 2.96 2.70 23-Apr 16-Apr 09-Apr 02-Apr 26-Mar 19-Mar 12-Mar 05-Mar 2.60 29-Jan Italy Survey Apr P 26-Feb Germany IFO Business Climate Period 19-Feb Markit Manufacturing PMI 12-Feb Event France 05-Feb Region Source: Bloomberg  Abu Dhabi Ports has announced that 15 Chinese companies have signed an agreement to invest USD 1.0bn in the Abu Dhabi’s Khalifa Port Free Trade Zone. (Source: Trade Arabia)  Sharjah’s tourism sector contributes AED 7.0bn or 8.5% to the total emirate’s GDP of AED 83.0bn, according to chairman of the Sharjah Commerce and Tourism Development Authority. (Source: Trade Arabia)  Saudi Arabia is aiming to create 1.2mn jobs by 2022 to reduce the unemployment rate to 9.0% from current 12.8% by focusing on the retail sector, according to Ministry of labor. (Source: Reuters)  Saudi Arabian government is planning to implement a privatization program to generate between USD 9.0-11.0bn in revenue by 2020 while creating around 12,000 jobs. (Source: Arabian Business)  Saudi Arabia completed the sale of its USD 1.3bn Islamic sukuk in three tranches maturing in five, seven and ten years to finance its budget deficit. (Source: Arabian Business)  China is expected to introduce an additional reduction to its reserve requirement ratio, while the money supply (M2) growth is expected to grow above 9.0% in 2018. (Source: Reuters)  IMF expects sharp decline in Oman’s fiscal deficit to less than 4.0% of GDP in 2019 and 2018 from around 12.8% of GDP in 2017 led by higher oil prices and spending cuts. (Source: Muscat Daily)  Fitch ratings services has maintained its ‘A’ rating for Japan while maintaining a ‘stable’ outlook considering the high domestic savings rate and bias of home investors. (Source: FxStreet)  The contribution of Bahrain’s tourism and hospitality sector to the GDP, which stood at 6.3% in FY-17 is expected to reach to double digits over next few years. (Source: Arabian Business)  IMF has supported Japan’s multilateral framework of Trans-Pacific Partnership pact by saying that it works better in preserving trade imbalances than a bilateral deal. (Source: Reuters)  Kuwait is expected to spend USD 3.0bn on new residential projects, as a part of its strategy to invest in infrastructure including the setting up of new road projects and other key amenities. (Source: Trade Arabia) GLOBAL NEWS  The US economy grew at an annualized rate of 2.3% during Q1-18, slower as compared to 2.9% growth in Q4-17, on account of moderation in business spending on equipment and investment in home building. (Source: CNBC)  US existing home sales rose 1.1% MoM to 5.60mn units in March-18 due to recovery in Northeast and Midwest regions, while new home sales rose 4.0% MoM to a seasonally adjusted annual rate of 694,000 units in the same period. (Source: Reuters)  Moody’s has maintained its top-notch ‘Aaa’ credit rating for the US, citing that the strength in the economy would help in balancing the nation’s lower fiscal strength. (Source: Reuters)  UK’s public sector net borrowings decreased by 9.0% YoY to GBP 42.6bn as at the end of March-18. (Source: ONS)  Turkey’s central bank increased the rate it uses to set bank funding costs by 75 bps to 13.5%, however it kept the short-term interest rates unchanged at 8.0%. (Source: AA). QATAR NEWS  Qatar’s Emir had a discussion with the newly elected president of Sierra Leone which focused on bilateral co-operation especially on agriculture, education, tourism and infrastructure. (Source: Gulf times) GCC NEWS  Occupancy rates of UAE hotels increased by 1.1% YoY to 83.4% in Q118 led by healthy demand growth of 5.2% YoY which outpaced continued supply growth, according to STR. (Source: Trade Arabia)  Qatar budget spending on infrastructure is rising up to 45.8% of the total planned budget in 2018 to QAR 29.0bn most of which would be spent on facilities related to FIFA World Cup 2022. (Source: Gulf times)  Dubai’s real GDP increased by 2.6% YoY to AED 389.0bn (USD 106.0 bn) in 2017 led by higher growth of 18.5% in the transportation and storage sector, as per Dubai Statistics Centre. (Source: Trade Arabia)  Supreme Committee for Delivery & Legacy has committed tenders worth QAR 700.0mn for the 2022 FIFA World Cup exclusively for the SMEs. (Source: Gulf times)  Rents of Dubai based residential projects have remained stable in Q118 as compared to a 7.7% decline in 2017, according to global property consultancy Cluttons. (Source: Arabian Business)  Qatar Petroleum’s high level delegation discussed ways to strengthen and expand energy cooperation with Poland’s Energy Minister especially in the field of LNG sector. (Source: Gulf times)  Abu Dhabi’s average residential sale prices declined by 1.0% YoY in Q118 and by 5.0% YoY due to negative impact of the sluggish investor sentiments according to CBRE. (Source: Arabian Business)  Public Works Authority (Ashghal) has announced that about 100 infrastructure projects with an investment value of QAR 40.0bn are to be executed over next two years. (Source: Qatar tribune)  Total number of hotel guests in Abu Dhabi increased 10.1% YoY to 4.9mn in 2017, while the total hotel proceeds reached AED 5.6bn (USD 1.5bn) as per Abu Dhabi Statistics Centre. (Source: Trade Arabia)  Qatar Insurance Company launched its unique initiative ‘QIC Anaya’ which will grant all Qataris and residents cover up to 70% of medical expenses. (Source: Gulf times) 1
  2. WEEKLY WRAP April 29 , 2018 EQUITY Index Price S&P 500 WTD %Δ MTD %Δ YTD %Δ COMMENTARY Index Price WTD %Δ MTD %Δ YTD %Δ 2,669.9 (0.0) 1.1 (0.1) MSCI EM 1,156.3 (1.0) (1.2) (0.2) 24,311.2 (0.6) 0.9 (1.7) S&P GCC 1,682.9 (0.8) 1.9 5.7 Nasdaq 6,656.4 (0.2) 1.1 4.1 Dow Jones Islamic 3,636.5 (0.3) 0.6 (0.1) FTSE 100 7,502.2 1.8 6.3 (2.4) KSA (TASI) 8,248.5 (0.3) 4.8 14.1 12,580.9 0.3 4.0 (2.6) UAE (DFM) 3,042.8 (1.3) (2.1) (9.7) DJIA DAX 30 CAC 40 BIST 100 Nikkei 5,483.2 1.3 6.1 3.2 UAE (ADX) 4,697.2 (0.2) 2.4 6.8 107,614.3 (3.0) (6.4) (6.7) Qatar (DSM) 9,088.0 (1.2) 6.0 6.6 22,467.9 1.4 4.7 (1.3) Kuwait (KSE) 4,803.0 0.1 (3.2) (3.2)* Sh. Comp 3,082.2 0.3 (2.7) (6.8) Bahrain (BAX) 1,263.1 (2.9) (4.2) (5.2) Hang Seng 30,280.7 (0.5) 0.6 1.2 Oman (MSM) 4,722.5 (0.8) (1.1) (7.4) Sensex 34,969.7 1.6 6.1 2.7 Jordan (ASEGI) 2,195.2 0.4 (1.7) 3.2 Source: Bloomberg, * since 1st April 2018 GLOBAL INDICES Weekly Performance (%) YTD Performance (%) 1.8 1.6 1.4 1.3 FTSE 100 Sensex Nikkei CAC 40 Jordan (ASEGI) Sh. Comp DAX 30 S&P 500 Nasdaq Hang Seng DJIA MSCI EM BIST 100 0.4 0.3 0.3 (0.0) (0.2) (0.5) (0.6) (1.0) (3.0) (4.0) (3.0) (2.0) (1.0) 0.0 1.0 2.0 1.2 (6.7) (6.8) Source: Bloomberg (5.0) 0.0 5.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) Kuwait (KSE) KSA (TASI) 0.1 UAE (ADX) Dow Jones Islamic (0.3) Qatar (DSM) KSA (TASI) (0.3) S&P GCC S&P GCC (0.8) Dow Jones Islamic Oman (MSM) (0.8) Kuwait (KSE)* Qatar (DSM) (1.2) Bahrain (BAX) UAE (DFM) (1.3) Oman (MSM) Bahrain (BAX) (3.0) 6.8 6.6 5.7 (0.1) (3.2) (5.2) (7.4) UAE (DFM) (9.7) (2.9) (4.0) Qatar The QE index inched 1.2% lower during the last week, on the back increased net selling activity on the part of domestic institutional investors. Total trading value and volume declined during the last week, with Industrial, Telecom and Banking sectors together accounting for 75.0% of the total trading volume. Ooredoo dropped 4.2%, after the company’s Q1-18 earnings data missed market expectations. Out of 45 listed shares, 44 exchanged hands, 25 declined, 17 advanced and 3 remained unchanged. 14.1 UAE (ADX) (0.2) (2.0) (1.0) 0.0 (15.0)(10.0) (5.0) 0.0 1.0 The Stoxx Europe 600 index rose 0.9%, as investors reacted positively towards the latest batch of corporate earnings data and a dovish monetary policy statement from the European Central Bank. The FTSE 100 index rose by 1.8%, as dismal UK growth data weighed on the GBP, supporting the exporters listed on the benchmark. The Turkish benchmark dropped 3.0%, after the central bank introduced a larger than expected rate hike. GCC Most GCC equity markets ended lower during the last week. The Saudi Arabian index fell by 0.3%, as profit booking by the investors and disappointing earnings report by few companies weighed on the index. Petrochemical stocks were among the notable losers during the last week. The Dubai’s benchmark inched 1.3%, amid weakness in Real Estate stocks. DAMAC Properties dropped after lowering its annual cash dividend for FY-17. The Abu Dhabi index inched 0.2% lower, weighed by losses in index heavy-weight Etisalat, which fell 0.2% after the company’s Q1-18 earnings remained broadly flat. (0.1) (0.2) (1.3) (1.7) (2.4) (2.6) (10.0) 3.0 The US equity markets ended lower during the last week, as persistent increase in the treasury yields stoked fears about higher borrowing rates in the nation. The S&P 500 ended marginally lower amid weakness in Industrial stocks, after heavy-weight Caterpillar provided bearish outlook for its future margins. In Asia, the Japanese benchmark inched 1.4% higher, amid weakness in the JPY. 4.1 3.2 3.2 2.7 Nasdaq Jordan (ASEGI) CAC 40 Sensex Hang Seng S&P 500 MSCI EM Nikkei DJIA FTSE 100 DAX 30 BIST 100 Sh. Comp Global 5.0 10.0 15.0 20.0 Source: Bloomberg, * since 1st April 2018 Source: Bloomberg DSM INDEX 10,500 9,088.0 9,500 8,500 7,500 Nov-17 Dec-17 Index 50 SMA Feb-18 100 SMA 200 SMA Apr-18 Indicator Price Last Close 9,088.0 MAVG 50 8,847.8 MAVG 100 8,794.3 MAVG 200 8,683.6 6 Month High 9,459.6 6 Month Low 7,714.3 RSI (14 Days) 59.0 Source: Bloomberg 2
  3. WEEKLY WRAP April 29 , 2018 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 3.50 3.00 2.39 2.53 2.89 2.00 0.50 4.00 2.24 1.50 3.22 4.34 3.90 3.48 4.31 3.00 1.77 1.21 4.89 5.00 2.50 1.00 6.00 3.07 2.86 2.71 3.52 2.00 1.41 1.00 1.85 2.66 2.28 0.00 0.00 2 Yrs 3 Yrs 5 Yrs Current 10 Yrs Last Year 2 Yrs 30 Yrs Source: Bloomberg 30 Yrs Qatar Govt. Int. Bonds Price (BPS) WTD Δ (BPS) MTD Δ (BPS) YTD Δ (BPS) Global US 10 Yrs Last Year Source: Bloomberg CDS 5 Years CDS 3 Yrs 5 Yrs Current 27.9 (0.4) 0.3 0.6 Maturity Price (USD) Z Spread (BPS) Yield (%) WTD Δ (USD) YTD Δ (USD) QGIB 2019 103.4 36.3 2.76 0.0 (1.9) QGIB 2020 103.2 59.5 3.18 0.0 (2.0) QGIB 2021 96.6 72.1 3.50 0.0 (1.8) Qatari Diar 2020 103.1 77.9 3.48 (0.0) (1.9) QGIB 2022 102.7 84.7 3.67 0.0 (2.9) (1.6) UK 17.9 (0.5) (1.0) (2.6) Germany 11.1 (0.1) (0.7) 0.5 France 18.3 0.3 (0.4) 0.2 QGS 2023 97.4 93.5 3.80 0.0 Italy 89.0 2.9 (13.8) (31.2) QGIB 2023 99.7 103.4 3.93 (0.0) NA Greece 330.9 (8.9) (34.5) (96.6) QGIB 2026 93.4 125.4 4.19 0.0 (4.2) Russia 132.4 (2.1) 7.5 2.6 QGIB 2028 99.8 154.1 4.51 0.0 NA QGIB 2030 147.1 163.4 4.60 0.1 (8.8) QGIB 2040 118.5 196.3 4.97 0.1 (10.0) QGIB 2042 110.3 196.9 4.98 (0.0) (10.2) QGIB 2046 94.2 198.8 4.99 0.3 (9.7) QGIB 2048 99.1 214.6 5.15 0.7 NA Japan 25.8 0.6 0.3 (1.4) Turkey 196.3 (1.1) (0.5) 29.4 Brazil 171.2 (0.6) 3.7 7.3 Egypt 277.4 0.0 4.8 (51.8) Source: Bloomberg, QCB GCC Abu Dhabi 64.7 1.0 1.2 0.1 US Swap Rates Bahrain 288.9 (0.3) (8.5) 1.6 Tenor Dubai 114.9 1.4 7.3 (14.3) Qatar 89.6 1.1 1.1 (13.9) Saudi Arabia 89.4 1.0 2.8 (4.7) International Credit Spreads iTraxx Europe 54.4 (0.4) (3.6) (5.4) (13.6) 9.7 iTraxx Europe Crossover 271.5 39.2 CDX North America IG 60.1 (0.4) (5.4) 11.0 CDX North America HY 337.7 (2.8) (23.0) 30.2 iTraxxSovX CEEMEA NA NA NA NA iTraxx Europe Senior Financial 15.4 (0.0) (7.0) 1.9 iTraxx Europe Sub Financial 14.1 (3.4) (13.5) (1.2) Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 2.359 (0.000) 0.665 6M LIBOR 2.522 0.011 0.685 12M LIBOR 2.770 0.010 0.663 2 years 2.736 (0.005) 0.656 5 years 2.910 (0.008) 0.666 10 years 2.989 (0.006) 0.589 30 years 3.015 (0.009) 0.471 Source: Bloomberg Commentary The US treasury yields touched multiyear high levels during the last week, breaking the psychological level of 3.0%. The gains in the yields were largely on the back of speculations of higher inflation in the coming period. Yields on Eurozone government bonds decreased after the ECB President refrained from providing any guidance about the future path of the quantitative easing program. The UK government bond yields inched lower, following the release of discouraging UK growth data. Source: Bloomberg 3
  4. WEEKLY WRAP April 29 , 2018 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 74.6 WTI Crude (USD/bbl) 68.1 Brent crude oil prices ended higher during the last week. Brent oil prices touched their three-year high during the latter half of the week, amid uncertainty about the future course of the Iran’s nuclear deal. Gold closed lower in the last week, as rising USD and bond yields weighed on the yellow metal. Natural gas prices advanced during the past week, after EIA reported a higher than expected decline in the natural gas inventories. Moreover, cooler than normal climate forecast in the northern region of the US also supported natural gas prices. Copper prices edged lower, as investors continued to struggle with the US sanctions on Russian producer Rusal. Moreover, strength in the greenback also weighed on the prices. Natural Gas (USD/mmBTU) 2.8 Gold (USD/t oz.) 1,323.4 Silver (USD/t oz.) 16.4 Copper (USD/lb) 304.6 Source: Bloomberg Weekly Performance (%) YTD Performance (%) Natural Gas WTI Crude 1.2 Brent WTI Crude (4.3) Natural Gas (2.8) Silver (4.4) (5.0) 1.1 Silver (1.0) Copper 11.6 Gold (0.4) Gold 12.7 Brent 0.8 (6.2) Copper (7.7) (4.0) (3.0) (2.0) (1.0) 0.0 1.0 2.0 (10.0) Source: Bloomberg (5.0) 0.0 5.0 10.0 15.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.3811 USD/INR 66.1613 EUR/USD 1.2160 USD/CNY 6.3322 CAD/USD 0.7795 USD/TRY 4.0426 AUD/USD 0.7581 USD/EGP 17.6966 NZD/USD 0.7085 USD/ZAR 12.3294 109.0500 USD/RUB 62.1593 USD/JPY Commentary The USD rose to a four-month high level against a basket of major currencies in the last week, supported by rising US Treasury bond yields. The CAD weakened against USD, after the Bank of Canada Governor stated that the central bank sees no urgency to increase its lending rates in the coming period. The GBP weakened against the USD, following the release of dismal UK growth data. The EUR inched lower against the USD, after the ECB provided no signals to tighten its accommodative policy stance. The TRY bucked the overall trend to inch higher, after the Turkish central bank lifted its rates by 75 bps to support the currency. Source: Bloomberg Weekly Performance (%) YTD Performance (%) TRY EGP INR CAD CNY AUD (1.2) RUB (1.2) JPY (1.3) EUR (1.3) GBP (1.6) NZD (1.7) ZAR(1.8) (2.0) Source: Bloomberg (1.5) 0.8 (0.4) (0.5) (0.6) (1.0) (0.5) 0.0 0.5 1.0 JPY CNY GBP EUR ZAR EGP NZD CAD AUD INR TRY RUB (7.2) (8.0) 3.3 2.8 2.0 1.0 0.8 0.4 (0.2) (2.0) (2.9) (4.0) (5.9) (6.0) (4.0) (2.0) 0.0 2.0 4.0 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