GCC Weekly Wrap - 6 May

Transcription

1. WEEKLY WRAP May 06 , 2018 ECONOMIC UPDATE & NEWS 57.3 59.3 France Markit Manufacturing PMI Apr F 53.4 53.8 53.4 Eurozone GDP SA QoQ Q1 A 0.40% 0.40% 0.70% Eurozone GDP SA YoY Q1 A 2.50% 2.50% 2.70% Apr-27th 3.10 2.90 US MBA Mortgage Applications - (2.50%) (0.20%) 2.80 US FOMC Rate Decision May-02nd 1.75% 1.75% 1.75% US Initial Jobless Claims Apr-28th 225k 211k 209k 2.70 US Durable Goods Orders Mar F - 2.60% 2.60% US Change in Nonfarm Payrolls Apr 193k 164k 135k Russia Gold and Forex Reserve Apr-27th - 460.4b 463.8b Russia CPI YoY Apr 2.40% 2.40% 2.40% Source: Bloomberg GLOBAL NEWS  OPEC’s oil output was down by 70,000 bpd to 32.1mn bpd in April-18 due to declining production in Venezuela and low African shipments. (Source: Reuters)   The US Fed has kept its interest rates steady and has expressed optimism on the sustainability of current inflations numbers, which are close to the 2.0% target. (Source: Reuters) US President Donald Trump has threatened to shut down the federal government in Sep-18 if the Congress doesn’t provide additional funding to build the Mexican border wall. (Source: Reuters)  US private sector employment increased by 204,000 jobs in Apr-18, led by higher employment in services sector. (Source: ADP)  US personal income increased by 0.3% YoY to USD 47.8bn in March18, while personal consumption expenditure grew 0.4% MoM in the same period. (Source: Bureau of Economic Analysis)  Eurozone GDP grew 0.4% QoQ and 2.5% YoY in Q1-18, while the seasonally-adjusted unemployment rate was stable at 8.5% in Mar-18. (Source: Eurostat)    China's securities regulator has removed the restrictions limiting the ownership limit of single foreign investors up to 30.0% in securities ventures, either directly or through a partner. (Source: Reuters) Japan's monetary base increased by 7.8% YoY in Apr-18 to JPY 492.0tn. The nation's current account balance rose 8.9% YoY to JPY 383.3tn in the same period. (Source: Bank of Japan) S&P has surprisingly trimmed Turley's sovereign debt rating further into junk territory (BB-). The downgrade comes amidst concerns about inflation due to a sell-off in the local currency. (Source: Reuters) GCC NEWS   UAE and Japan have agreed to expand economic, political and defense cooperation and signed an investment protection agreement during Japanese Prime Minister’s visit to UAE. (Source: Arabian Business) UAE Cabinet is planning to exempt gold and diamond sectors from VAT at the wholesale level. Retailers will continue to impose 5 per cent on all jewellery transactions taking place at their shops. (Source: Arabian 05-Feb 2.60 Source: Bloomberg  Saudi Arabia's Real Estate Investment Trusts have exceeded a market capitalization of USD 2.0bn with the number of listed REITs doubling to 12 in the last two quarters according to Tadawul. (Source: Trade Arabia)  Saudi Arabian Monetary Authority has partnered with Deloitte Middle East to develop a financial technology (FinTech) ecosystem to enhance its economic competitiveness. (Source: Trade Arabia)  IMF regional director has expressed his views that Saudi Arabia needs oil prices to be at least USD 85.0 per barrel in 2018 to be able to balance its budget. (Source: Arabian Business)  Saudi Arabia's finance minister has announced that it will be able to cut its budget deficit to 7.0% of GDP, which implies a deficit of SAR 95.0bn (USD 52.0bn) in 2018. (Source: Reuters)  Oman's budget deficit declined to OMR 3.7bn in 2017, against OMR 5.3bn in 2016, driven by the government's balanced financial control policy. (Source: Times of Oman)  Bahrain was the fastest growing economy in the GCC in FY-17 with real GDP growth of 3.9% during the year and non-oil economy expanded by 5.0%. (Source: Trade Arabia) QATAR NEWS  International Labor Organization (ILO) has set up an office in Doha as part of a three year technical agreement signed in Oct-17 to strengthen national labor laws. (Source: Gulf times)  Population in Qatar reached an all-time high of 2.7mn, registering and increase of 0.8% MoM in April-18. (Source: Gulf Times)  Cumulative net profit of listed Qatari companies increased 2.9% YoY to QAR 10.9bn in Q1-18 driven by strong earnings expansion in the industrials, consumer goods, banking and transport sectors. (Source: Gulf  Producer price index increased 19.2% YoY in Mar-18 largely impacted by 23.3% YoY increase in the mining index. (Source: Qatar Tribune)  Maritime and Logistics Company Milaha (Qatar Navigation) has launch a direct container feeder service between Qatar and Iraq to contribute to the reconstruction efforts in Iraq. (Source: Peninsula Qatar)  Qatar Electricity and Water Company has announced that its mega Umm Al Houl Power Plant is expected to be operational in October 18 as 99.0% the project works are completed. (Source: Gulf Times)  Qatar Petroleum has entered into a 15 years agreement with Vietnam to supply up to 2.0mn tons per year of liquefied petroleum gas and naphtha. (Source: Gulf times)  Total assets of all listed banks in Qatar increased 8.1% YoY to USD 389.4bn in FY-17, led by growth in corporate lending, cash and equivalents and investment securities, according to KPMG. (Source: Gulf Times) Business)  Dubai International Airport witnessed a 4.5% YoY rise in the passenger traffic to 7.8mn in Mar-18. (Source: Trade Arabia)  Dubai’s trade for auto parts and accessories increased by 3.1% YoY to AED 9.9bn (USD 10.8bn) in FY-17 according to Dubai Customs. (Source: Trade Arabia)  Abu Dhabi National Oil Co. has signed an agreement with Vienna based integrated oil and gas company OMV, wherein the latter will provide oil exploration services for USD 1.5bn. (Source: Arabian Business) 2.95 3.00 30-Apr 58.5 23-Apr Apr 16-Apr ISM Manufacturing 09-Apr US UST 10yr Bond 02-Apr 0.90% 26-Mar Prior 0.60% 19-Mar Actual 0.80% 12-Mar Survey Apr P 05-Mar Period 26-Feb CPI EU Harmonized YoY 19-Feb Event Italy 12-Feb Region Times) 1
2. WEEKLY WRAP May 06 , 2018 QUITY Index Price S&P 500 WTD %Δ MTD %Δ YTD %Δ COMMENTARY Index Price WTD %Δ MTD %Δ YTD %Δ 2,663.4 (0.2) 0.6 (0.4) MSCI EM 1,136.2 (1.7) (2.4) (1.9) 24,262.5 (0.2) 0.4 (1.8) S&P GCC 1,653.2 (1.8) (1.9) 3.8 Nasdaq 6,769.1 1.7 2.5 5.8 Dow Jones Islamic 3,641.0 0.1 0.5 0.1 FTSE 100 7,567.1 0.9 0.8 (1.6) KSA (TASI) 8,107.5 (1.7) (1.2) 12.2 DAX 30 12,819.6 1.9 1.6 (0.8) UAE (DFM) 2,948.0 (3.1) (3.8) (12.5) CAC 40 5,516.1 0.6 (0.1) 3.8 UAE (ADX) 4,556.8 (3.0) (2.4) 3.6 102,599.2 (4.7) (1.6) (11.0) Qatar (DSM) 8,805.8 (3.1) (3.4) 3.3 DJIA BIST 100 Nikkei 22,472.8 0.0 0.0 (1.3) Kuwait (KSE) 4,800.7 (0.0) 0.0 (3.3)* Sh. Comp 3,091.0 0.3 0.3 (6.5) Bahrain (BAX) 1,263.5 0.0 0.4 (5.1) Hang Seng 29,926.5 (1.2) (2.9) 0.0 Oman (MSM) 4,725.6 0.1 (0.1) (7.3) Sensex 34,915.4 (0.2) (0.7) 2.5 Jordan (ASEGI) 2,167.2 (1.3) (1.1) 1.9 Source: Bloomberg GLOBAL INDICES Weekly Performance (%) DAX 30 Nasdaq FTSE 100 CAC 40 Sh. Comp Nikkei Sensex DJIA S&P 500 Hang Seng Jordan (ASEGI) MSCI EM BIST 100 YTD Performance (%) (0.2) (0.2) (0.2) (1.2) (1.3) (1.7) (4.7) (6.0) 0.9 0.6 0.3 0.0 (4.0) (2.0) 0.0 1.9 1.7 2.0 Nasdaq CAC 40 Sensex Jordan (ASEGI) Hang Seng S&P 500 DAX 30 Nikkei FTSE 100 DJIA MSCI EM Sh. Comp BIST 100 (11.0) (15.0) 4.0 Source: Bloomberg (6.5) (10.0) 0.0 (0.4) (0.8) (1.3) (1.6) (1.8) (1.9) (5.0) 3.8 2.5 1.9 0.0 5.8 5.0 GCC Most GCC equity markets ended lower during the last week. The Saudi Arabian benchmark fell by 1.7%, continuing its downward trend, amid profit booking by the investors. SABIC dropped 4.2%, despite reporting broadly in line Q1-18 results. The Dubai’s benchmark inched 3.1%, amid weakness in Real Estate stocks. Emaar Properties retreated 3.1%, despite reporting a rise in its Q1-18 net income. Drake & Skull International plunged 20.0%, after failing to receive an approval to raise additional capital. In Abu Dhabi, losses in Telecommunication and Real Estate stocks weighed on the equity benchmark. 10.0 Source: Bloomberg GCC INDICES Weekly Performance (%) YTD Performance (%) Dow Jones Islamic KSA (TASI) 0.1 12.2 Oman (MSM) 0.1 S&P GCC 3.8 Bahrain (BAX) 0.0 UAE (ADX) 3.6 Kuwait (KSE) (3.1) UAE (DFM) (3.1) (4.0) 0.1 Kuwait (KSE)* (1.8) (3.0) Qatar (DSM) 3.3 Dow Jones Islamic (1.7) S&P GCC UAE (ADX) Qatar (DSM) (0.0) KSA (TASI) (3.3) Bahrain (BAX) (5.1) Oman (MSM) (7.3) UAE (DFM) (12.5) (3.0) (2.0) (1.0) 0.0 1.0 Source: Bloomberg (20.0) Source: Bloomberg, * since (10.0) 1st 0.0 10.0 Global The US equity markets ended mostly lower during the last week, as the US Fed policy makers showed their confidence about inflation in the nation, strengthening the case for future rate hikes. The S&P 500 Index ended 0.2% lower as losses in the Health Care sector weighed on the index, due to poor earnings results and worries that the US President might announce measures to regulate drug prices in the nation. The Stoxx Europe 600 index rose by 0.6%, as investors reacted positively towards the latest batch of corporate earnings data and amid weakness the euro currency. The UK’s benchmark rose 0.9%, as dismal UK economic data weighed on the GBP, which boosted export-oriented shares. In Asia, the Japanese benchmark inched marginally higher in a holiday shortened week. The Chinese benchmark rose 0.3%, following the release of better than expected domestic manufacturing and services activity data. 20.0 Qatar The QE index inched 3.1% lower during the last week, on the back of increased net selling activity on the part of foreign institutional investors. Total trading value and volume declined, with Industrial, Telecom and Banking sectors together accounting for 71.0% of the total trading volume. Ezdan Holding fell 17.3%, after the company’s net income fell significantly in Q1-18. Out of 45 listed shares, 43 exchanged hands, 36 declined, 6 advanced and 3 remained unchanged. April 2018 DSM INDEX Indicator Price Last Close 8,805.8 MAVG 50 8,839.7 8,600 MAVG 100 8,852.9 8,050 MAVG 200 8,678.2 6 Month High 9,459.6 6 Month Low 7,714.3 RSI (14 Days) 85.0 9,700 8,805.8 9,150 7,500 Nov-17 Dec-17 Index Feb-18 50 SMA 100 SMA Mar-18 200 SMA May-18 Source: Bloomberg 2
3. WEEKLY WRAP May 06 , 2018 RATES & CREDIT US Treasury (%) Qatar Treasury (%) 3.50 3.00 2.50 2.39 2.53 0.00 4.00 2.24 1.50 0.50 5.00 2.89 2.00 1.00 6.00 3.07 2.86 2.71 1.21 1.00 3 Yrs 5 Yrs Current 10 Yrs Last Year 30 Yrs Source: Bloomberg 1.85 2 Yrs 2.66 2.28 3 Yrs 5 Yrs Current 10 Yrs Last Year 30 Yrs Source: Bloomberg CDS 5 Years CDS 4.31 3.52 2.00 0.00 2 Yrs 3.90 3.48 3.00 1.77 1.41 3.22 4.89 4.34 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 103.3 34.5 2.80 (0.1) (2.0) QGIB 2020 103.2 56.6 3.20 (0.0) (2.0) QGIB 2021 96.5 74.2 3.55 (0.1) (1.9) Qatari Diar 2020 103.0 78.2 3.56 (0.1) (2.0) QGIB 2022 102.6 86.5 3.69 (0.1) (3.0) (1.7) US 27.4 (0.4) (0.4) 0.2 UK 17.9 0.0 0.0 (2.6) Germany 11.4 (0.3) (0.3) 0.1 France 18.5 (0.4) (0.4) (0.7) QGS 2023 97.3 95.6 3.83 (0.1) Italy 90.3 (1.2) (1.2) (30.5) QGIB 2023 99.5 108.0 3.97 (0.3) NA Greece 342.4 11.5 14.3 (85.2) QGIB 2026 93.3 127.6 4.21 (0.2) (4.3) Russia 141.2 8.7 7.0 11.3 QGIB 2028 99.7 156.2 4.53 (0.2) NA QGIB 2030 146.5 168.7 4.66 (0.5) (9.4) QGIB 2040 117.6 203.0 5.03 (0.8) (10.9) QGIB 2042 109.5 203.0 5.03 (0.7) (11.0) QGIB 2046 93.4 205.5 5.07 (0.7) (10.6) QGIB 2048 97.7 224.9 5.25 (1.5) NA Japan 25.4 (0.4) (0.4) (1.8) Turkey 225.9 29.6 27.8 59.0 Brazil 187.3 16.1 11.8 23.4 Egypt 303.9 26.5 32.3 (25.3) Source: Bloomberg, QCB GCC Abu Dhabi 66.9 2.2 2.5 2.3 US Swap Rates Bahrain 371.8 82.9 66.0 84.4 Tenor Dubai 120.3 5.4 6.7 (8.9) 3M LIBOR 6M LIBOR Qatar 93.1 3.5 3.1 (10.4) Saudi Arabia 91.6 2.3 1.7 (2.4) International Credit Spreads iTraxx Europe 56.2 1.7 1.8 11.4 iTraxx Europe Crossover 273.3 1.7 2.2 40.9 CDX North America IG 61.8 1.7 1.2 12.7 CDX North America HY 341.4 3.6 2.6 33.8 iTraxxSovX CEEMEA NA NA NA NA iTraxx Europe Senior Financial 18.3 2.8 1.7 4.7 iTraxx Europe Sub Financial 25.8 11.7 8.0 10.6 Price (%) Weekly Δ (BPS) YTD Δ (BPS) 2.363 0.005 0.669 2.515 (0.005) 0.678 12M LIBOR 2.773 (0.008) 0.666 2 years 2.765 0.029 0.685 5 years 2.914 0.004 0.670 10 years 2.984 (0.005) 0.584 30 years 3.009 (0.006) 0.465 Source: Bloomberg Commentary The US treasury yields remained mostly stable in the last week, as increased bets of additional rate hikes in the future from the US Fed were offset encouraging US unemployment rate data, which reached to a multi-year low level in the last month. Eurozone government and German bond yields fell at the end of the week, as the release of disappointing Eurozone annual inflation data increased doubts about the future course of the ECB’s quantitative easing program. Source: Bloomberg 3
4. WEEKLY WRAP May 06 , 2018 COMMODITIES Commodities Price Commentary Brent (USD/bbl) 74.9 WTI Crude (USD/bbl) 69.7 Brent and WTI crude oil prices ended higher during the last week, as mounting tensions surrounding the economic crisis in Venezuela and a chances regarding new sanctions against Iran triggered supply concerns about the commodity. Gold prices edged lower, continuing its downward trend, as continuous strength in the USD weighed on the yellow metal. Natural gas prices declined, as moderate temperatures did not create much heating or cooling requirement in the US. Natural gas prices also lost ground, after EIA reported a higher than expected rise in the natural gas inventories. Copper prices inched higher, as robust Chinese manufacturing data supported demand prospects for the metal. Natural Gas (USD/mmBTU) 2.7 Gold (USD/t oz.) 1,314.7 Silver (USD/t oz.) 16.4 Copper (USD/lb) 306.6 Source: Bloomberg Weekly Performance (%) YTD Performance (%) WTI Crude WTI Crude 2.4 Copper Brent Gold Copper (0.7) (4.1) (7.1) Natural Gas(8.2) (2.2) (3.0) 0.4 Silver 0.2 Natural Gas 12.0 Gold 0.3 Silver 15.4 Brent 0.6 (2.0) (1.0) 0.0 1.0 2.0 3.0 (10.0) Source: Bloomberg (5.0) 0.0 5.0 10.0 15.0 20.0 Source: Bloomberg FX Currencies Price Currencies Price GBP/USD 1.3561 USD/INR 66.3700 EUR/USD 1.1990 USD/CNY 6.3627 CAD/USD 0.7785 USD/TRY 4.2309 AUD/USD 0.7539 USD/EGP 17.6292 NZD/USD 0.7020 USD/ZAR 12.4991 109.1200 USD/RUB 62.4574 USD/JPY Commentary The USD rose to a four-month high level against a basket of major currencies in the last week, as the US Fed provided strong outlook for the US inflation for the coming period, which cemented expectations of further rate hikes. The CAD weakened to a one-month low against the greenback, despite stronger than expected Canadian GDP data. The GBP weakened against the USD, weighed by disappointing services sector report in the UK. The EUR weakened against the USD, following the release of slower increase in common currency bloc’s GDP and inflation data. The TRY slipped after the S&P trimmed Turkey’s ratings to further junk status. Source: Bloomberg Weekly Performance (%) EGP JPY CAD RUB CNY AUD INR NZD EUR ZAR GBP TRY YTD Performance (%) (1.8) (4.4) (5.0) Source: Bloomberg (4.0) (3.0) (1.4) (1.4) (2.0) (0.1) (0.1) (0.4) (0.5) (0.6) (0.6) (0.9) (1.0) JPY CNY EGP GBP EUR ZAR NZD CAD AUD INR RUB TRY 0.4 0.0 1.0 (10.1) (12.0) (10.0) (7.6) (8.0) (4.5) (6.0) (3.5) (2.1) (4.0) 0.7 0.1 (0.4) (0.7) (1.1) (2.0) 0.0 2.0 2.4 3.3 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