GCC Daily Market Update - 31 January

Transcription

1. January 31 , 2021 ECONOMIC UPDATE & NEWS Dec -- 7.0k 38.1k Conf. Board Consumer Jan 89 89.3 87.1 US Durable Goods Orders US FOMC Rate Decision Italy Manufacturing Confidence Dec P 1.00% 0.20% 1.20% Jan-27th 0.25% 0.25% 0.25% Jan 95.8 95.1 96 0.90 0.80 Gold and Forex Reserve Jan-22 -- 592.7b 590.4b US Initial Jobless Claims Jan-23rd 875k 847k 914k US GDP Annualized QoQ 4Q A 4.20% 4.00% 33.40% Japan Jobless Rate Dec 3.00% 2.90% 2.90% Japan Industrial Production MoM Dec P (1.50%) (1.60%) (0.50%) US U. of Mich. Sentiment Jan F 79.4 79 79.2 Source: Bloomberg GLOBAL NEWS  1.00 nd Russia As per the United Nations, the world economy is expected to recover by 4.7% in 2021. The developed and developing economies are projected to rise by 4.0% and 5.7% in 2021, respectively. (Source: Reuters) 1.07 1.10 0.70 25-Jan Jobless Claims Change US 18-Jan UK UST 10yr Yield 11-Jan 92.2 04-Jan 90.1 28-Dec 91.4 21-Dec Jan 14-Dec Germany IFO Business Climate 07-Dec Prior 30-Nov Actual 23-Nov Survey 16-Nov Period 09-Nov Event 02-Nov Region Source: Bloomberg  The UAE’s Vice President has announced that the nation has adopted measures to grant citizenship to investors and other professionals including scientists, doctors and their families. (Source: Reuters)  The UK has banned all the airway routes to and from the UAE in order to curb the spread of COVID-19 variant. (Source: Al Jalzeera)  The IMF projects global economic growth to decline to 3.5% in 2020 compared to earlier projection of 4.4%, due to vaccine progression. In 2021, growth is expected to rise by 0.3% points to 5.5%. (Source: Reuters)  The Saudi Ministry of Interior has postponed the lifting of travel suspension for its citizens and opening all land, sea and air outlets to 17th May-21 instead of 31st March-21. (Source: Emirates News Agency)  According to S&P Global, the global debt levels are projected to decline by 3.0% YoY to USD 8.0tn. (Source: Reuters)   As per the US Commerce Department, the nation’s GDP expanded by 4.0% in Q4-20 due to rise in personal consumption by 2.5%. (Source: The President of Riyadh’s Royal Commission has announced that the nation would invest USD 220.0bn in order to develop Riyadh, Saudi Arabia by next decade. (Source: Reuters)  Saudi Arabia’s Crown Prince said that the nation’s Public Investment Fund (PIF) aims to double its assets to USD 1.1tn by 2025 and boost the domestic economy by infusing USD 40.0bn annually. (Source: Reuters)  The Governor of Saudi Arabia's PIF said that the fund will invest USD 266.6bn in the next 5 years in the local economy. The investment is expected to create 1.8mn jobs by 2025 end. (Source: Trade Arabia)  The IMF projects Saudi Arabia’s economy to grow by 2.6% in 2021 from a 3.9% contraction in 2020 on account of approval of multiple vaccine and the launch of vaccinations in some nations. (Source: Reuters)  Saudi Arabia sold a dual-tranche benchmark USD-denominated bond worth USD 5.5bn with maturity of 12 years and 40 years. (Source: Zawya)  As per the United Nations Conference on Trade and Development, FDI to Saudi Arabia rose by 4.0% YoY to USD 4.7bn in 2020. (Source: Argaam)  According to Oman News, the nation would keep its land borders closed for one more week till 6 pm of 1st February-21 in order to curb the spread of coronavirus. (Source: Trade Arabia)  According to Fitch Ratings, Bahrain might require additional financial support from GCC region post 2023. (Source: Reuters)  Kuwaiti Finance Ministry released budget for FY 2021-22 which includes government spending to rise by 6.9% YoY to USD 76.1bn. Expected crude production to average 2.4mn bpd. (Source: S&P Global) Bloomberg Quint)    The US Federal Reserve Chair has shown concerns about the highly uncertain global economic outlook and said that the nation’s real unemployment rate is around 10.0%. (Source: RTE) The White House Press Secretary has announced that the Biden administration would review all national security measures including the US-China Phase 1 trade deal. (Source: Reuters) IMF’s chief economist said that the US President’s proposed economic stimulus package worth USD 1.9tn could increase the US economic output by 5.0% in the upcoming three years. (Source: Business Today)  The US Fed kept interest rates and its speed of bond buying constant following the close of its first meeting of 2021. (Source: WSJ)  German government has cut its growth forecast for the nation’s economy to 3.0% in 2021, from previous forecast of 4.4%, due to second coronavirus lockdown. (Source: Nasdaq)  The Finance Minister of Germany expects the nation’s new debt to reach EUR 60.0bn (USD 73.0bn) in 2022. (Source: Reuters)  As per the Turkish Statistical Institute, the nation’s trade deficit rose by 69.1% YoY to USD 49.9bn in 2020 due to fall in exports by 6.3% YoY and rise in imports by 4.3% YoY. (Source: NASDAQ)  The Turkish Central Bank Governor has said to tighten the policy in order to achieve 9.4% inflation rate target by 2021 end. (Source: Reuters)  As per the IMF, Turkey’s economy is expected to grow by 6.0% in 2021. The inflation is projected to be at modest levels, while the current account deficit is expected to fall to 3.5% of GDP. (Source: Hurriyet Daily) GCC NEWS  The UAE’s Vice President said that the nation’s cabinet has given approval to a public debt strategy for developing the nation’s market for local currency bonds. (Source: Reuters) QATAR NEWS  As per Qatar Chamber, the nation has achieved the highest credit ratings globally on account of great resilience and efficiency during the COVID-19 pandemic in 2020. (Source: Qatar Tribune)  Qatar’s merchandise trade surplus rose by 5.2% MoM and 39.8% YoY to QAR 8.6bn (USD 2.3bn) in December-20, as per PSA. (Source: Gulf Times)  As per the Indian ambassador in Qatar, Dr. Deepak Mittal, has announced that the bilateral trade between the two nations had reached USD 7.0bn from April-20 to November-20. (Source: Gulf Times) 1
2. January 31 , 2021 EQUITY Index Price S&P 500 WTD %Δ MTD %Δ YTD %Δ Index Price WTD %Δ 3,714.2 (3.3) (1.1) (1.1) MSCI EM DJIA 29,982.6 (3.3) (2.0) (2.0) MSCI GCC Nasdaq 12,925.4 (3.3) 0.3 0.3 FTSE 100 MTD %Δ YTD %Δ 1,329.6 (4.5) 3.0 3.0 564.4 (0.7) 2.8 2.8 Dow Jones Islamic 5,449.8 (3.4) 0.0 0.0 1.4 6,407.5 (4.3) (0.8) (0.8) KSA (TASI) 8,807.0 (0.8) 1.4 DAX 30 13,432.9 (3.2) (2.1) (2.1) UAE (DFM) 2,697.2 (1.4) 8.2 8.2 CAC 40 5,399.2 (2.9) (2.7) (2.7) UAE (ADX) 5,641.8 0.5 11.8 11.8 BIST 100 1,473.5 (4.5) (0.2) (0.2) Qatar (DSM) 10,544.5 (1.8) 1.0 1.0 Nikkei 27,663.4 (3.4) 0.8 0.8 Kuwait (KSE) 5,747.9 1.1 3.6 3.6 Sh. Comp 3,483.1 (3.4) 0.3 0.3 Bahrain (BAX) 1,457.3 0.3 (2.2) (2.2) Hang Seng 28,283.7 (4.0) 3.9 3.9 Oman (MSM) 3,649.1 (2.6) (0.3) (0.3) Sensex 46,285.8 (5.3) (3.1) (3.1) Jordan (ASEGI) 1,718.0 0.6 3.7 3.7 Source: Bloomberg GLOBAL INDICES Weekly Performance (%) CAC 40 DAX 30 DJIA Nasdaq S&P 500 Nikkei Sh. Comp Hang Seng FTSE 100 BIST 100 MSCI EM Sensex YTD Performance (%) (2.9) (3.2) (3.3) (3.3) (3.3) (3.4) (3.4) (4.0) (4.3) (4.5) (4.5) Hang Seng MSCI EM Nikkei Sh. Comp Nasdaq BIST 100 FTSE 100 S&P 500 DJIA DAX 30 CAC 40 Sensex (5.3) (6.0) (4.0) (2.0) 0.0 3.9 3.0 0.8 0.3 0.3 (0.2) (0.8) (1.1) (2.0) (2.1) (2.7) (3.1) (4.0) Source: Bloomberg (2.0) 0.0 2.0 4.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) Kuwait (KSE) UAE (ADX) 1.1 UAE (ADX) Bahrain (BAX) KSA (TASI) (0.8) (1.4) Qatar (DSM) 2.8 KSA (TASI) 1.4 Qatar (DSM) 1.0 Dow Jones Islamic (1.8) Oman (MSM) 3.6 MSCI GCC (0.7) UAE (DFM) 8.2 Kuwait (KSE) 0.3 MSCI GCC 11.8 UAE (DFM) 0.5 0.0 Oman (MSM) (2.6) Dow Jones Islamic (3.4) (0.3) Bahrain (BAX) (2.2) (4.0) (3.0) (2.0) (1.0) 0.0 1.0 2.0 Source: Bloomberg (5.0) 0.0 5.0 10.0 15.0 Commentary Global The US equity markets ended on a negative note in the previous week amid higher volatility and traded volumes, partly due to a busy earnings week. Further, hedge funds selling their long position also impacted the markets. The S&P 500 index ended lower by 3.3% amid losses in Energy and Material stocks. The European markets ended lower, due to concerns over economic recovery caused by surging COVID-19 cases and delay in the distribution of vaccines domestically. The Stoxx Europe 600 index ended the week 3.1% lower at 395.9. In Asia, the Nikkei index ended lower, after the Japanese government approved a third supplementary budget worth JPY 19.0tn (USD 185.0bn) to curb the third wave of COVID-19. GCC GCC indices ended on a negative note in the previous week. The Saudi Arabian index decreased by 0.8% driven by losses in Utilities and Financial stocks. Dubai’s benchmark ended 1.4% lower last week, as decrease in Real Estate & Construction and Transportation stocks weighed on the index. Emirates NBD increased by 1.7% in the week after posting better than expected annual net profit. Abu Dhabi benchmark increased by 0.5%. First Abu Dhabi Bank increased by 0.5% in the week despite reporting a decrease in net profit for 2020. Qatar The QE index decreased 1.8% in the previous week. Losses in Real Estate and Transportation stocks weighed on the index. The Commercial Bank decreased by 3.0% after announcing its plan to raise USD 1.0bn through bond issues. Selling pressure on part of domestic and foreign retail investors weighed on the index. Trade turnover and volume decreased with Banking & Financial Services, Industrial and Real Estate sectors together accounting for about 66.8% of the total traded volume. Out of the total 48 traded stocks, 47 exchanged hands, 37 declined, 9 advanced and 1 remained unchanged. Source: Bloomberg DSM INDEX 10,544.5 10,500 9,500 8,500 Aug-20 Sep-20 Index Nov-20 50 SMA 100 SMA Dec-20 200 SMA Indicator Price Last Close 10,544.5 MAVG 50 10,548.8 MAVG 100 10,243.5 MAVG 200 9,724.4 6 Month High 10,913.8 6 Month Low 9,523.6 RSI (14 Days) 25.9 Source: Bloomberg 2
3. January 31 , 2021 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 2.00 3.00 2.00 1.32 1.50 1.51 1.31 1.30 1.83 2 Yrs 3 Yrs Current 0.50 0.42 0.00 5 Yrs 10 Yrs Last Year 1.82 0.97 0.44 2 Yrs 30 Yrs Source: Bloomberg 0.52 3 Yrs Current 5 Yrs 10 Yrs Last Year 30 Yrs Source: Bloomberg Qatar Govt. Int. Bonds CDS 5 Years CDS 2.98 1.00 0.50 0.17 1.93 2.15 2.04 1.50 1.07 0.11 2.51 2.50 2.00 1.00 0.00 3.32 3.50 2.50 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) QGIB 2021 100.6 34.4 0.27 (0.1) (0.3) QGIB 2022 104.1 12.7 0.13 (0.1) (0.3) US 14.1 (1.5) (2.6) (2.6) QGS 2023 105.4 30.7 0.40 (0.0) (0.0) UK 18.9 (1.1) (0.8) (0.8) QGIB 2023 107.4 31.2 0.44 (0.0) (0.2) Germany 12.8 0.5 0.4 0.4 QGIB 2024 108.3 40.9 0.62 0.0 (0.2) QGIB 2025 110.1 54.4 0.91 (0.0) (0.4) QGIB 2026 110.9 57.8 1.10 (0.1) (0.5) France 18.3 0.2 0.2 0.2 Italy 100.6 (8.3) 0.6 0.6 QGIB 2028 120.2 74.7 1.51 (0.2) (1.1) Greece 98.0 (1.8) (5.9) (5.9) QGIB 2029 117.5 78.9 1.66 (0.2) (1.3) 9.2 QGIB 2030 168.4 84.1 1.73 (0.4) (2.4) QGIB 2030 116.5 80.1 1.78 (0.2) (1.4) QGIB 2040 154.6 132.1 2.68 (0.3) (3.1) Russia 97.2 (0.8) 9.2 Japan 17.8 (0.5) (0.5) (0.5) Turkey 313.3 (19.2) 2.9 2.9 QGIB 2042 146.9 136.0 2.77 (0.2) (3.1) Brazil 175.7 0.2 30.2 30.2 QGIB 2046 130.0 145.0 2.93 (0.6) (3.0) QGIB 2048 138.0 154.9 3.03 (0.8) (2.9) QGIB 2049 134.2 150.5 3.00 (1.0) (2.5) QGIB 2050 127.8 145.5 2.96 (0.9) (2.9) Egypt 352.8 20.7 0.8 0.8 GCC Abu Dhabi 46.0 (0.8) 6.3 6.3 Source: Bloomberg, QCB Bahrain 261.3 10.7 7.7 7.7 US Swap Rates Dubai 122.2 (1.1) 2.1 2.1 Tenor Qatar 46.1 (0.7) 6.0 6.0 Saudi Arabia 69.8 (1.8) 1.9 1.9 International Credit Spreads iTraxx Europe iTraxx Europe Crossover 52.1 269.2 3.3 15.8 4.3 28.2 4.3 28.2 Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 0.205 (0.010) (0.033) 6M LIBOR 0.220 (0.016) (0.038) 12M LIBOR 0.311 (0.002) (0.031) 2 years 0.186 (0.014) (0.014) 5 years 0.520 (0.007) 0.086 10 years 1.109 (0.003) 0.180 30 years 1.589 (0.016) 0.187 CDX North America IG 56.0 4.9 5.7 5.7 Source: Bloomberg CDX North America HY 318.3 13.6 25.1 25.1 Commentary iTraxx Europe Senior Financial 11.2 1.8 4.3 4.3 iTraxx Europe Sub Financial 94.9 2.8 6.3 6.3 Source: Bloomberg The US 10-year bond yield decreased in the past week, as concerns over surging global COVID-19 cases, slow vaccine rollouts and uncertainty regarding the US fiscal stimulus weighed on the yield. The German 10-year bund yield decreased in the past week, as German business morale declined in January-21 due to surging COVID-19 cases. . 3
4. January 31 , 2021 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 55.0 WTI Crude (USD/bbl) 52.2 Brent oil prices closed higher in the last week, before Saudi Arabia begins its pledge to cut output in February and March-21. WTI prices closed lower last week, as there is uncertainty over demand due to surging COVID-19 cases globally. Further, concerns over global vaccine rollout weighed on the price of the commodity. Natural gas prices increased in the last week, as extremely cold temperatures in Northern US fueled demand for the commodity. Gold prices decreased in the last week, as investors awaited developments around the US fiscal stimulus. Silver prices increased in the past week on the back of retail investor sentiment. Copper prices decreased in the past week due to the resiliency of the US dollar which pressured the price of base metals. Natural Gas (USD/mmBTU) 2.6 Gold (USD/t oz.) 1,847.3 Silver (USD/t oz.) 26.9 Copper (USD/lb) 355.6 Source: Bloomberg Weekly Performance (%) YTD Performance (%) Silver WTI Crude 5.3 Natural Gas Brent Gold 1.1 Natural Gas (0.5) 1.0 Gold (1.9) (4.0) (2.0) 1.9 Copper (0.1) Copper 6.3 Silver 0.8 WTI Crude 7.6 Brent 4.8 0.0 2.0 4.0 6.0 (2.5) (4.0) Source: Bloomberg (2.0) 0.0 2.0 4.0 6.0 8.0 10.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.3738 USD/INR 72.4538 EUR/USD 1.2166 USD/CNY 6.4283 CAD/USD 0.7827 USD/TRY 7.3075 AUD/USD 0.7644 USD/EGP 15.7113 NZD/USD 0.7193 USD/ZAR 15.1609 104.6800 USD/RUB 75.8779 USD/JPY Commentary The USD increased against the basket of major currencies in the last week, with the dollar index settling higher by 0.4% at 90.6. The dollar strengthened due to a change in investor risk sentiment on the back of globally increasing COVID-19 cases and slow vaccine rollouts. The EUR decreased, despite Germany, France and Spain reporting a better than expected GDP for Q4-20 indicating a future economic recovery. The GBP increased, ahead of Bank of England’s decision next week on benchmark rates and the possibility of negative interest rates. Positive data on UK’s unemployment and wages for November-20 also supported the currency. The CAD decreased, despite data showing faster than expected growth in the economy. A fall in WTI crude oil prices also impacted the currency. Source: Bloomberg Weekly Performance (%) TRY CNY GBP INR NZD EGP ZAR EUR CAD RUB JPY AUD (1.5) Source: Bloomberg YTD Performance (%) TRY CNY GBP INR EGP NZD CAD AUD EUR JPY RUB ZAR 1.4 0.8 0.2 0.1 0.1 (0.1) (0.3) (0.3) (0.8) (0.9) (0.9) (1.0) (0.5) 0.0 0.5 1.0 1.5 2.0 1.6 1.5 0.3 0.2 0.2 0.1 (0.3) (0.6) (0.7) (1.3) (2.4) (3.1) (4.0) (3.0) (2.0) (1.0) 0.0 1.0 2.0 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