1 Reuters: U.S. employment fell in September for the first time in seven years as Hurricanes Harvey and Irma left displaced workers temporarily unemployed and delayed hiring, the latest indication that the storms undercut economic activity in the third quarter. The Labor Department said nonfarm payrolls decreased by 33,000 jobs last month amid a record drop in employment in the leisure and hospitality sector. The decline in payrolls was the first since September 2010. The department said Harvey and Irma, which wreaked havoc in Texas and Florida in late August and early September, reduced employment last month. The unem- ployment rate hit a more than 16-1/2-year low of 4.2% and annual wage growth accelerated to 2.9%. Leisure and hospitality payrolls plunged 111,000, the most since records started in 1939, as employment at restaurants and bars fell 104,700. There were also decreases in retail and manufacturing employment last month. The economy created 13,000 more jobs than previously reported in August. Harvey and Irma did not have an impact on the unemployment rate, which fell two- tenths of a percentage point from August to the lowest since February 2001. The smaller survey of households from which the jobless rate is derived treats per- sons as employed regardless of whether they missed work during the reference week and were unpaid as result. The decrease in the unemployment rate reflected a 906,000 surge in household employment, which eclipsed a 575,000 increase in the labor force. Zawya: According to ICAEW’s latest report, Middle East region is expected to remain tough, with several further squeezes on household income in 2018. How- ever, overall GDP is expected to grow by 2.4% next year and rising to 4% in 2019. The report states that any extension of OPEC’s production cut deal, which ends on 31 st March 2018 would delay the recovery. Additionally the governments across the region are unlikely to find any solace in the oil market, which looks likely to require an extension of OPEC’s production cut deal merely to stabilise prices around $45-50. The upcoming GCC VAT is expected to increase the cost of living in impacted economies by around 2.5% in 2018 and 0.5% in each year from 2019-2022. More positively, evidence is emerging that the acceleration in world trade has been felt in the Middle East region. Those economies which are the most diversified appear to be seeing the greatest benefits. Growth in the non-oil sector in the UAE accelerated to a two-and-a-half year high in August, according data released by EmiratesNBD PMI index. Meanwhile in less-diversified Saudi Arabia, the same metric has picked up through the year, but remains well below the historical norm. Zawya: Growth in the UAE’s non-oil private sector remained sharp and marked the strongest quarter recorded for two years. The latest improvement in business conditions was driven by above-average expansions in both output and new orders. The data also showed that new business from abroad slipped back to contrac- tion, indicating that the recovery was driven by domestic demand. On the price front, output charges fell, whilst input price inflation softened to a four-month low. The headline seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index eased from the 30-month high of 57.3 recorded in August to 55.1 in Sep- tember. However, growth remained strong overall and steeper than the survey’s historical average. The average in the third qu arter of 2017 was 56.1, the strong- est since the third quarter of 2015 (56.3). Firms in the non-oil private sector reported a sharp increase in output in September. The rate of growth was steep over- all and above the series’ long-run average. That said, the pace of expansion slowed from the four-month high registered in August. Employment levels continued to rise for the seventeenth month running in September. That said, job creation eased since August and was only slight overall. Data and News Source: Thomson Reuters Weekly Investment Report Sunday, October 08, 2017 Economic & Market News Indexes Last WTD (%) MTD (%) YTD (%) DJI 22,773.67 1.65% 1.65% 15.24% S&P 500 2,549.33 1.19% 1.19% 13.87% NASDAQ 6,064.57 1.43% 1.43% 24.69% STOXX Europe 600 389.47 0.34% 0.34% 7.76% FTSE 100 7,522.87 2.04% 2.04% 5.32% DAX 12,955.94 0.99% 0.99% 12.85% CAC 40 5,359.90 0.56% 0.56% 10.23% Nikkei 225 20,690.71 1.64% 1.64% 8.25% SENSEX 31,814.22 1.70% 1.70% 19.48% Shanghai Composite 3,348.94 -0.11% -0.35% 7.90% Hang Seng 28,458.04 3.28% 3.28% 29.35% Commodities & FX Last WTD (%) MTD (%) YTD (%) Oil (Brent) 55.62 -3.34% -3.34% 49.20% Natural Gas 2.86 -4.79% -4.79% 22.51% Gold 1275.30 -0.30% -0.30% 20.21% Silver 16.78 1.05% 1.05% 21.32% EURUSD 1.17 -0.67% -0.67% 8.04% GBPUSD 1.31 -2.49% -2.49% -11.37% USDJPY 112.63 0.14% 0.14% -6.38% USDCHF 0.98 1.02% 1.02% -2.39% AUDUSD 0.78 -0.82% -0.82% 6.79% USDCAD 1.25 0.54% 0.54% -9.43% LIBOR US Dollar WoW (%) Euro WoW (%) 1 Month 1.272 0.25% -0.390 0.26% 2 Month 1.349 1.10% -0.376 -0.68% 3 Month 1.514 0.50% -0.309 -0.14% 6 Month 1.453 0.00% -0.300 0.14% 12 Month 1.736 -0.02% -0.187 0.16% Indexes Last WTD (%) MTD (%) YTD (%) Dubai (DFMGI) 3,591.10 0.76% 0.76% 1.71% Abu Dhabi (ADSMI) 4,414.16 0.38% 0.38% -2.91% Saudi (SASEIDX) 7,259.22 -0.33% -0.33% 0.68% Kuwait (KWSE) 6,662.11 -0.26% -0.26% 15.90% Egypt (EGX30) 13,881.97 -0.05% -0.05% 12.45% Qatar (DSM) 8,132.05 -2.17% -2.17% -22.08% Bahrain (BHSEIDX) 1,274.10 -0.73% -0.73% 4.40% Oman (MSM30) 5,213.49 1.48% 1.48% -9.84% TR GCC (Reuters) 195.14 0.24% 0.24% -3.68% DJ MENA 526.67 0.27% 0.26% 5.77%
Transcript
1
Reuters: U.S. employment fell in September for the first time in seven years as Hurricanes Harvey and Irma left displaced workers temporarily unemployed and
delayed hiring, the latest indication that the storms undercut economic activity in the third quarter. The Labor Department said nonfarm payrolls decreased by
33,000 jobs last month amid a record drop in employment in the leisure and hospitality sector. The decline in payrolls was the first since September 2010. The
department said Harvey and Irma, which wreaked havoc in Texas and Florida in late August and early September, reduced employment last month. The unem-
ployment rate hit a more than 16-1/2-year low of 4.2% and annual wage growth accelerated to 2.9%. Leisure and hospitality payrolls plunged 111,000, the most
since records started in 1939, as employment at restaurants and bars fell 104,700. There were also decreases in retail and manufacturing employment last month.
The economy created 13,000 more jobs than previously reported in August. Harvey and Irma did not have an impact on the unemployment rate, which fell two-
tenths of a percentage point from August to the lowest since February 2001. The smaller survey of households from which the jobless rate is derived treats per-
sons as employed regardless of whether they missed work during the reference week and were unpaid as result. The decrease in the unemployment rate reflected
a 906,000 surge in household employment, which eclipsed a 575,000 increase in the labor force.
Zawya: According to ICAEW’s latest report, Middle East region is expected to remain tough, with several further squeezes on household income in 2018. How-
ever, overall GDP is expected to grow by 2.4% next year and rising to 4% in 2019. The report states that any extension of OPEC’s production cut deal, which ends
on 31st March 2018 would delay the recovery. Additionally the governments across the region are unlikely to find any solace in the oi l market, which looks likely to
require an extension of OPEC’s production cut deal merely to stabilise prices around $45-50. The upcoming GCC VAT is expected to increase the cost of living in
impacted economies by around 2.5% in 2018 and 0.5% in each year from 2019-2022. More positively, evidence is emerging that the acceleration in world trade
has been felt in the Middle East region. Those economies which are the most diversified appear to be seeing the greatest benefits. Growth in the non-oil sector in
the UAE accelerated to a two-and-a-half year high in August, according data released by EmiratesNBD PMI index. Meanwhile in less-diversified Saudi Arabia, the
same metric has picked up through the year, but remains well below the historical norm.
Zawya: Growth in the UAE’s non-oil private sector remained sharp and marked the strongest quarter recorded for two years. The latest improvement in business
conditions was driven by above-average expansions in both output and new orders. The data also showed that new business from abroad slipped back to contrac-
tion, indicating that the recovery was driven by domestic demand. On the price front, output charges fell, whilst input price inflation softened to a four-month
low. The headline seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index eased from the 30-month high of 57.3 recorded in August to 55.1 in Sep-
tember. However, growth remained strong overall and steeper than the survey’s historical average. The average in the third quarter of 2017 was 56.1, the strong-
est since the third quarter of 2015 (56.3). Firms in the non-oil private sector reported a sharp increase in output in September. The rate of growth was steep over-
all and above the series’ long-run average. That said, the pace of expansion slowed from the four-month high registered in August. Employment levels continued
to rise for the seventeenth month running in September. That said, job creation eased since August and was only slight overal l.
Data and News Source: Thomson Reuters
Weekly Investment Report
Sunday, October 08, 2017
Economic & Market News
Indexes Last WTD (%) MTD (%) YTD (%)
DJI 22,773.67 1.65% 1.65% 15.24%
S&P 500 2,549.33 1.19% 1.19% 13.87%
NASDAQ 6,064.57 1.43% 1.43% 24.69%
STOXX Europe 600 389.47 0.34% 0.34% 7.76%
FTSE 100 7,522.87 2.04% 2.04% 5.32%
DAX 12,955.94 0.99% 0.99% 12.85%
CAC 40 5,359.90 0.56% 0.56% 10.23%
Nikkei 225 20,690.71 1.64% 1.64% 8.25%
SENSEX 31,814.22 1.70% 1.70% 19.48%
Shanghai Composite 3,348.94 -0.11% -0.35% 7.90%
Hang Seng 28,458.04 3.28% 3.28% 29.35%
Commodities & FX Last WTD (%) MTD (%) YTD (%)
Oil (Brent) 55.62 -3.34% -3.34% 49.20%
Natural Gas 2.86 -4.79% -4.79% 22.51%
Gold 1275.30 -0.30% -0.30% 20.21%
Silver 16.78 1.05% 1.05% 21.32%
EURUSD 1.17 -0.67% -0.67% 8.04%
GBPUSD 1.31 -2.49% -2.49% -11.37%
USDJPY 112.63 0.14% 0.14% -6.38%
USDCHF 0.98 1.02% 1.02% -2.39%
AUDUSD 0.78 -0.82% -0.82% 6.79%
USDCAD 1.25 0.54% 0.54% -9.43%
LIBOR US Dollar WoW (%) Euro WoW (%)
1 Month 1.272 0.25% -0.390 0.26%
2 Month 1.349 1.10% -0.376 -0.68%
3 Month 1.514 0.50% -0.309 -0.14%
6 Month 1.453 0.00% -0.300 0.14%
12 Month 1.736 -0.02% -0.187 0.16%
Indexes Last WTD (%) MTD (%) YTD (%)
Dubai (DFMGI) 3,591.10 0.76% 0.76% 1.71%
Abu Dhabi (ADSMI) 4,414.16 0.38% 0.38% -2.91%
Saudi (SASEIDX) 7,259.22 -0.33% -0.33% 0.68%
Kuwait (KWSE) 6,662.11 -0.26% -0.26% 15.90%
Egypt (EGX30) 13,881.97 -0.05% -0.05% 12.45%
Qatar (DSM) 8,132.05 -2.17% -2.17% -22.08%
Bahrain (BHSEIDX) 1,274.10 -0.73% -0.73% 4.40%
Oman (MSM30) 5,213.49 1.48% 1.48% -9.84%
TR GCC (Reuters) 195.14 0.24% 0.24% -3.68%
DJ MENA 526.67 0.27% 0.26% 5.77%
2 Data and News Source: Thomson Reuters
Zawya: Saudi Arabia has told the IMF that it is reconsidering the speed at which it imposes austerity steps to avoid slowing the economy too much and pushing
up unemployment. Riyadh has been cutting spending while raising taxes and fees to curb a huge state budget deficit caused by low oil prices. The deficit is
shrinking but at a high cost to the economy as the data released last week showed Saudi Arabia has slipped into recession during the second quarter, while the
non-oil sector expanded only 0.6% year-on-year. Consumer prices are falling and unemployment among Saudis has edged up to 12.8%. In July, the IMF forecast
growth in Saudi Arabia's non-oil sector would rise to 1.7% in 2017, but the actual growth had been weaker than expected. The IMF also said Riyadh was consid-
ering whether to impose additional fees and charges on the public, mostly aimed at luxury goods consumption or to recoup some of the cost of state services.
The fund was worried about such proposals could distract the government from more important reforms. The government is preparing aid for private sector
businesses, and the IMF's report said this would take the form of state spending on strategic industries combined with streamlining business regulations.
Reuters: Japan’s services sector expanded in September at the slowest rate in 11 months as the pace of new orders eased, though a raft of other data suggest
the economic recovery remains intact even as momentum may have ebbed slightly in the third quarter. The Markit/Nikkei survey released showed PMI fell to a
seasonally adjusted 51.0 from 51.6 in August. The new business index also showed expansion at a reduced pace, down at 52.0 in September from 52.4 in Au-
gust. In one positive sign, the index for business sentiment rose to 53.3 from 52.4 in the previous month, suggesting companies believe the lull in activity is
temporary. The composite PMI, which includes both manufacturing and services, fell to 51.7 in September from 51.9 in the previous month. Japan’s economy
grew an annualized 2.5% in April-June, which was the fastest pace of growth in more than a year thanks to gains in consumer spending and housing investment.
Zawya: Oman may be cutting government spending in a bid to bring down its deficit, but is still failing to hit its own reduction targets, according to a new report
from Fitch. The data arising from budget outturns in the first seven months of the year show that total government spending dropped by 6% in the first seven
months of the year, but this remains below the government’s own full-year target of 9%. Current spending, including subsidies, has dropped by 2% against a
target of 7%. Similarly, capital spending programme has been cut by 4%, but this is against a 9% target. Fitch said that fiscal deterioration was a key driver in
placing a negative outlook on the country’s BBB sovereign debt rating. Any further downgrade would put the country’s investment grade rating for its sovereign
debt at risk. The report said that the “relative resilience” of current spending was largely due to the country’s defence spending, which “may be difficult to cut
much due to regional security challenges”, although it added that the completion of equipment purchases in the first half of the year should see this fall during
the second half of the year. Overspending on investment and defence last year, coupled with a 17% decline in revenues, meant Oman’s budget deficit reached
20.2% of GDP last year, which was the highest of any sovereign government rated by Fitch.
Top 50 MENA Stocks by Market Capitalization — Continued (* indicates native currency; Latest data)
Weekly Investment Report
Sunday, October 08, 2017
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