GCC Market Weekly Wrap - 23 September

Transcription

1. WEEKLY WRAP September 23 , 2018 ECONOMIC UPDATE & NEWS 2.50% 2.70% 3.90% UK CPI MoM Aug 0.50% 0.70% 0.00% UK CPI YoY Aug 2.40% 2.70% 2.50% UK CPI Core YoY US MBA Mortgage Applications US Housing Starts US Initial Jobless Claims Russia Gold and Forex Reserve Japan France Aug 1.80% 2.10% 1.90% Sep-14th - 1.60% -1.80% Aug 1,240k 1,282k 1,174k Sep-15th 210k 201k 204k Sep-14th - 460.9b 459.4b Nikkei Japan PMI Mfg Sep P - 52.9 52.5 Markit Manufacturing PMI Sep P 53.3 52.5 53.5 Germany Markit Manufacturing PMI Sep P 55.7 53.7 55.9 Source: Bloomberg  3.00 2.90 2.80 2.70 Source: Bloomberg The US President imposed 10.0% tariffs on USD 200.0bn worth of Chinese imports and warned that if China retaliates, it will impose additional tariffs on USD 267.0bn of imports. (Source: Reuters) Expat remittances in the UAE climbed 8.8% YoY to AED 40.7bn (USD 12.1bn) in Q2-18, with India accounting for about 39% of the total remittances, data according to Central Bank of UAE. (Source: Trade Arabia)  The US Chamber of Commerce stated that the Trump administration could still avoid a major global trade war if it enters into a trilateral NAFTA deal and makes progress on the European trade issues soon. Total number of foreign investment licenses granted by Saudi Arabia increased 130% YoY in the Q1-18, according to Saudi Arabia's Ministry of Justice. (Source: Trade Arabia)  Saudi Arabia’s central bank governor, Ahmed al-Kholifey stated that the economy’s GDP can grow at 1.9% in 2018 as stated by the IMF, if all indicators remain unchanged. (Source: Reuters)  Oman’s GDP grew by 6.5% YoY during Q1-18 due to rise in total oil activities, as per the Supreme Council of Planning. The contribution of non-oil sector to GDP rose by 2.0%. (Source: Times of Oman)  Bahrain-origin export value rose by 57.9% YoY to BHD 229.0mn (USD 605.0mn) in July-18, according to the Information & eGovernment Authority. (Source: Trade Arabia)  Kuwait’s consumer price index increased by 0.9% YoY to a reading of 113.2 in August-18, due to a 1.4% YoY increase in cost of food & beverages, data according to Kuwait’s Central Statistical Bureau. (Source: Reuters)  Chicago Fed President stated that the central bank’s interest-rate hikes will start to drag on the US economic growth by 2019, as the level of borrowing costs turns “mildly restrictive”. (Source: Reuters)  UK’s Prime Minister, Theresa May warned her party members that if they spoiled her Brexit deal then the nation would leave the EU without any agreement. (Source: Reuters)  The Bank of Japan kept monetary policy steady by maintaining its short-term interest rate target at minus 0.1% and committing to guide 10-year government bond yields around 0.0% mark. (Source: Reuters)  Turkey is planning to cut down its growth forecasts to 3.8% and 2.3% for 2018 and 2019, respectively, from the previous forecast of 5.5%, due to currency crisis, according to Turkey’s Finance Minister. (Source: Reuters) (Source: Kuwait Times) QATAR NEWS  Qatar’s Industrial Production Index (IPI) increased by 2.2% MoM and 1.4% YoY to a reading 107.7 points in July-18, due to 2.4% MoM increase in the mining sector activity, led by an increase quantities of crude oil and natural gas. (Source: Peninsula Qatar)  Qatar and Tunisia witnessed a 200.0% increase in trade volume in H118 compared to the H2-17, according to Ambassador of the Republic of Tunisia to Qatar. (Source: Peninsula Qatar)  Sri Lankan Ambassador to Qatar, stated that the launch of ‘Sri Lanka Qatar Business Council’ is expected to boost the bilateral relations in terms of trade, investment, tourism and other activities. (Source: GCC NEWS   Fitch Solutions has forecasted the GCC’s average weighted real GDP to grow by 2.3% and 2.7% in 2018 and 2019, respectively, primarily driven by additional gains in oil prices. (Source: Gulf Times) The UAE federal authorities’ spending rose 17.0% YoY to AED 10.4bn (USD 2.8bn) during Q1-18, with public sector spending accounting for the largest proportion at 31.4%, according to Ministry of Finance. (Source: Trade Arabia)   3.06  GLOBAL NEWS  3.10 17-Sep Aug 10-Sep Industrial Production YoY 03-Sep Russia UST 10yr Yield 27-Aug 2.00% 20-Aug 2.00% 13-Aug 2.00% 06-Aug Aug F 30-Jul Prior 23-Jul Actual 16-Jul Survey 09-Jul Eurozone CPI YoY Period 02-Jul Event 25-Jun Region The UAE central bank has cut its forecast for economic growth to 2.3% in 2018 against the previous forecast of 2.7%, due to slight slowdown in the non-oil growth in Q2-18. (Source: Nasdaq) Peninsula Qatar)  Bangladesh Ambassador to Qatar stated that Qatari firms should consider Bangladesh as a key investment destination considering the huge investment opportunities due to rapid industrialization. (Source: Dubai’s consumer inflation remained flat at 0.2% in August-18, similar to that in August-17, while housing and utility costs fell 3.6% YoY, according to Dubai Statistics Centre. (Source: Gulf News)   Dubai’s non-oil foreign trade increased 0.8% YoY to AED 645.0bn (USD 175.5bn) in H1-18 supported by the re-exports, which grew 14.0% YoY to AED 203.0bn (USD 55.3bn). (Source: Trade Arabia) The government of Qatar has invested USD 100.0mn in Indonesia for the development of tourism industry, according to Qatar’s Ambassador to Indonesia. (Source: Tempo)   The President of UAE has approved additional funding to general federal budget of about AED 1.9bn (USD 536.0mn) for FY-18, with the help of state general reserves. (Source: Trade Arabia) President of Communications Regulatory Authority has stated that the launch of offices and branches of leading global ICT companies in Qatar indicates the confidence of foreign investors in the strength of the Qatari market and infrastructure. (Source: Peninsula Qatar) Qatar Tribune) 1
2. WEEKLY WRAP September 23 , 2018 EQUITY Index Price S&P 500 DJIA Nasdaq FTSE 100 DAX 30 CAC 40 WTD %Δ MTD %Δ YTD %Δ Index Price WTD %Δ MTD %Δ YTD %Δ 2,929.7 0.8 1.0 9.6 MSCI EM 1,051.4 2.2 (0.4) (9.2) 26,743.5 2.3 3.0 8.2 S&P GCC 1,768.4 (1.4) (0.6) 11.0 7,531.1 (0.2) (1.6) 17.7 Dow Jones Islamic 3,868.6 1.0 0.3 6.3 7,490.2 2.5 0.8 (2.6) KSA (TASI) 7,768.3 2.3 (2.3) 7.5 12,430.9 2.5 0.5 (3.8) UAE (DFM) 2,764.4 (1.6) (2.7) (18.0) 5,494.2 2.6 1.6 3.4 UAE (ADX) 4,883.4 (1.0) (2.1) 11.0 BIST 100 97,988.2 3.4 5.7 (15.0) Qatar (DSM) 9,766.3 (2.6) (1.2) 14.6 Nikkei 3.7 23,869.9 3.4 4.4 4.9 Kuwait (KSE) 5,147.7 0.2 0.3 Sh. Comp 2,797.5 4.3 2.7 (15.4) Bahrain (BAX) 1,340.1 (0.4) 0.1 0.6 Hang Seng 27,953.6 2.4 0.2 (6.6) Oman (MSM) 4,495.3 (1.4) 1.7 (11.8) Sensex 36,841.6 (3.3) (4.7) 8.2 Jordan (ASEGI) 1,995.2 0.1 0.5 (6.2) Source: Bloomberg GLOBAL INDICES Weekly Performance (%) YTD Performance (%) 4.3 Sh. Comp BIST 100 Nikkei CAC 40 FTSE 100 DAX 30 Hang Seng DJIA MSCI EM S&P 500 Nasdaq Sensex Nasdaq S&P 500 DJIA Sensex Nikkei CAC 40 FTSE 100 DAX 30 Hang Seng MSCI EM BIST 100 Sh. Comp 3.4 3.4 2.6 2.5 2.5 2.4 2.3 2.2 0.8 (0.2) (3.3) (5.0) 0.0 17.7 9.6 8.2 8.2 4.9 3.4 (2.6) (3.8) (6.6) (9.2) (15.0) (15.4) (25.0) 5.0 Source: Bloomberg (15.0) (5.0) 5.0 15.0 25.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) KSA (TASI) 2.3 Dow Jones Islamic Qatar (DSM) Kuwait (KSE) UAE (ADX) S&P GCC 7.5 Dow Jones Islamic (1.0) UAE (DFM) 11.0 KSA (TASI) (0.4) Oman (MSM) 11.0 UAE (ADX) 0.2 Bahrain (BAX) 14.6 S&P GCC 1.0 (1.4) Kuwait (KSE) (1.4) Bahrain (BAX) Oman (MSM) (1.6) 6.3 3.7 0.6 (11.8) UAE (DFM) (18.0) Qatar (DSM) (2.6) (3.0) (2.0) (1.0) 0.0 1.0 2.0 (27.0) (17.0) 3.0 Source: Bloomberg (7.0) 3.0 13.0 23.0 Commentary Global Most global equity markets inched higher last week, as investors anticipated that the recent round of tariffs imposed by the US on China, were not as harsh as expected. In the US, S&P 500 and Down Jones gained to settle at record high levels, while Nasdaq underperformed, amid weakness in Technology shares. Financial stocks remained the notable gainers as treasury yields advanced. The Stoxx Europe 600 index climbed 1.7%, to continue its upward trend. Financial, Mining and Oil shares advanced, supporting the broad market benchmark. The Japanese benchmark jumped 3.4%, in a holiday shortened week. The Chinese benchmark rallied 4.3%, after the government announced to support consumer spending in the nation. Healthy buying activity from state-controlled funds also supported the benchmark. GCC Most GCC equity markets ended lower last week. The Saudi Arabian benchmark grew 2.3%, driven by gains in oil prices. SABIC climbed 4.1%, after announcing that it would merge its material business with Switzerland-based Clariant and would take additional steps to strengthen their partnership. In Dubai, Drake & Scull International declined 2.5%, despite the company’s major shareholder, Tabarak Investment committed to restore the company’s financial health. The Kuwaiti benchmark climbed 0.2%, ahead of its entry in FTSE Russell emerging market during this week. Qatar The QE index dropped 2.6%, underperforming its peer indices. Increased selling pressure on the part of the domestic institutional and retail investors led to the overall decline in the benchmark. Total trading turnover and volume increased with Banking, Real Estate and Industrial sector together accounting for about 71.0% of the total trading volume. Out of the total 45 listed shares, 44 exchanged hands, 31 declined, 13 advanced and 1 remained unchanged. Source: Bloomberg DSM INDEX 9,766.3 10,500 9,500 8,500 7,500 Mar-18 May-18 Index Jun-18 50 SMA 100 SMA Aug-18 200 SMA Sep-18 Indicator Price Last Close 9,766.3 MAVG 50 9,694.5 MAVG 100 9,360.1 MAVG 200 9,056.9 6 Month High 10,022.0 6 Month Low 8,553.1 RSI (14 Days) 48.2 Source: Bloomberg 2
3. WEEKLY WRAP September 23 , 2018 RATES & CREDIT US Treasury (%) 3.50 3.00 2.80 Qatar Treasury (%) 3.06 2.95 2.89 3.20 4.00 2.78 2.00 2.25 1.50 3.12 4.19 3.72 3.45 4.28 3.00 1.86 1.43 4.93 5.00 2.50 1.00 6.00 3.59 2.88 2.00 1.58 1.00 0.50 2.02 2.35 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 25.7 0.7 0.7 (1.6) Maturity Price (USD) Z Spread (BPS) Yield (%) WTD Δ (USD) YTD Δ (USD) QGIB 2019 102.0 16.8 2.56 (0.1) (3.3) QGIB 2020 102.7 24.5 3.00 (0.1) (2.5) QGIB 2021 97.3 39.9 3.36 (0.1) (1.0) Qatari Diar 2020 102.8 45.7 3.35 0.0 (2.2) QGIB 2022 103.1 45.3 3.44 (0.1) (2.5) (0.3) UK 29.5 1.3 (1.1) 9.0 Germany 12.0 0.1 (0.1) 0.6 France 27.0 0.7 (0.1) 7.8 QGS 2023 98.8 48.2 3.49 (0.1) Italy 225.7 (8.6) (23.6) 104.9 QGIB 2023 100.7 64.5 3.68 (0.2) NA Greece 400.0 0.1 (25.8) (27.6) QGIB 2026 95.5 84.1 3.91 (0.1) (2.2) Russia 159.1 (6.6) (10.3) 29.2 QGIB 2028 102.5 106.7 4.17 (0.3) NA QGIB 2030 148.7 125.7 4.36 (0.3) (7.1) QGIB 2040 121.6 161.5 4.75 (0.4) (6.8) QGIB 2042 114.0 160.0 4.73 (0.4) (6.5) QGIB 2046 99.6 150.9 4.64 (0.5) (4.4) QGIB 2048 102.8 178.2 4.91 (0.3) NA Japan 25.5 1.7 (0.3) (1.8) Turkey 403.5 (49.9) (159.7) 236.6 Brazil 268.3 (19.1) (36.6) 104.4 Egypt 389.9 22.6 22.6 60.7 Source: Bloomberg, QCB GCC Abu Dhabi 66.0 2.9 0.1 1.4 US Swap Rates Bahrain 357.0 (18.0) (13.9) 69.7 Tenor Dubai 132.4 9.2 5.1 3.2 Qatar 80.4 (0.6) (3.4) (23.0) Saudi Arabia 79.4 (0.7) (3.1) (14.6) International Credit Spreads iTraxx Europe 68.2 8.3 (0.0) 23.5 Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 2.366 0.029 0.672 6M LIBOR 2.585 0.016 0.748 12M LIBOR 2.897 0.016 0.790 2 years 2.979 0.021 0.900 5 years 3.073 0.045 0.829 10 years 3.125 0.061 0.725 30 years 3.134 0.066 0.590 iTraxx Europe Crossover 264.9 (16.0) (34.4) 32.6 Source: Bloomberg CDX North America IG 61.6 5.8 1.5 12.4 Commentary CDX North America HY 315.8 (1.7) (14.5) 8.3 iTraxx Europe Senior Financial 14.5 (1.7) (15.7) 0.9 iTraxx Europe Sub Financial 22.4 (5.2) (27.8) 7.2 The US 10-year bond yields increased last week, to settle at the highest level seen in last four months. The yields advanced after the US and China imposed tariffs on each other’s imports. The UK 10-year gilt yields pared its gains, amid EU leaders rejected the British Prime Ministers’ Brexit plan. The yields also found support, after the UK’s inflation data came higher than expectations. The Italian bond yields climbed, amid increased uncertainty surrounding the outcome of the nation’s fiscal budget. Source: Bloomberg 3
4. WEEKLY WRAP September 23 , 2018 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 78.8 WTI Crude (USD/bbl) 70.8 Brent and WTI crude oil prices inched higher last week, however, gains remained limited amid expectations that the OPEC may decide to increase its output in its meeting over the weekend. Oil prices found additional support after the US crude oil inventories continued to decline for the fifth straight week. Natural gas prices advanced to settle at the psychological USD 3.0 mark, amid colder than expected weather forecast in the US for the next two weeks. Gold prices remained broadly unchanged, as investors anticipated that the fresh round of tariffs were less harsh than expected. Copper prices advanced, as easing trade tensions, increased the demand for the commodity. Natural Gas (USD/mmBTU) 3.0 Gold (USD/t oz.) 1,196.6 Silver (USD/t oz.) 14.3 Copper (USD/lb) 283.7 Source: Bloomberg Weekly Performance (%) YTD Performance (%) Copper Brent 8.0 Natural Gas WTI Crude Copper 0.9 Gold 0.8 Gold 1.6 Brent 17.1 Natural Gas 2.6 Silver 17.8 WTI Crude 7.6 (8.6) (14.1) Silver (16.8) 0.0 0.0 2.0 4.0 6.0 8.0 10.0 (20.0) Source: Bloomberg (10.0) 0.0 10.0 20.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.3102 USD/INR 71.7038 EUR/USD 1.1779 USD/CNY 6.8571 CAD/USD 0.7743 USD/TRY 6.2907 AUD/USD 0.7290 USD/EGP 17.9120 0.6687 USD/ZAR 14.3212 112.5900 USD/RUB 66.4552 NZD/USD USD/JPY Commentary The USD inched lower against a basket of major currencies, with the dollar index settling 0.7% lower at 94.22. Easing trade tensions between the major global economies led to the increase in the riskier currencies. The GBP closed flat against the USD, as gains following the release of higher than expected British inflation data were offset by losses following the uncertainties surrounding the Brexit deal. The CAD strengthened against the USD, after encouraging domestic data cemented expectations of a rate hike by the Bank of Canada in the near future. The TRY declined, after the nation’s Finance Minister trimmed the domestic growth forecast. Source: Bloomberg Weekly Performance (%) ZAR RUB NZD AUD EUR CAD CNY GBP EGP INR JPY TRY (3.0) Source: Bloomberg YTD Performance (%) 4.3 2.5 2.1 1.9 1.1 1.0 0.2 0.0 (0.2) (0.5) (1.9) (2.0) (1.0) 0.0 1.0 2.0 3.0 4.0 5.0 JPY EGP EUR CAD GBP CNY NZD AUD INR RUB ZAR TRY 0.1 (0.9) (2.1) (2.7) (3.3) (5.0) (5.8) (6.6) (11.6) (13.2) (13.2) (39.5) (45.0) (40.0) (35.0) (30.0) (25.0) (20.0) (15.0) (10.0) (5.0) 0.0 5.0 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