Weekly Market Review August 23, 2015 – August 29, 2015

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CONTENTS 

International Equity Markets



GCC Equities



Currencies



Commodities



Interest Rates



Equity Markets - Top Most & Bottom Most



Commodity Markets - Top Most & Bottom Most

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INTERNATIONAL EQUITY MARKETS  

             

US 2Q2015 GDP growth revised to 3.7% annual pace vs. 2.3% reported earlier on solid domestic demand Conference Board’s US consumer confidence index jumped 10.5 points to 101.5 in Aug amid labor market optimism  Non-defense capital goods orders, excluding aircraft, rose 2.2% in Jul, biggest gain since Jun 2014  Consumer spending advanced 0.3% in Jul as wages rose 0.5%, the biggest gain since Nov 2014  New home sales increased 5.4% in Jul to a seasonally adjusted annual rate of 507,000 units Moody’s cut its 2016 global growth forecasts to 2.8% on average from 3% with China, US growth trimmed Canada recorded C$5.0bn budget surplus in 1QFY2015-16, much higher than C$424mn surplus in 1QFY2014-15 European Commission’s Euro area economic confidence index unexpectedly gained to 104.2 in Aug vs. 104 in Jul German consumer prices rose 0.1% YoY in Aug, same as in Jul, raising concerns among some ECB policy makers UK’s GDP rose 2.6% in the 12 months through Jun, lower as compared to 2.9% growth in the period ended in Mar Istat Italy’s business confidence index dropped to 102.5 from a revised 103.5 in Jul on economic recovery concerns Spain, one of the fastest growing Eurozone economy, expects to expand ~1% in 3Q2015 on tourism & consumption Greece’s economy edged up 0.9% in 2Q2015, improving from 0.8% initial estimate as well as 0.1% rise in 1Q2015 Japan consumer inflation remained flat YoY, household spending fell 0.2% in Jul, raising pressure for more stimulus China, to stabilize equity markets, allowed for 1st time local governments’ pension funds to invest in stock market  Stock-index futures contracts margin requirements increased to 30% from 20% to curb speculation Brazil’s economy shrank 1.9% QoQ in 2Q2015 vs. estimate of 1.7%, the biggest contraction in more than 6 years  Current a/c gap widened to $6.2bn in Jul from a revised $2.6bn in Jun, lower than forecasts of $6.6bn South Africa’s GDP declined an annualized 1.3% in 2Q2015 vs. rising 1.3% in 1Q2015, increasing recession fear Mexico factory exports jumped 6.5%, non-oil imports fell 5% MoM in Jul indicating domestic demand may be fading Nigeria’s 2Q2015 GDP expanded 2.35% on an annual basis vs. 3.96% in 1Q2015, due to slump in oil prices

S&P 500 – 1 year performance

Last Close 5 Day %

YTD % P/E (2015) *Div. Yield

1,988.87

0.91

-3.40

16.82

2.16

16,643.01

1.11

-6.62

15.11

2.56

4,828.33

2.60

1.95

21.07

1.27

363.28

0.55

6.05

15.58

3.54

6,247.94

0.97

-4.85

15.20

4.16

10,298.53

1.72

5.03

12.84

2.88

4,675.13

0.95

9.42

15.18

3.28

Nikkei 225

19,136.32

-1.54

9.66

18.08

1.55

Hang Seng

21,612.39

-3.56

-8.44

10.73

3.83

Brazil Bovespa

47,153.87

3.14

-5.71

12.96

4.14

S&P 500 DJI Nasdaq Comp Euro Stoxx 600 FTSE 100 Dax CAC 40

Russia - Micex BSE Sensex Shanghai Comp

1,719.16

3.36

23.10

6.04

4.69

26,392.38

-3.56

-4.03

16.06

1.40

3,232.35

-7.85

-0.07

13.44

1.99

Source: Bloomberg, Mashreq Private Banking; *Current

Euro Stoxx 600 – 1 year performance

Source: Bloomberg, Mashreq Private Banking Page I 3

GCC EQUITIES                     

Commercial Bank of Dubai’s BoD proposed to issue up to $750mn Basel III compliant Tier I perpetual bond National Bonds Corp. plans to offer Islamic Takaful insurance in 6 week’s time to its 80,000 clients in the UAE Abraaj Group closed its 2nd North Africa worth $375mn as part of its strategy to boost investments in Africa Al Noor Hospitals Group mulls raising its capacity across the UAE from 216 currently to over 400 beds by 2018-end UAE-based NMC Health reported its adjusted net profit advanced 14.7% YoY in 1H2015 to $46.9mn Abraaj Group, Fajr Capital and Gulf Capital are in race to acquire majority stake in Saudi’s Al Raya for Foodstuff Co. Dubai Investments’ wholly owned subsidiary Glass LLC secured projects exceeding AED280mn in 1H2015 1Malaysia Develop. Bhd (1MDB) denied Abu Dhabi's Int. Petrol. Inv. seeks not helping 1MDB restructure its assets Dubai’s Al Habtoor Group is reportedly talking with banks to borrow AED1.5bn to finance property investments Dubai-based pay-TV company OSN signed $400mn 5-year loan for general purposes and refinancing existing debt National Comm. Bank is reportedly selling SAR2bn Sukuk as part of its plan to raise SAR7bn capital before 2015-end Bupa Arabia for Cooperative Insurance’s BoD recommended a capital increase by SAR400mn through bonus shares Saudi Automotive Services Co. signed a SAR151.83mn Shari’ah-compliant facility agreement with the NCB Consortium including ACWA Power & Japan’s Mitsui secured $630mn financing for Oman’s Salalah 2 power project Oman’s United Finance Co. rejected Al Omaniya Financial Services’ takeover offer and will not pursue further talks Strategic & Precious Metals Proc. signed $40mn debt deal with Bank Nizwa to fund Oman Antimony roaster project Kuwait National Petroleum Co. awarded Package 4 & 5 of its Al-Zour New Refinery Project worth $1.3bn to Saipem Kuwait International Bank successfully closed $320mn debut syndicated Murabaha financing facility International Fin. Advisors is working on compulsory acquisition offer for First Takaful Ins. as its stake reached 91% Doha Bank expects to sell record QAR200mn of gold in 2015 as its demand rises amid crashing equities & currencies Qatar Gas Transport Co. expanded its JV with Greek Maran Ventures to include two new LNG vessels

DFMGI – 1 year performance

Last Close 5 Day %

YTD % P/E (2015) *Div. Yield

Dubai

3,648.45

-1.65

-3.33

11.34

7.13

Abu Dhabi

4,461.09

-1.14

-1.50

10.50

5.07

Saudi Tadawul

7,604.32

-5.10

-8.75

13.62

3.53

Qatar Index

11,295.46

-0.44

-8.06

12.75

4.48

Kuwait Index

5,876.51

-2.91 -10.09

-

4.38

Oman MSM 30

5,816.80

-4.48

-8.30

10.22

4.38

Bahrain All Share

1,302.29

-1.34

-8.71

-

5.27

Egypt EGX 30

7,078.83

-1.31 -20.70

10.56

1.93

Istanbul 100 Index

74,641.60

1.14 -12.93

9.68

3.31

Source: Bloomberg, Mashreq Private Banking; *Current

Saudi Tadawul – 1 year performance

Source: Bloomberg, Mashreq Private Banking Page I 4

CURRENCIES 





The US dollar advanced 1.8% against euro this week as Federal Reserve Vice Chairman Stanley Fischer said reports on US economy’s tempo have “been impressive,” adding to speculation the central bank will raise rates in 2015 British pound depreciated 1.9% against US dollar in the week ended Aug 28 after a report showed UK economic growth slowed in the second quarter of 2015 PBoC, after devaluing yuan on Aug 11, raised its reference rate by 0.15% on Aug 28 to 6.3986 per US dollar, the most in 5 months, taking analysts by surprise. The move raises questions about PBoC’s role in determining the level



Brazil’s real weakened 2.3% against US dollar in the week after data showed Latin America’s largest economy entered a recession, adding to concern corporate earnings will falter



Indian rupee ended the week 0.5% lower against US dollar, hit by the sell-off in global markets led by China earlier in the week as well as due to month-end demand for the American currency from importers and banks





10th

Malaysian ringgit lost 0.7% against US dollar during the past 5 days, recording a week of fall as thousands of protesters prepared for a weekend march to demand Prime Minister Najib Razak’s resignation

Last Close 5 Day % 1 Mth. %

YTD % 1 Year %

USD Index

96.1060

1.16

-0.69

6.47

16.52

EUR/USD

1.1185

-1.77

1.13

-7.55

-15.15

GBP/USD

1.5391

-1.93

-1.42

-1.19

-7.20

121.7100

-0.27

-1.50

1.61

17.34

USD/CHF

0.9637

1.81

0.12

-3.08

5.31

USD/CAD

1.3200

0.08

2.16

13.59

21.54

USD/BRL

3.5815

2.33

6.69

34.76

59.75

USD/RUB

65.2068

-5.74

8.67

7.36

77.56

USD/INR

66.1625

0.50

3.52

4.95

9.33

USD/CNY

6.3896

0.01

2.90

2.97

4.00

USD/AUD

1.3938

1.99

2.26

13.88

30.41

USD/JPY

Source: Bloomberg, Mashreq Private Banking

Indonesia’s rupiah declined 0.3% from Aug 21 to 13,983 per US dollar. Rupiah dropped for a 7th week, the longest losing streak since Oct, as global funds cut holdings of local assets amid an emerging-market rout

EUR/USD – 1 year performance

GBP/USD – 1 year performance

Source: Bloomberg, Mashreq Private Banking Page I 5

COMMODITIES 







WTI crude futures jumped 11.8% in the week, helped by a 17% surge in the last two sessions of the week, triggered by frenetic short-covering on concerns over violence in Yemen, a storm in the Gulf and refinery outages Gold prices in the spot market fell 2.4%, posting its biggest weekly drop in five weeks amid dollar strength and strong US economic data which added to speculation US Fed may consider increasing rates in 2015 Sugar futures on the US ICE Futures exchange climbed 5.1% this week as funds rushed to cover their bearish bets in the wake of stronger-than-expected US economic growth numbers Palladium lost 2.4% this week over concerns rate cut by China will not be enough to buoy auto sales in the country, while a report showing mine output of palladium, other metals in South Africa surged 84% YoY in Jun also weighed

Last Close 5 Day % 1 Mth. %

YTD % 1 Year %

Brent – ICE

50.05

10.10

-6.10

-12.70

-51.15

WTI – Nymex

45.22

11.79

-5.75

-15.11

-52.17

Gold Spot

1,133.55

-2.36

3.47

-4.33

-12.11

Silver Spot

14.60

-4.65

-0.58

-6.99

-25.12

Copper - CMX

234.65

1.87

-2.35

-16.95

-24.95

S&P GSCI Spot Index

365.65

5.04

-4.66

-12.55

-39.74

Baltic Dry Index

903.00

-9.15

-17.46

15.47

-19.30

Source: Bloomberg, Mashreq Private Banking



CBoT wheat futures dipped 4.5% in the week ended Aug 28 pressured by ample supplies of the grain and stiff competition to the US in global export market



CBoT soybean futures slipped 1.3% during the past five days hurt by the anxiety over an economic slowdown in China, the world's largest soybean buyer



Copper futures on the Comex division of the New York Mercantile Exchange moved up 1.9% in the week after gains in Chinese stocks inspired a little confidence in the country’s economy

WTI Crude – 1 year performance

GOLD – 1 year performance

Source: Bloomberg, Mashreq Private Banking Page I 6

INTEREST RATES 











US treasury bonds logged biggest weekly loss since Jun, helping 10-year yield climb 14.4 bps to 2.18% as comments from a top Federal Reserve official raised anxiety that the central bank could raise interest rates in September

Last Close 5 Day % 1 Mth. %

YTD % 1 Year %

USD-10yr

2.18

7.08

-3.08

0.43

-6.66

European bond yields gained this week as investors focused on the prospect on domestic growth after the Eurozone and German business confidence unexpectedly rose in Aug in spite of China slowdown concerns. German 10-year yield surged 17.8 bps to 0.74% whereas UK 10-year yield soared 17 bps to 1.96%

USD-2yr

0.72

16.78

7.13

7.69

43.12

Fed Funds Rate

0.14

-6.67

0.00 133.33

55.56

USD-3m Libor

0.33

-0.03

10.85

28.72

40.84

China’s central bank cut one-year benchmark lending and deposit rate by 25 bps each to 4.6% and 1.75%, respectively, effective from Aug 26. It also lowered the reserve requirement ratio by 50 bps to 18% for most big banks, effective from Sep 6

USD-6m Libor

0.53

0.84

12.79

47.26

60.97

German-10yr

0.74

31.56

7.69

37.15

-15.97

UK-10yr

1.96

16.03

1.34

11.73

-17.25

India’s 10-year sovereign bonds edged up, sending the yield down 1 bps to 7.78% on speculation lower oil prices and slowing inflation will give the central bank room to cut borrowing costs further

Japan-10yr

0.37

3.60

-6.97

16.15

-23.36

AED-3m EIBOR

0.81

0.89

6.58

19.62

13.40

The National Bank of Ukraine lowered its key interest rate to 27% from 30% on Aug 27 citing reduced inflation risks. The central bank said slowing inflation meant it is possible to start softening of monetary credit policy

AED-6m EIBOR

0.94

0.77

2.66

11.17

3.96

Source: Bloomberg, Mashreq Private Banking

Angola’s central bank raised its benchmark interest rate for a third consecutive month on Aug 28 to 10.5% from 10.25%, in order to bolster the currency amid an economic crisis triggered by falling oil prices

US 10 year Generic Yield – 1 year performance

UK 10 year Generic Yield – 1 year performance

Source: Bloomberg, Mashreq Private Banking Page I 7

EQUITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY

YTD

1

Russia

8.86%

Weekly Change (USD Adj.) 8.86%

2

Argentina

4.44%

4.09%

2

Hungary

28.25%

19.41%

3

South Korea

3.28%

5.12%

3

Jamaica

27.86%

24.50%

4

Brazil

3.14%

0.78%

4

Argentina

27.77%

16.43%

5

Taiwan

2.98%

4.29%

5

Denmark

26.81%

16.98%

6

Canada

2.90%

2.82%

6

Malta

26.44%

16.90%

7

Peru

2.83%

4.21%

7

Ireland

20.76%

11.65%

8

Mexico

2.67%

4.13%

8

Estonia

16.49%

7.70%

9

Vietnam

2.62%

2.78%

9

Slovakia

16.09%

7.33%

10

Indonesia

2.54%

2.23%

10

Italy

15.68%

6.95%

Ref

Country

Weekly Change

Ref

Country

Ref

Country

Weekly Change

1

China

-7.85%

Weekly Change (USD Adj.) -7.86%

2

Kenya

-6.33%

3

Kazakhstan

4

Ref

Country

YTD Change

1

Venezuela

284.46%

YTD Change (USD Adj.) 284.46%

1

Peru

-29.15%

YTD Change (USD Adj.) -34.56%

-6.79%

2

Greece

-23.28%

-29.07%

-5.94%

-8.11%

3

Egypt

-20.70%

-27.52%

Israel

-5.81%

-7.24%

4

Colombia

-19.50%

-37.80%

5

Saudi Arabia

-5.10%

-5.12%

5

Nigeria

-16.81%

-23.30%

6

Oman

-4.48%

-4.50%

6

Indonesia

-14.94%

-24.64%

7

Romania

-3.84%

-5.29%

7

Kenya

-13.94%

-24.96%

8

Hong Kong

-3.56%

-3.53%

8

Taiwan

-13.84%

-15.42%

9

India

-3.56%

-4.04%

9

Bulgaria

-13.02%

-19.58%

10

Hungary

-3.55%

-5.15%

10

Turkey

-12.93%

-30.46%

YTD Change

Source: Bloomberg, Mashreq Private Banking Page I 8

COMMODITY MARKETS - TOP MOST & BOTTOM MOST WEEKLY Ref

Commodity

YTD Weekly Change

Ref

1

WTI Crude

11.79%

1

Cocoa

Commodity

7.04%

2

Brent Crude

10.10%

2

Cotton

5.77%

3

Gasoil

7.85%

3

Gasoline

5.54%

4

Heat Oil

7.80%

4

Rough Rice

0.87%

5

Lean Hogs

5.73%

5

6

Natural Gas

5.42%

6

7

Sugar

5.08%

7

8

Aluminium

3.55%

8

9

Gasoline

2.98%

9

10

Orange Juice

2.94%

10

Ref

Commodity

Weekly Change

Ref

Commodity

YTD Pct Change

YTD Pct Change

1

Cotton

-5.75%

1

Nickel

-33.60%

2

Tin

-4.70%

2

Lumber

-28.39%

3

Silver

-4.65%

3

Coffee

-27.70%

4

Feeder Cattle

-4.53%

4

Tin

-26.80%

5

Wheat

-4.50%

5

Palladium

-26.29%

6

Lumber

-3.38%

6

Steel Rebar

-25.97%

7

Palladium

-2.41%

7

Sugar

-24.45%

8

Gold

-2.36%

8

Wheat

-19.12%

9

Steel Rebar

-1.88%

9

Lean Hogs

-18.20%

10

Bean Meal

-1.68%

10

Natural Gas

-17.93%

Source: Bloomberg, Mashreq Private Banking Page I 9

IMPORTANT NOTICE

This report was prepared by the Private Banking Unit of Mashreqbank psc (“Mashreq”) in the United Arab Emirates (“U.A.E.”). Mashreq is regulated by the Central Bank of the U.A.E. This report is provided for informational purposes and private circulation only and should not be construed as an offer to sell or a solicitation to buy any security or any other financial instrument or adopt any hedging, trading or investment strategy. Prior to investing in any product, we recommend that you consult with a professional financial advisor, taking into consideration investment objectives, financial circumstances and tax implication. While based on information believed to be reliable, we do not guarantee and make no express or implied representation as to the accuracy of this report or complete description of the securities markets or developments referred to in this report. The information, opinions, forecasts (if any), assumptions or estimates contained in this report are as of the date indicated and are subject to change at any time without prior notice. The stated price of any securities mentioned in this report is as of the date indicated and is not a representation that any transaction can be effected at this price. The risks related to investment products described in this report are not all encompassing and investors should refer to the relevant investment offer document for detailed information and applicable terms and conditions. Investment products, including treasury products, are not guaranteed by Mashreq or any of its affiliates or subsidiaries unless stated otherwise and are subject to investment risk, including loss of principal. Investment products are not government insured. Past performance is not an indicator of future performance. US persons (US Citizens; US Green Card Holders; Resident Aliens subject to US income taxes for IRS purposes) are not eligible for any of the investment products introduced by Mashreq unless stated otherwise. This report is for distribution only under such circumstances as may be permitted by applicable law. Neither Mashreq nor its officers, directors or shareholders or other persons shall be liable for any direct, indirect, incidental or other damages including loss of profits arising in any way from the information contained in this report. This report is intended solely for the use by the intended recipients and the contents shall not be reproduced, redistributed or copied in whole or in part for any purpose without Mashreq’s prior express consent.

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