Weekly Market Review July 24, 2016 – July 30, 2016

July 31, 2016

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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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Americas

US’ GDP in 2Q2016 grew at 1.2% annual rate (vs. downwardly revised +0.8% in 1Q16), below estimates

Conference Board’s consumer confidence index remained nearly flat at 97.3 in Jul (vs. 97.4 in Jun)

Europe

Eurozone’s 2Q16 GDP rose 1.6% YoY (vs. +1.7% in 1Q16), above consensus. QoQ, GDP inched up 0.3%

Ifo’s German business sentiment index slipped in Jul to 108.3 (vs. 108.7 in Jun), better-than-forecasts

UK’s 2Q16 GDP expanded 2.2% YoY (vs. +2.0% in 1Q16), beating estimates. QoQ, GDP rose 0.6%

France’s GDP in 2Q16 remained flat (vs. +0.7% in 1Q16). Economists estimated a growth of 0.2%

Rest of the World

China’s industrial profits grew 5.1% YoY in Jun (vs. +3.7% in May) to reach CNY616.31bn

Japan’s retail sales fell 1.4% YoY in Jun (vs. -2.1% in May); edged up 0.2% MoM (vs. -0.1% in May)

Shinzo Abe said Japan’s government is set to unveil stimulus package over JPY28tn to boost economy

S&P 500 – 1 year performance Euro Stoxx 600 – 1 year performance

Source: Bloomberg, Mashreq Private Banking; *Current

INTERNATIONAL EQUITY MARKETS

Last Close 5 Day % YTD % P/E (2015) *Div. Yield

S&P 500 2,173.60 -0.07 6.34 18.44 2.10

DJI 18,432.24 -0.75 5.78 17.37 2.51

Nasdaq Comp 5,162.13 1.22 3.09 22.27 1.25

Euro Stoxx 600 341.89 0.46 -6.54 16.18 3.66

FTSE 100 6,724.43 -0.09 7.72 17.35 4.13

Dax 10,337.50 1.87 -3.77 13.19 2.95

CAC 40 4,439.81 1.34 -4.25 14.86 3.79

Nikkei 225 16,569.27 -0.35 -12.95 16.83 1.95

Hang Seng 21,891.37 -0.33 -0.11 12.14 3.73

Brazil - Bovespa

57,308.21 0.54 32.20 14.50 3.00

Russia - Micex 1,944.62 0.92 10.40 7.23 4.54

BSE Sensex 28,051.86 0.89 7.41 17.52 1.47

Shanghai Comp 2,979.34 -1.11 -15.82 13.78 2.01

Source: Bloomberg, Mashreq Private Banking

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UAE

Emirates Group’s 2Q16 net profit climbed 51% YoY to AED2.32bn; BoD proposed AED0.4/share dividend for 1H16

First Gulf Bank’s 2Q16 net profit declined 10% YoY to AED1.31 bn; below estimates

Abraaj Group raised $526mn for investments in Turkey; expects to complete 4-5 acquisitions in Turkey over 2 yrs

Fitch Ratings affirmed the long- and short-term Issuer Default Ratings of 11 UAE banks as part of its peer review

Saudi Arabia

Al Rajhi Bank plans to invest about SAR32.4bn in Saudi Arabia’s government bonds under Islamic Murabaha term

National Shipping Company of Saudi Arabia’s 2Q16 net profit surged 47.2% YoY to SAR504.18mn

Saudi Telecom Company’s 2Q16 net profit fell 27.1% YoY to SAR1.87bn below estimates of SAR2.37bn

Saudi Basic Industries Corporation’s 2Q16 net profit declined 23.2% YoY to SAR4.74bn due to lower sale prices

Rest of GCC

Ooredoo Group’s net profit to its shareholders surged 46% YoY in 1H2016 to reach QAR1.5bn

Aluminium Bahrain plans to approach local banks to raise $500mn for Line 6 Expansion project

Bank Dhofar’s BoD approved a rights issue to raise up to $103.9mn

Last Close 5 Day % YTD % P/E (2015) *Div. Yield

Dubai 3,519.27 -0.70 11.69 11.14 4.28

Abu Dhabi 4,593.58 0.08 6.65 12.30 5.31

Saudi Tadawul 6,335.59 -4.02 -8.34 13.16 3.92

Qatar Index 10,652.31 1.12 2.14 13.04 3.85

Kuwait Index 5,460.73 1.29 -2.75 – 4.31

Oman MSM 30 5,854.39 0.62 8.29 8.94 5.01

Bahrain All Share

1,160.05 -0.02 -4.59 – 4.70

Egypt EGX 30 8,030.85 7.99 14.63 10.11 2.00

Istanbul 100 Index

75,405.53 5.11 5.13 8.73 3.03

Source: Bloomberg, Mashreq Private Banking; *Current

DFMGI – 1 year performance Saudi Tadawul – 1 year performance

GCC EQUITIES

Source: Bloomberg, Mashreq Private Banking

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The US dollar index fell 1.99% this week after a report showed that US GDP expanded at less-than-expected pace in 2Q16, damping speculation that the Federal Reserve will raise interest rates in 2016

Japanese yen strengthened 3.83% against the US dollar in the week as the Bank of Japan (BoJ) disappointed investors with modest extra stimulus. The BoJ maintained its current negative interest rates and bond buying program, but increased its purchases of exchange traded funds to ¥6tn per annum from ¥3.3tn previously

Chinese yuan gained 0.67% against US dollar this week as the US’ Fed refrained from signaling an imminent rate hike, adding to optimism the currency will halt declines as Chinese authorities show a preference for stability

Brazilian real appreciated 0.23% against the US dollar during the week due to speculation that Finance Minister Henrique Meirelles will have more power over budget planning as the government seeks to control spending and restore confidence in Latin America’s largest economy

Russian ruble weakened 1.77% against the US dollar as oil traded at its lowest levels in four months during the week, spurring concern about the world’s biggest energy exporter’s ability to meet budget targets

Australian dollar strengthened against the greenback by 1.71% from July 22 as the US dollar weakened on signs that the Federal Reserve is not ready to lift interest rates in Sept as well as release of soft US GDP data

Last Close 5 Day % 1 Mth. % YTD % 1 Year %

USD Index 95.5300 -1.99 -0.25 -3.14 -2.08

EUR/USD 1.1174 1.79 0.44 2.87 2.21

GBP/USD 1.3230 0.92 -1.48 -10.22 -15.20

USD/JPY 102.0600 -3.83 -0.75 -15.11 -17.79

USD/CHF 0.9695 -1.78 -1.04 -3.25 0.03

USD/CAD 1.3030 -0.74 0.73 -5.85 0.23

USD/BRL 3.2489 -0.23 0.88 -17.97 -3.64

USD/RUB 65.9445 1.77 3.49 -9.07 10.40

USD/INR 66.9950 -0.13 -1.02 1.27 4.61

USD/CNY 6.6350 -0.67 -0.03 2.18 6.85

USD/AUD 1.3161 -1.71 -1.93 -4.10 -4.03

EUR/USD – 1 year performance GBP/USD – 1 year performance

Source: Bloomberg, Mashreq Private Banking

CURRENCIES

Source: Bloomberg, Mashreq Private Banking

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Brent & WTI crude futures declined 7.07% and 5.86%, respectively, in the week ended Jul 29 due to fears over rising supply from the Organization of Petroleum Exporting Countries (OPEC), a glut of crude products coupled with global growth concerns emanating from Brexit

Gold prices in the spot market rose by 2.16% during the week after a report on the US economic growth came in weaker than expected, pushing the US dollar lower and lifting prices for the precious metal to a three-week high

Palladium and platinum prices increased in the week by 3.68% and 6.14%, respectively, after demand from the car industry and investor appetite sent the two precious metals on a blistering rally in Jul

Soybean futures increased by 2.58% this week on continued signs of demand for US supplies and on expectations that hot temperatures will return to the US Midwest next week. A lower US dollar also boosted soybean prices as it makes domestic agricultural exports more affordable for foreign buyers

TOCOM rubber futures fell by 3.16% in the week ended Jul 29, largely hurt by an appreciating yen and indicating the effort to boost natural rubber prices by the three top Asian producers has met with a limited success

ICE orange juice futures fell by 3.32% during the week and hit the stop-loss limit as traders turned their attention to America’s diminishing demand for the commodity

Last Close 5 Day % 1 Mth. % YTD % 1 Year %

Brent – ICE 42.46 -7.07 -16.10 13.89 -20.35

WTI – Nymex 41.60 -5.86 -16.60 12.31 -14.26

Gold Spot 1,351.00 2.16 2.42 27.28 24.11

Silver Spot 20.34 3.59 11.16 46.75 37.83

Copper - CMX 222.15 -0.56 1.74 4.05 -6.54

S&P GSCI Spot Index

339.40 -2.76 -10.76 8.90 -11.54

Baltic Dry Index 656.00 -8.64 2.50 37.24 -40.36

WTI Crude – 1 year performance GOLD – 1 year performance

Source: Bloomberg, Mashreq Private Banking

COMMODITIES

Source: Bloomberg, Mashreq Private Banking

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US 10-year yield fell 11.3 basis points (bps) this week to 1.45% as oil futures declined, stoking demand for US debt. Meanwhile, US Federal Reserve elected to keep its benchmark interest rate unchanged at 0.25% on Jul 27, citing that near-term risks to the economic outlook have diminished and the job market is improving

Bank of Japan (BoJ) held its key interest rate steady at -0.1% on Jul 29 while increasing the purchases of Exchange-Traded Funds. The BoJ Governor Haruhiko Kuroda said the economy is likely to expand moderately as a trend

Colombian Central Bank raised its benchmark interest rate by 0.25% to 7.75% for the 11th consecutive month on Jul 29. However, authorities indicated inflation was showing signs of easing, potentially relaxing the need for further monetary tightening

Russia’s central bank kept its key interest rate unchanged at 10.5% on Jul 29, though signaling rate cuts in the later part of 2016 as its main concern inflation slowed substantially to 7.2%, though remaining above its 4% target

Hungary’s central bank left its benchmark interest rate unchanged at a record low 0.9% on Jul 26, in line with policy makers’ guidance to focus on unconventional tools for any future monetary easing

Nigeria's central bank raised benchmark rate by 200 bps to 14% on Jul 26, in a bid to underpin its battered currency and attract more investment

Last Close 5 Day % 1 Mth. % YTD % 1 Year %

USD-10yr 1.45 -7.23 -4.12 -35.97 -35.67

USD-2yr 0.66 -6.70 2.92 -37.44 -9.91

Fed Funds Rate 0.40 0.00 -2.44 100.00 185.71

USD-3m Libor 0.76 5.28 17.49 23.89 152.95

USD-6m Libor 1.11 6.44 21.68 31.38 131.65

German-10yr -0.12 296.67 -5.56 -118.92 -118.31

UK-10yr 0.69 -14.16 -27.82 -65.05 -65.16

Japan-10yr -0.20 -14.10 -18.07 -175.00 -148.15

AED-3m EIBOR 1.15 2.48 2.22 9.03 51.33

AED-6m EIBOR 1.41 2.46 5.82 15.37 54.08

US 10 year Generic Yield – 1 year performance UK 10 year Generic Yield – 1 year performance

Source: Bloomberg, Mashreq Private Banking

INTEREST RATES

Source: Bloomberg, Mashreq Private Banking

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Ref Country Weekly Change Weekly Change

(USD Adj.)

1 Saudi Arabia -4.02% -4.03%

2 Norway -2.72% -1.50%

3 Singapore -2.60% -1.49%

4 Colombia -1.85% -5.82%

5 Poland -1.85% -0.01%

6 Mexico -1.84% -2.85%

7 China -1.11% -0.55%

8 Estonia -1.09% 0.62%

9 Czech Republic -1.08% 0.60%

10 Israel -1.06% -0.35%

Ref Country Weekly Change Weekly Change

(USD Adj.)

1 Egypt 7.99% 7.95%

2 Turkey 5.11% 7.94%

3 Serbia 4.01% 6.24%

4 Luxembourg 3.98% 5.78%

5 Venezuela 3.87% 3.87%

6 Peru 3.04% 2.15%

7 Kenya 2.79% 3.05%

8 Slovenia 2.32% 4.09%

9 Mauritius 2.12% 2.37%

10 Portugal 2.09% 3.86%

WEEKLY

Ref Country YTD Change YTD Change (USD Adj.)

1 Peru 54.45% 57.24%

2 Argentina 35.36% 16.57%

3 Brazil 32.20% 61.48%

4 Kazakhstan 23.65% 19.71%

5 Russia 22.53% 22.53%

6 Pakistan 20.45% 20.48%

7 Namibia 20.13% 33.86%

8 Thailand 18.33% 22.51%

9 New Zealand 16.63% 22.89%

10 Hungary 15.50% 20.47%

YTD

Ref Country YTD Change YTD Change (USD Adj.)

1 Italy -21.34% -19.24%

2 Zambia -18.08% -12.09%

3 China -15.82% -17.74%

4 Ireland -13.61% -11.29%

5 Japan -12.95% 2.23%

6 Venezuela -11.12% -44.01%

7 Portugal -10.64% -8.25%

8 Spain -10.03% -7.62%

9 Ghana -9.96% -13.48%

10 Greece -9.51% -7.08%

EQUITY MARKETS - TOP MOST & BOTTOM MOST

Source: Bloomberg, Mashreq Private Banking

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Ref Commodity Weekly Change

1 Lean Hogs -8.37%

2 Brent Crude -7.07%

3 Gasoil -6.07%

4 WTI Crude -5.86%

5 Rough Rice -4.47%

6 Wheat -4.12%

7 Heat Oil -3.65%

8 Orange Juice -3.32%

9 Lumber -3.25%

10 Rubber -3.16%

Ref Commodity Weekly Change

1 Platinum 6.14%

2 Palladium 3.68%

3 Silver 3.59%

4 Natural Gas 3.56%

5 Coffee 3.03%

6 Live Cattle 2.84%

7 Soybeans 2.58%

8 Cotton 2.26%

9 Gold 2.16%

10 Nickel 2.11%

WEEKLY

Ref Commodity YTD Pct Change

1 Silver 46.75%

2 Zinc 39.40%

3 Bean Meal 32.43%

4 Platinum 28.83%

5 Gold 27.28%

6 Steel Rebar 27.27%

7 Palladium 26.15%

8 Sugar 25.00%

9 Rubber 24.92%

10 Orange Juice 24.75%

YTD

Ref Commodity YTD Pct Change

1 Live Cattle -16.73%

2 Feeder Cattle -16.09%

3 Rough Rice -14.05%

4 Wheat -13.24%

5 Cocoa -11.71%

6 Corn -6.76%

7 Palm Oil -1.00%

8 Soybean Oil -0.65%

9

10

COMMODITY MARKETS - TOP MOST & BOTTOM MOST

Source: Bloomberg, Mashreq Private Banking

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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.