GCC Weekly Wrap - 28 January

Transcription

1. WEEKLY WRAP January 28 , 2018 ECONOMIC UPDATE & NEWS Period Survey Actual Prior Germany ZEW Survey Curr. Situation Jan 89.6 95.2 89.3 Germany ZEW Survey Expectations Jan 17.7 20.4 17.4 2.70 Jan P 58.6 58.1 58.8 2.60 2.50 Dec - 8.6k 12.2k Jan 117.0 117.6 117.2 Eurozone ECB Main Refinancing Rate Jan-25th 0.00% 0.00% 0.00% Russia Gold and Forex Reserve Jan-19th - 442.8b 437.9b US Initial Jobless Claims Jan-20 235k 233k 216k 2.20 UK GDP QoQ 4Q A 0.40% 0.50% 0.40% 2.10 UK GDP YoY 4Q A 1.40% 1.50% 1.70% Canada CPI YoY Dec 1.90% 1.90% 2.10% US GDP Annualized QoQ 4Q A 3.00% 2.60% 3.20% Source: Bloomberg 2.40 22-Jan 15-Jan 08-Jan 01-Jan 25-Dec 18-Dec 30-Oct 2.30 11-Dec Jobless Claims Change Germany IFO Business Climate 04-Dec UK 2.61 27-Nov Markit France Manuf. PMI 20-Nov France UST 10yr Bond 13-Nov Event 06-Nov Region Source: Bloomberg settlement from corruption convicts (which includes several princes and billionaires), as per a senior government official. (Source: Trade Arabia) GLOBAL NEWS  IMF revised its forecast for world economic growth up by 0.2 percentage points to 3.9% each in 2018 and 2019, on the back of positive revisions in US and China. (Source: Reuters)  Saudi Arabia based Capital Market Authority has given approval to US based Citigroup to introduce its investment banking business in the country, the bank’s CEO stated. (Source: Arabian Business)  OPEC and participating non-OPEC countries have achieved a record conformity level of 129.0% during 2017 in stated production curbs. (Source: Trade Arabia)  Saudi Arabia has unveiled plans to build 9 desalination plants on the Red Sea coast with a total investments of SAR 2.0bn. (Source: Trade Arabia)  The IMF expects US to grow by 2.7% in 2018, which is much higher than the 2.3% the Fund forecasted in Oct-17. The revision comes amidst temporary spending incentives brought about by the tax cuts.  Bahrain based National Oil and Gas Authority is planning a new 350,000 bpd pipeline between Bahrain and Saudi Arabia that would replace the existing 230,000 bpd link, Bahrain’s Oil Minister stated. (Source: Reuters)  The IMF revised Euro Area’s growth forecast by 0.3 percentage points in 2018 and 2019, amidst strong momentum witnessed in Germany, Italy and the Netherlands. (Source: Reuters)  UK’s unemployment rate remained steady at 4.3% in 3 months ending Nov-17. (Source: Market Insider)  The Japanese government raised its estimates of the economy in Jan18 for the first time in seven months, supported by rising consumer spending. (Source: Reuters)  Japan’s total trade surplus decreased by 43.5% YoY to JPY 358.97bn in Dec-17, as imports increased 14.9% while exports increased by 9.3% YoY. (Source: Customs)  Bank of Japan has kept its monetary policy unchanged and retained its inflation growth forecast. (Source: Market Insider)  IMF revised China’s growth rate higher by 0.1 percentage point over its Fall forecast to 6.6% in 2018 and 6.4% in 2019. The revision was attributed to stronger external demand. (Source: IMF) GCC NEWS  (Source: Trade Arabia)  Kuwait is assessing plans to sell dollar-denominated bonds, which is likely to be in line with or higher than Kuwait’s last issuance of USD 8.0bn in Mar-17. (Source: Gulf Times)  Kuwait’s total trade surplus with Japan almost doubled over the year to JPY 55.0bn (USD 501mn) in Dec-17. (Source: KUNA)  Omani banks reported a 7.3% YoY increase in credit lent, which stands at OMR 23.5bn as on Nov-17. (Source: Gulf Base) QATAR NEWS  Capital Intelligence has affirmed Qatar’s long-term ratings of ‘AA-’ and short-term ratings of ‘A1+’. (Source: Gulf Times)  Qatar’s e-commerce market is expected to grow 1.7x to USD 3.2bn in 2020, according to the Ministry of Transport and Communications. (Source: Gulf Times)  US and European oil majors are piling in with offers to help Qatar develop new gas projects, the country’s energy minister said. The offers come, despite pressure on firms to chose between Qatar and its neighbors. (Source: Gulf Times)  Qatar Chambers and Kuwait Chambers have established a forum to discuss ways to enhance trade relations, review mutual investment opportunities and build alliances and JV’s between the two countries’ businesses. (Source: Qatar Tribune)  Total deposits of the Qatari banking sector increased by 13.2% YoY and 2.6% MoM to QAR 823.0bn in Dec-17. (Source: Mubasher)  Qatar Navigation has acquired its largest ever container vessel called Majd, which has a capacity of 3,768 TEU. (Source: Trade Arabia)  Doha Bank’s exchange traded fund is expected to be launched by Feb18, the bank’s CEO stated. (Source: Gulf Times)  QNB has completed its AUD 700mn worth of inaugral Kangaroo bond issuance as part of diversification of its funding sources. (Source: Gulf UAE was removed from the European Union’s new tax haven blacklist. (Source: Arabian Business)  Demand for business loans in UAE, as quantified with net balance measure, rose to 7.3 points in Q4-17 as compared to 6.3 points increase in Q3-17. (Source: Central Bank)  Dubai Financial Services Authority (DFSA) and the Central Bank of Bahrain (CBB) signed a MOU, providing a formal basis for supervisory cooperation and mutual support between them. (Source: Trade Arabia)  According to S&P estimates, the emirates of Sharjah and Ras Al Khaimah (RAK) are expected to see a boost in their economy, driven by an increase construction, real estate, tourism and manufacturing sectors. (Source: Khaleej Times)  Times) Saudi authorities are expected to recover more than USD 100bn in 1
2. WEEKLY WRAP January 28 , 2018 EQUITY Index Price S&P 500 DJIA WTD %Δ MTD %Δ YTD %Δ COMMENTARY Index Price WTD %Δ MTD %Δ YTD %Δ 2,872.9 2.2 7.5 7.5 MSCI EM 1,273.1 3.3 9.9 9.9 26,616.7 2.1 7.7 7.7 S&P GCC 1,707.5 0.7 7.2 7.2 Nasdaq 7,023.0 2.8 9.8 9.8 Dow Jones Islamic 3,898.3 1.9 7.1 7.1 FTSE 100 7,665.5 (0.8) (0.3) (0.3) KSA (TASI) 7,521.6 (0.2) 4.1 4.1 DAX 30 13,340.2 (0.7) 3.3 3.3 UAE (DFM) 3,468.7 (1.8) 2.9 2.9 CAC 40 5,529.2 0.0 4.1 4.1 UAE (ADX) 4,643.5 0.4 5.6 5.6 120,701.9 4.8 4.7 4.7 Qatar (DSM) 9,459.6 2.8 11.0 11.0 3.8 BIST 100 Nikkei 23,631.9 (0.7) 3.8 3.8 Kuwait (KSE) 6,651.9 0.2 3.8 Sh. Comp 3,558.1 2.0 7.6 7.6 Bahrain (BAX) 1,341.8 0.6 0.8 0.8 Hang Seng 33,154.1 2.8 10.8 10.8 Oman (MSM) 5,007.8 (0.3) (1.8) (1.8) Sensex 36,050.4 1.5 5.9 5.9 Jordan (ASEGI) 2,190.2 2.0 3.0 3.0 Source: Bloomberg GLOBAL INDICES Weekly Performance (%) YTD Performance (%) 4.8 BIST 100 MSCI EM Hang Seng Nasdaq S&P 500 DJIA Sh. Comp Jordan (ASEGI) Sensex CAC 40 DAX 30 Nikkei FTSE 100 0.0 (0.7) (0.7) (0.8) (2.0) 0.0 2.0 4.0 10.8 9.9 9.8 Hang Seng MSCI EM Nasdaq DJIA Sh. Comp S&P 500 Sensex BIST 100 CAC 40 Nikkei DAX 30 Jordan (ASEGI) FTSE 100 3.3 2.8 2.8 2.2 2.1 2.0 2.0 1.5 7.7 7.6 7.5 5.9 4.7 4.1 3.8 3.3 3.0 (0.3) (5.0) 6.0 Source: Bloomberg 0.0 5.0 10.0 15.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) Qatar (DSM) Qatar (DSM) 2.8 Dow Jones Islamic S&P GCC 0.7 Dow Jones Islamic Bahrain (BAX) 0.6 UAE (ADX) UAE (ADX) 0.2 7.2 7.1 5.6 KSA (TASI) 4.1 Kuwait (KSE) 3.8 0.4 Kuwait (KSE) 11.0 S&P GCC 1.9 KSA (TASI) (0.2) UAE (DFM) Oman (MSM) (0.3) Bahrain (BAX) 2.9 0.8 Oman (MSM) (1.8) UAE (DFM) (1.8) (2.0) (1.0) 0.0 1.0 2.0 3.0 (5.0) 4.0 Source: Bloomberg 0.0 5.0 10.0 15.0 Global US stocks posted another week of gains, as the Congress passed a stopgap spending bill to keep the federal government funded for another 3 weeks. S&P added 2.2%, following gains in Healthcare segment, however a risk on rally weighed on defensive sectors like Utilities and Consumer Staples. Nasdaq closed 2.8% higher. Netflix surged around 10.0% on Tuesday after reporting subscriber growth that beat analysts’ expectations. In Europe, currencies dominated the market movements. The strength in EUR and GBP during the week, weighed on export focused German and UK benchmarks. In Asia, Japan’s index closed lower amidst gains in JPY. China’s index posted 2.0%, despite industrial profits growing at the slowest pace in a year in December-17 from a year ago GCC Rising oil prices, aided most of the region’s markets this week. In UAE, DFM underperformed its regional peers, majorly weighed by property developers over continued concern about the impact of ample supply of new homes on the sector. Emaar Properties weighed on the broader index, as the stock declined 6.5% after going ex-dividend. Saudi Arabia’s benchmark closed marginally lower, weighed by a drop in Food and Beverages stocks. Bahrain’s index was the second best performing index, with large amount of gains accruing from Khaleeji Commercial Bank. Qatar Qatar’s index posted strong gains this week, as investors rushed to capture higher dividend yields offered by its market amidst lower prices due to the embargo. Lesser than anticipated impact on earnings due to the embargo, has also lifted sentiments in on the bourse. Most sectors closed higher, with an exception of Insurance and Telecommunications stocks. Trade turnover and volumes were on the decline in the market, where the Banking, Real Estate and Industrials sectors together accounted for more than 82% of the total volume. Out of 45 stocks traded, 26 advanced, 16 declined and 3 remained unchanged. Source: Bloomberg DSM INDEX 10,500 9,459.6 9,500 8,500 7,500 Aug-17 Sep-17 Index Oct-17 50 SMA 100 SMA Dec-17 200 SMA Jan-18 Indicator Price Last Close 9,459.6 MAVG 50 8,405.6 MAVG 100 8,333.8 MAVG 200 8,967.6 6 Month High 9,459.6 6 Month Low 7,714.3 RSI (14 Days) 77.7 Source: Bloomberg 2
3. WEEKLY WRAP January 28 , 2018 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 3.50 3.00 2.50 2.47 4.53 3.51 3.18 2.91 3.00 2.49 2.29 1.95 1.50 4.53 3.82 4.00 2.12 2.00 1.00 2.66 2.60 5.00 3.06 2.00 1.22 2.58 3.38 3.28 3.18 2.21 1.00 0.50 0.00 0.00 2 Yrs 5 Yrs 7 Yrs Current 10 Yrs 2 Yrs 30 Yrs 7 Yrs Current Last Year Source: Bloomberg 10 Yrs 30 Yrs Last Year Source: Bloomberg CDS 5 Years CDS 5 Yrs 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) QGIB 2019 104.6 45.2 2.48 (0.1) (0.7) 104.4 62.7 2.85 (0.2) (0.8) US 23.9 (3.4) (3.4) (3.4) QGIB 2020 UK 16.8 (0.4) (3.4) (3.4) Qatari Diar 2020 97.4 73.7 3.13 (0.1) (0.9) QGIB 2021 104.5 72.2 3.04 (0.0) (0.5) QGIB 2022 104.1 89.4 3.34 (0.2) (1.4) QGS 2023 98.8 97.6 3.47 (0.1) (0.3) QGIB 2026 95.9 118.1 3.80 (0.1) (1.7) QGIB 2030 153.7 146.4 4.13 (0.2) (2.2) QGIB 2040 125.9 176.8 4.51 (0.0) (2.6) QGIB 2042 117.8 176.3 4.51 0.2 (2.7) QGIB 2046 102.0 173.4 4.49 0.3 (1.9) Germany 10.0 (0.3) (1.3) (1.3) France 18.0 (0.2) (1.2) (1.2) Italy 101.4 (5.1) (19.3) (19.3) Greece 326.1 (1.6) (101.5) (101.5) Russia 114.1 0.0 (15.7) (15.7) Japan 18.7 (1.2) (8.5) (8.5) Turkey 166.1 (3.4) (0.8) (0.8) Brazil 144.3 (6.3) (19.5) (19.5) Source: Bloomberg, QCB Egypt 282.3 (48.6) (46.9) (46.9) US Swap Rates Abu Dhabi 52.9 (1.4) (11.7) (11.7) Bahrain 261.2 (1.0) (26.2) (26.2) Dubai 120.3 (0.5) (8.9) Qatar 92.3 (3.8) (11.1) GCC Saudi Arabia Tenor 79.5 (5.9) (14.6) Price (%) Weekly Δ (BPS) YTD Δ (BPS) 3M LIBOR 1.760 0.016 0.066 6M LIBOR 1.950 0.018 0.113 (8.9) 12M LIBOR 2.241 0.013 0.134 (11.1) 2 years 2.305 0.037 0.225 5 years 2.545 0.016 0.302 10 years 2.684 (0.032) 0.284 30 years 2.773 (0.055) 0.228 (14.6) International Credit Spreads iTraxx Europe 43.0 (2.0) (2.1) (2.1) iTraxx Europe Crossover 231.6 (2.3) (2.3) (2.3) Commentary CDX North America IG 45.6 (2.2) (3.8) (3.8) CDX North America HY 292.2 (6.4) (14.4) (14.4) iTraxxSovX CEEMEA NA NA NA NA iTraxx Europe Senior Financial 13.0 (3.7) (3.0) (3.0) iTraxx Europe Sub Financial 13.2 (10.4) (7.2) (7.2) US Treasury yields edged higher earlier during the week after the Congress averted the government shutdown for another three weeks. The yields were further supported by data showing sustained growth in US GDP during Q4-17. While the rise in yields came to a halt mid-week, the upward momentum resumed after the USD fell to a three-year low, making the US bonds unattractive to foreign investors. UK gilt yields advanced this week on back of strong UK employment data and robust UK GDP growth in Q4-17. Eurozone government bond yields edged up after ECB President Mario Draghi gave positive outlook of the economy. Source: Bloomberg Source: Bloomberg 3
4. WEEKLY WRAP January 28 , 2018 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 70.5 WTI Crude (USD/bbl) 66.1 Oil prices ended higher this week, buoyed by brighter outlook for the global economy in 2018 and 2019 by IMF and continued compliance of the oil production cuts by OPEC and other allied members. The prices also rose on account of 10th straight decline in the US crude stockpiles, as reported by EIA. Natural gas prices rose this week on the back of forecast of another cold blast in February-2018. Expectations of a large decline in US natural gas inventories by the end of winter also led the natural gas prices higher. Copper prices started the week lower, amidst rise in copper inventories, however closed the week marginally higher, amidst a weaker USD. Gold prices rose, buoyed by weaker USD. Natural Gas (USD/mmBTU) 3.5 Gold (USD/t oz.) 1,352.1 Silver (USD/t oz.) 17.4 Copper (USD/lb) 319.9 Source: Bloomberg Weekly Performance (%) YTD Performance (%) Natural Gas Natural Gas 10.0 WTI Crude Brent Gold 3.3 Silver 1.4 1.7 Copper (3.1) 0.4 0.0 5.5 Gold 2.4 Copper 9.5 Brent 2.8 Silver 18.7 WTI Crude 4.4 2.0 4.0 6.0 8.0 10.0 (5.0) 12.0 Source: Bloomberg 0.0 5.0 10.0 15.0 20.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.4190 USD/INR 63.0425 EUR/USD 1.2457 USD/CNY 6.3283 CAD/USD 0.8118 USD/TRY 3.7514 AUD/USD 0.8110 USD/EGP 17.6885 NZD/USD 0.7350 USD/ZAR 11.8623 108.5800 USD/RUB 56.2400 USD/JPY Commentary USD ended lower against its major peers this week, weighed by US Treasury Secretary Steven Mnuchin’s comments, supporting a weaker USD at the World Economic Forum in Davos. The currency was also pressured by weaker-than-expected Q4-17 US GDP data. JPY gained against the USD on the back of optimistic comments from BoJ Governor Haruhiko Kuroda about the growth of economy and expectations of pickup in inflation. CAD strengthened, backed by rise in core inflation in Dec-17 and rally in oil prices. GBP advanced against the greenback amid upbeat employment data. Source: Bloomberg Weekly Performance (%) ZAR GBP JPY EUR TRY AUD CAD CNY NZD RUB INR EGP YTD Performance (%) GBP ZAR AUD JPY NZD EUR CNY RUB CAD TRY EGP INR 2.6 2.2 2.1 1.7 1.5 1.4 1.4 1.4 1.0 0.7 0.4 0.4 0.0 Source: Bloomberg 0.5 1.0 1.5 2.0 2.5 3.0 4.8 4.7 3.9 3.8 3.6 3.5 3.1 2.4 2.0 1.5 0.5 0.4 0.0 1.0 2.0 3.0 4.0 5.0 6.0 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