GCC Daily Market Update - 29 October

Transcription

1. WEEKLY WRAP October 29 , 2017 ECONOMIC UPDATE & NEWS 2.30 3Q A 1.50% 1.50% 1.50% Oct-20 - (4.60%) 3.60% Sep P 1.00% 2.20% 2.00% 2.20 Oct-25th 1.00% 1.00% 1.00% 2.10 Manufacturing Confidence Oct 110.0 111.0 110.5 Eurozone ECB Main Refinancing Rate Oct-26th 0.00% 0.00% 0.00% Initial Jobless Claims Oct-21st 235k 233k 223k Russia Gold and Forex Reserve Oct-20th - 425.6b 427.0b US GDP Annualized QoQ 3Q A 2.60% 3.00% 3.10% US U. of Mich. Sentiment Oct F 100.7 100.7 101.1 Source: Bloomberg 2.00 1.90 31-Jul US 2.30 23-Oct Italy 2.40 16-Oct BoC Rate Decision 0.30% 09-Oct Canada 0.40% 02-Oct Durable Goods Orders 0.30% 25-Sep US 3Q A UST 10yr Bond 18-Sep MBA Mortgage Applications 115.3 11-Sep GDP YoY US Prior 116.7 04-Sep UK Actual 115.1 28-Aug GDP QoQ Survey Oct 21-Aug UK Period 14-Aug Event Germany IFO Business Climate 07-Aug Region Source: Bloomberg  Saudi Arabia has become the second-largest petroleum exporter to the US after Canada during H1-17. (Source: Trade Arabia) US budget deficit widened to USD 666.0bn for the FY-17 (year ending Sep-17), despite record receipts. The deficit for the year stood at 3.5% of GDP up from 3.2% in FY-16. (Source: Reuters)  Bahrain has signed an agreement with UAE government for allocation of a pavilion at the mega Expo 2020 Dubai event. (Source:  The Bank of Canada held interest rates steady at 1.0%. Inflation is expected rise to 2.0% a bit later in 2018 and export growth will be slightly slower because of the stronger currency, the nation’s central bank observed. (Source: Reuters)  Bahrain’s imports rose by 18.0% YoY to BHD 1.2bn in Q3-17. China was the top exporter to Bahrain with BHD 166.0mn, followed by the UAE with BHD 126.0mn. (Source: Trade Arabia)   UK GDP rose by 0.4% QoQ in Q3-17. Service sector grew by 0.4% QoQ, while manufacturing grew by 1.0% QoQ. (Source: ONS)  China’s unemployment rate hit 3.95% by the end of Sep-17, however some sectors, especially those targeted by capacity cuts still showed signs of unresolved employment challenges. (Source: Reuters) Bahrain’s cabinet has approved a draft decree which aims to establish the Real Estate Regulatory Authority to develop the real estate sector in accordance with the provisions of the Real Estate Regulatory Law. (Source: Zawya)  Kuwait’s average inflation rose by 0.5% YoY in Sep-17. Index for the Food and Beverages rose by 0.7% YoY and that of Tobacco, Narcotics rose by 2.1% YoY during the same period. (Source: Kuwait Times)  Oman’s nominal GDP grew by 12.3% YoY to OMR 13.0bn in H1-17, supported by growth in crude oil prices in the international market and prudent fiscal policies of the government. (Source: Times of Oman) GLOBAL NEWS   Australian CPI rose by 0.6% QoQ whereas core inflation rose by an average of 0.4% QoQ in Q3-17 driven by rise in electricity and tobacco prices while vegetables and automotive fuels pulled down the inflation. (Source: The Australian)  India’s cabinet approved a USD 32.4bn plan to recapitalize its state banks over the next two years to address the bank balance sheet problem and push growth forward. (Source: Reuters)  Turkey’s residential properties sales soared by 28.8% YoY in Sep-17 to 140,298 houses. The number of properties sold to foreigners rose by 75.2% YoY. (Source: AA) GCC NEWS Trade Arabia) QATAR NEWS  Total non-oil exports for the 9M-17 stood at QAR 13.3bn. Non-oil exports for Sep-17 fell by 12.6% MoM to QAR 1.6bn. (Source: Gulf Times)  The Emir of Qatar amended some provisions on real estate leasing. The prominent one was the conclusion of leasing in writing. (Source: Gulf Times)   UAE Vice President has launched the flagship Dubai Internet of Things Strategy and the Data Wealth initiative to safeguard the emirate’s digital wealth. (Source: Trade Arabia) Qatar and Russia signed a technical military co-operation agreement relating to air defense. The two nations have also signed a legal contract on general conditions for military supplies. (Source: Gulf Times)   The UAE Central Bank withdrew AED 23.8bn in excess liquidity during the four months to Sep-17, as part of its policy to manage excess liquidity in the banking system. (Source: Zawya) Qatar foreign trade balance rose by 41.5% YoY while total exports of goods increased by 20.0% YoY in Sep-17. The foreign merchandise trade balance amounted to QAR 12.5bn. (Source: The Peninsula)   Dubai Financial Market (DFM) and Abu Dhabi Securities exchange (ADX) inked a license agreement with Nasdaq Dubai to launch index futures contracts based on DFM and ADX General Index respectively, on Nasdaq Dubai’s equity futures market. (Source: Trade Arabia) Qatar Stock Exchange is launching a sustainability and ESG dashboard to help listed companies report their sustainability performance digitally from Dec-17. (Source: Gulf Times)  Scientific and Technological Research Council of Turkey has proposed collaboration with Qatar in areas such as space, energy, aviation and many more. (Source: Gulf Times)  Sharjah’s real estate trade value rose by 37.2% YoY to AED 8.2bn in Q3-17. (Source: Trade Arabia)   The Sharjah government has granted 362 residential plots to its citizens through its Permanent Committee on Lands Allocation spread across several key areas. (Source: Trade Arabia) Qatar's Public Works Authority is executing more than 20 infrastructure development projects worth QAR 2.2bn along with its preparation for the World Cup 2022. (Source: Trade Arabia)   Saudi Arabia announced USD 500.0bn plan to create a business and industrial zone extending across its borders into Jordan and Egypt. Qatar energy minister Mohammed al-Sada said that Qatar would support an extension of global oil output cuts if needed. (Source: Reuters) (Source: Reuters) 1
2. WEEKLY WRAP October 29 , 2017 EQUITY Index Price S&P 500 DJIA WTD %Δ MTD %Δ YTD %Δ COMMENTARY Index Price WTD %Δ MTD %Δ YTD %Δ 2,581.1 0.2 2.4 15.3 MSCI EM 1,110.2 (0.8) 2.6 28.8 23,434.2 0.5 4.6 18.6 S&P GCC 1,635.6 (0.7) (0.1) 4.1 Nasdaq 6,213.5 1.7 3.9 27.8 Dow Jones Islamic 3,514.4 0.1 2.2 20.9 FTSE 100 7,505.0 (0.2) 1.8 5.1 KSA (TASI) 6,910.7 (1.4) (5.1) (4.2) DAX 30 13,217.5 1.7 3.0 15.1 UAE (DFM) 3,651.1 (0.6) 2.4 3.4 CAC 40 5,494.1 2.3 3.1 13.0 UAE (ADX) 4,467.7 (0.8) 1.6 (1.7) 107,884.0 (0.6) 4.8 38.1 Qatar (DSM) 8,128.3 (0.5) (2.2) (22.1) 15.2 BIST 100 Nikkei 22,008.5 2.6 8.1 15.1 Kuwait (KSE) 6,623.5 (0.1) (0.8) Sh. Comp 3,416.8 1.1 2.0 10.1 Bahrain (BAX) 1,277.4 (0.1) (0.5) 4.7 Hang Seng 28,438.9 (0.2) 3.2 29.3 Oman (MSM) 4,958.6 (2.1) (3.5) (14.3) Sensex 33,157.2 2.4 6.0 24.5 Jordan (ASEGI) 2,102.3 (0.0) (0.9) (3.1) Source: Bloomberg GLOBAL INDICES Weekly Performance (%) YTD Performance (%) 2.6 2.4 2.3 Nikkei Sensex CAC 40 DAX 30 Nasdaq Sh. Comp DJIA S&P 500 Jordan (ASEGI) Hang Seng FTSE 100 BIST 100 MSCI EM 1.7 1.7 1.1 0.5 0.2 (0.0) (0.2) (0.2) (0.6) (0.8) (2.0) (1.0) 0.0 1.0 2.0 38.1 BIST 100 Hang Seng MSCI EM Nasdaq Sensex DJIA S&P 500 Nikkei DAX 30 CAC 40 Sh. Comp FTSE 100 Jordan (ASEGI) (3.1) (10.0) 3.0 Source: Bloomberg 29.3 28.8 27.8 24.5 18.6 15.3 15.1 15.1 13.0 10.1 5.1 0.0 10.0 20.0 30.0 40.0 50.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) Dow Jones Islamic 0.1 Bahrain (BAX) Kuwait (KSE) Qatar (DSM) UAE (DFM) S&P GCC Kuwait (KSE) (0.1) Bahrain (BAX) 4.7 S&P GCC 4.1 (0.6) UAE (DFM) 3.4 UAE (ADX) (1.7) KSA (TASI) (0.8) KSA (TASI) 20.9 15.2 (0.5) (0.7) UAE (ADX) Oman (MSM) Dow Jones Islamic (0.1) Oman (MSM) (1.4) (4.2) (14.3) Qatar (DSM)(22.1) (2.1) (2.5) (2.0) (1.5) (1.0) (0.5) 0.0 (30.0) (20.0) (10.0) 0.0 0.5 Source: Bloomberg 10.0 20.0 30.0 Global Most major global indices closed higher this week. In US, a slew of positive earnings by major companies like Caterpillar, 3M and General Motors aided the industrial sector, while tech stocks got a boost from strong earnings reported by Alphabet, Microsoft and Amazon. Macro-economic data was also favorable, with US GDP coming in much stronger than expected at 3% on an annualized basis in Q3-17. The Stoxx Europe 600 ended the weak higher, aided by technology and consumer shares. While strong macro-economic data supported the German DAX, political worries over Catalan independence continued to weigh on Spanish stocks. In Asia, Japan’s benchmark closed at a 21 year high, riding on back of the re-election of current government, which has favored a massive stimulus. GCC All the GCC indices closed in red this week. Saudi Arabia’s benchmark closed 1.4% lower, majorly weighed by the Telecom sector, which ended 8.2% down on the back of steep fall in Zain Saudi. The company’s stock fell 19.0% for the week after it announced a 38% capital reduction on Wednesday, alongside a SAR 6bn rights issue. Oman’s benchmark underperformed the Gulf indices, closing 2.1% lower, owing to weak performance in Services and Insurance stocks. Abu Dhabi’s benchmark closed 0.8% lower, majorly weighed by Real Estate and Banking stocks. Qatar QE index closed 0.5% lower this week, weighed by sell-off in Insurance. Transportation and Consumer Good stocks. Index major, Industries Qatar closed 1.0% higher on the back of better than expected performance in 9M-17. Bearish bets by non-Qatari individuals and domestic institutions were largely offset by strong buying from foreign institutions. In terms of volume, Banks and Financial services sector accounted for 49% of the total volume, while Industrials and Realty accounted for 32% of the total trades. Out of 45 companies traded, 11 advanced, 33 declined and 1 remained unchanged. Source: Bloomberg DSM INDEX 10,900 10,400 9,900 9,400 8,900 8,400 7,900 May-17 8,128.3 Jun-17 Index Jul-17 50 SMA 100 SMA Sep-17 200 SMA Oct-17 Indicator Price Last Close 8,128.3 MAVG 50 8,503.9 MAVG 100 8,903.2 MAVG 200 9,687.2 6 Month High 10,144.9 6 Month Low 8,110.2 RSI (14 Days) 35.3 Source: Bloomberg 2
3. WEEKLY WRAP October 29 , 2017 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 3.50 3.00 2.50 2.00 2.03 4.48 4.00 2.41 2.25 2.62 1.59 4.28 3.00 1.85 1.64 1.00 3.59 3.33 3.08 2.06 1.50 0.50 5.00 2.92 2.00 1.33 1.00 3.39 3.07 2.74 1.84 0.86 0.00 0.00 2 Yrs 5 Yrs 7 Yrs 10 Yrs Current 5 Yrs 7 Yrs Current Last Year Source: Bloomberg 10 Yrs 30 Yrs Last Year Source: Bloomberg CDS 5 Years CDS 2 Yrs 30 Yrs Qatar Govt. Int. Bonds Price (BPS) WTD Δ (BPS) MTD Δ (BPS) YTD Δ (BPS) Global US 28.3 0.0 0.0 (1.7) UK 25.8 (0.9) (0.1) (7.2) Maturity Price (USD) Z Spread (BPS) Yield (%) WTD Δ (USD) YTD Δ (USD) QGS 2018 100.0 50.9 QGIB 2019 106.4 31.9 1.90 NA (0.4) 1.92 (0.2) (3.7) QGIB 2020 105.9 Qatari Diar 2020 97.9 67.5 2.43 (0.2) (2.2) 99.5 2.93 (0.2) (0.2) Germany 13.3 (0.7) (1.2) (10.8) QGIB 2021 105.5 98.9 2.89 NA (1.9) France 22.5 (0.5) 0.2 (16.8) QGIB 2022 105.6 104.3 3.03 (0.3) (1.6) Italy 133.4 (5.4) (10.1) (29.0) QGS 2023 99.8 117.5 3.23 (0.4) (2.5) Greece 520.3 10.4 (5.8) (605.9) QGIB 2026 97.5 127.4 3.55 (0.6) 0.8 QGIB 2030 156.1 163.0 4.01 (1.2) 1.1 QGIB 2040 127.4 189.1 4.42 (1.4) 2.2 QGIB 2042 118.9 189.6 4.44 (1.6) 2.1 QGIB 2046 102.3 189.0 4.46 (1.9) 2.1 Russia 129.9 (1.3) (8.7) (104.1) Japan 34.7 (2.8) (4.7) 2.7 Turkey 191.7 17.3 7.2 (83.7) Brazil 175.6 3.7 (19.2) (107.7) Egypt 354.0 12.0 (8.5) (105.3) Abu Dhabi 64.0 1.1 1.1 (0.4) Bahrain 250.7 3.9 5.0 (61.8) Dubai 153.1 2.2 0.7 6.2 Qatar 104.3 0.3 5.2 19.0 Saudi Arabia 84.1 (1.3) (10.5) (4.3) Source: Bloomberg, QCB US Swap Rates GCC Tenor International Credit Spreads iTraxx Europe 51.7 (3.8) (5.6) (21.1) iTraxx Europe Crossover 233.5 (11.3) (21.4) (57.9) CDX North America IG 53.0 0.3 (3.0) (14.7) CDX North America HY 311.5 4.0 (12.8) (42.6) iTraxxSovX CEEMEA NA NA NA NA iTraxx Europe Senior Financial 17.7 (5.6) (6.3) (52.4) iTraxx Europe Sub Financial 19.1 (7.6) (11.9) (105.6) Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 1.378 0.013 0.380 6M LIBOR 1.564 0.010 0.247 12M LIBOR 1.843 0.012 0.157 2 years 1.822 0.006 0.365 5 years 2.117 0.021 0.140 10 years 2.380 0.019 0.042 30 years 2.625 0.032 0.030 Source: Bloomberg Commentary US Treasury yields rose this week amidst a slew of positive economic data, which included upbeat Q3-17 GDP numbers, healthy rise in durable goods orders and strong new home sales in Sep-17. Progress in Congress regarding tax reform legislation also contributed to rising yields. The yields however, saw a decline later during the week on reports that Donald Trump was favoring Fed Governor Jerome Powell as the central bank’s next Chairperson. Mr. Powell has been broadly seen as dovish, by the investment community. ECB’s relatively dovish stance at its meet saw the yields in the economic union tumble. Source: Bloomberg 3
4. WEEKLY WRAP October 29 , 2017 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 60.4 WTI Crude (USD/bbl) 53.9 Oil prices edged higher this week, with Brent breaching the USD 60 a barrel mark, on speculation that OPEC and other major producers will agree to extend their production-cut deal through the end of the next year. Saudi Arabia reiterated its commitment to support oil prices, while nervousness over tensions in Iraqi Kurdistan regions also aided gains in the commodity. Natural gas prices slumped as weather forecasts pointed towards less heating demand over the next two weeks. Gold prices ended lower on back of strength in USD. The losses were offset to some extent, as the metal gained on back of safe haven demand, following Catalonian Parliament’s declaration of independence. Natural Gas (USD/mmBTU) 3.0 Gold (USD/t oz.) 1,271.8 Silver (USD/t oz.) 16.8 Copper (USD/lb) 310.4 Source: Bloomberg Weekly Performance (%) YTD Performance (%) WTI Crude 4.7 Copper Brent 4.7 Gold Gold Brent (0.7) Silver Copper 4.8 WTI Crude (2.0) 0.3 Natural Gas (5.6) (8.0) 6.4 Silver (1.9) Natural Gas 23.9 10.4 (6.0) (4.0) (2.0) 0.0 2.0 4.0 (20.4) (30.0) 6.0 Source: Bloomberg (20.0) (10.0) 0.0 10.0 20.0 30.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.3158 USD/INR 64.5500 EUR/USD 1.1638 USD/CNY 6.6505 CAD/USD 0.7808 USD/TRY 3.7883 AUD/USD 0.7677 USD/EGP 17.6537 NZD/USD 0.6878 USD/ZAR 14.1034 113.6700 USD/RUB 58.0975 USD/JPY Commentary USD strengthened against its major peers, backed by stronger-than-expected Q3-17 US GDP data. Brighter outlook for tax cuts after Congress passed a budget blueprint also supported the greenback. EUR posted its biggest weekly loss of the year, weighed by a dovish stance adopted by ECB. The central bank now plans to extend its bond purchase program to Sep-18, albeit at a reduced pace. The common currency was further impacted after Catalan parliament declared independence from Spain following a secret ballot. ZAR was the worst performing currency, amidst the country’s worsening fiscal situation. Source: Bloomberg Weekly Performance (%) INR JPY EGP CNY GBP RUB NZD CAD EUR AUD TRY ZAR (4.0) Source: Bloomberg YTD Performance (%) EUR AUD GBP RUB CAD INR CNY JPY EGP NZD ZAR TRY 0.4 (0.1) (0.2) (0.4) (0.5) (1.0) (1.2) (1.4) (1.5) (1.8) (3.1) (3.3) (3.0) (2.0) (1.0) 0.0 1.0 10.4 6.5 6.4 5.9 4.9 4.7 4.6 2.9 2.5 (0.8) (2.6) (7.0) (10.0) (5.0) 0.0 5.0 10.0 15.0 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