Weekly Market Review December 21, 2014 – December 27, 2014

December 28, 2014

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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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US economy grew 5% YoY in 3Q2014, up from an earlier estimate of 3.9%, led by consumer & business spending

Thomson Reuters/University of Michigan consumer sentiment index jumped to 93.6 from 88.8 in Nov

Overall durable goods orders unexpectedly fell 0.7% in Nov, suggesting a slow down in economic growth

Personal consumption expenditure inflation slowed to 1.2% YoY in Nov from 1.4% YoY in Oct

Initial jobless claims fell by 9,000 to a seasonally adjusted 280,000 for the week ended Dec 20

European Commission said Euro zone consumer confidence edged up to -10.9 in Dec from a revised -11.5 in Nov

Britain’s 3Q2014 growth was revised down to 2.6% from 3% YoY, hurt by lower investment and higher imports

French public debt rose to 95.2% of GDP in 3Q2014 at €2,031bn from 95.1% of GDP in 2Q2014 at €2,024bn

Bank of Spain raised 2014 GDP growth estimate from 1.3% to 1.4% on optimism falling oil prices will aid growth

Japan’s government approved $29bn fiscal stimulus package to boost the economy

Japan's core consumer inflation stood at 0.7% in Nov vs. 0.9% in Oct, far below Bank of Japan's 2% target

Factory output slid 0.6% in Nov after two straight months of gains

Chinese industrial profits dropped 4.2% YoY in Nov to $108.85bn, the biggest annual decline since Aug 2012

Chinese labor ministry said economy created more than 13mn new jobs in 2014, despite slower economic growth

S&P revised Russia’s rating to creditwatch negative from negative, warning it could be downgraded to speculative

Russian Foreign Minister forecasted economy to shrink by 4% in 2015 if oil averaged at $60/barrel

Brazil’s central bank lowered 2014 growth forecast to 0.2% from earlier 0.7%, lifted 2015 inflation forecast to 6.1%

Canada’s economy grew 0.3% in Oct after expanding 0.4% in Sept, led by an unexpected surge in manufacturing

Saudi Arabian spending in 2015 budget is projected at SR860bn, up 0.6% from 2014, despite plunging oil prices

South Korea cuts 2015 growth forecast to 3.8% from 4%, citing weaker-than-expected domestic demand

Serbia adopted 2015 budget curtailing spending on pension & unprofitable public cos. to secure €1bn IMF loan

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

Source: Bloomberg, Mashreq Private Banking

INTERNATIONAL EQUITY MARKETS

Last Close Change 5 Day % YTD %

S&P 500 2,088.77 18.12 0.88 13.01

DJI 18,053.71 248.91 1.40 8.91

Nasdaq Comp 4,806.86 41.48 0.87 15.09

Euro Stoxx 600 343.89 3.59 1.05 4.76

FTSE 100 6,609.93 64.66 0.99 -2.06

Dax 9,922.11 135.15 1.38 3.87

CAC 40 4,295.85 54.20 1.28 0.00

Nikkei 225 17,818.96 197.56 1.12 9.38

Hang Seng 23,349.34 232.71 1.01 0.18

Brazil - Bovespa 50,144.63 493.65 0.99 -2.65

Russia - Micex 1,417.80 -31.33 -2.16 -5.74

BSE Sensex 27,241.78 -130.06 -0.48 28.68

Shanghai Comp 3,157.60 49.01 1.58 49.23

Source: Bloomberg, Mashreq Private Banking

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Nakheel invited bids for the construction of 1,439 villas in Dubai, estimated to be worth $680mn

Mashreq Bank acted as sole lead arranger and book runner for India-based Jet Airways' $150mn loan

Ducab Aluminuim begins construction of its new aluminum rod and conductor facility costing AED220mn

Omniyat Group’s ANWA project in Dubai sold 81% of its units in less than a week recording AED432mn in sales

RAK Ceramics said it will sell its Sudan business and raise annual sanitary ware capacity in UAE by 500,000 pieces

Doha Bank signed an AED500mn 5 year financing deal with Sobha Group of Dubai

Saudi Aramco and Total Refining & Chemicals Saudi Arabia decided to increase SATORP’s capital by SR1.125bn

Saudi Telecom Company will book gain amounting to SR621mn in 4Q2014 related to land expropriation in Riyadh

Saudi Industrial Investment Group recommended SR1/share dividend, totaling SR450mn for the financial year 2014

Saudi British Bank proposed capital increase by SR5bn & cash dividend of SR1.05/share for 2014 totaling SR1.05bn

Sahara Petrochemical Co. recommended SR0.85/share dividend for 2014 amounting SR372.98mn

Qatar-based Nebras Power plans to spend $14bn to develop coal mines in Turkey

Qatar-based Gulf Warehousing Co. seeks to raise around QR476mn through rights issue

US-based Dairy Queen, fast food and ice cream seller, re-enters Kuwait and plans more than 20 outlets over 5 years

Oman Electricity Transmission Company signs six power transmission agreements worth OMR88mn

Oman Power & Water Procurement awarded $250mn seawater desalination project to Singapore-led consortium

Oman's Bank Dhofar plans to raise $300mn to boost its capital in 2015 and issue up to $500mn of senior non-capital debt instruments in the next four years to support growth

Bahrain-based Global Investment House reduced its paid-up capital by 54.2% from KD174.6mn to KD79.9mn

Fitch revised outlook on Bank of Bahrain & Kuwait and National Bank of Bahrain to Negative from Stable

Last Close Change 5 Day % YTD %

Dubai 3,886.94 460.24 13.43 15.35

Abu Dhabi 4,536.55 171.36 3.93 5.74

Saudi Tadawul 8,749.34 428.79 5.15 2.50

Qatar Index 12,449.05 1,267.40 11.33 19.94

Kuwait Index 6,577.81 347.72 5.58 -12.87

Oman MSM 30 6,433.82 749.14 13.18 -5.86

Bahrain All

Share 1,413.91 23.95 1.72 13.22

Egypt EGX 30 8,740.12 340.23 4.05 28.86

Istanbul 100

Index 84,947.31 1,373.76 1.64 25.29

Source: Bloomberg, Mashreq Private Banking

DFMGI – 1 year performance Saudi Tadawul – 1 year performance

GCC EQUITIES

Source: Bloomberg, Mashreq Private Banking

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US dollar appreciated 0.4% in the week to 1.2183 dollars per euro, gaining for the second week as US GDP registered biggest advance since 3Q2003 and jobless claims dropped to the fewest since November

Japanese yen weakened 0.7% in the week to 120.31 per dollar after consumer price inflation slowed for a fourth month and real wages declined the most since 2009

Brazil’s real climbed 0.4% in the week to 2.6692 per dollar on speculation the central bank will signal support for the currency when it announces details on the extension of swap offerings into 2015

Russian ruble advanced 10.3% in the week to 53.5 per dollar as central bank limits on ruble liquidity created a cash squeeze that boosted demand for the local currency, while policy makers introduced measures to curb banks’ need for dollars

Indian rupee depreciated 0.4% in the week on speculation importers stepped up dollar purchases to meet month-end payments and as US economic data bolstered the case for the Federal Reserve to raise interest rates

South Korea’s won strengthened 0.3% in the week to 1,098.74 per dollar amid speculation exporters sold dollars to convert overseas earnings as year-end approaches

Last Close Change 5 Day % YTD %

EUR/USD 1.2183 -0.0046 -0.38 -11.35

GBP/USD 1.5558 -0.0068 -0.44 -6.03

AUD/USD 0.8121 -0.0009 -0.11 -8.93

USD/JPY 120.3100 0.8100 0.68 14.24

USD/CHF 0.9875 0.0032 0.33 10.59

USD/CAD 1.1627 0.0027 0.23 9.45

USD/BRl 2.6692 0.0097 0.36 13.00

USD/RUB 53.5001 -6.1167 -10.26 62.76

USD/INR 63.5687 0.2687 0.42 2.86

USD/CNY 6.2130 -0.0081 -0.13 2.62

DXY Index 90.0300 0.4320 0.48 12.49

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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WTI crude futures lost 4.2% in the week, its fifth consecutive weekly drop, as traders speculated that Saudi Arabia wouldn’t move to cut production until oil prices fell to $40 a barrel

Gold spot fell marginally in the week as good US economic data boosted speculation the Federal Reserve will start increasing interest rates soon. Higher rates weigh on no -interest-bearing bullion

Copper futures declined 2.4% in the week as investors turned skeptical on China’s latest steps to kick-start its economy. China accounts for some 40% of the world’s copper consumption

Palm oil futures gained 4.85% in the week as severe monsoon flooding in Malaysia is likely to cause a bigger-than-expected disruption to crude palm oil production in the world's number 2 producer

Wheat futures on Chicago Board of Trade fell 6.79% in the week, after it reached seven-month highs last week as Russia made an anticipated announcement to restrict exports

Last Close Change 5 Day % YTD %

Gold spot 1,196.00 -0.35 -0.03 -0.80

Silver spot 16.07 -0.01 -0.06 -17.44

Copper-CMX 281.40 -7.05 -2.44 -16.03

Brent - ICE 59.45 -1.93 -3.14 -43.60

WTI - Nymex 54.73 -2.40 -4.20 -39.99

S&P GSCI Spot

Index 429.16 -11.55 -2.62 -32.13

Baltic Dry Index 782.00 -21.00 -2.62 -65.66

WTI Crude – 1 year performance GOLD – 1 year performance

Source: Bloomberg, Mashreq Private Banking

COMMODITIES

Source: Bloomberg, Mashreq Private Banking

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The 10-yr US yield rose 8.8 bps in the week to 2.25% as low inflation, higher yields relative to other sovereign borrowers and persistent global turmoil enhanced the allure of the securities

Spain’s treasury said net debt issuance will be €55bn in 2015, €8bn higher than the one announced in September

Yield on 10-yr Japanese government bond hit a record low of 0.3% in the week and closed 2.6bps down at 0.33% as BoJ bought yen 400bn in the 5-10 year zone under its massive asset purchase program

China’s benchmark 7-day repurchase rate tumbled 120bps in the week to 4.73% after cash locked up to buy new shares returned to the banking system

Indian government bond fell and 10-yr yield touched the highest of 7.99% since Dec 17 before closing at 7.98% as auction cut-offs set by the Reserve Bank of India (RBI) disappointed the market

Russian Central Bank would provide $20.4bn at a three-month credit auction secured by non-marketable assets on Jan 12 to alleviate shortage of rubles in the money market

Last Close Change 5 Day % YTD %

USD-1w Libor 0.13 0.0010 0.76 2.86

USD-3m Libor 0.26 0.0045 1.79 4.27

USD-6m Libor 0.36 0.0074 2.11 2.70

USD-10yr 2.25 0.0881 4.08 -25.70

AED-1m EIBOR 0.39 0.0000 0.00 -14.60

AED-3m EIBOR 0.68 -0.0071 -1.04 -16.70

AED-12m EIBOR 1.02 0.0000 0.00 -14.23

UK-10yr 1.88 0.0310 1.68 -37.76

Japan-10yr 0.33 -0.0260 -7.41 -55.78

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 Cyprus -2.48% -2.85%

2 Israel -1.17% -0.98%

3 Estonia -1.15% -1.52%

4 Greece -1.07% -1.44%

5 Latvia -0.98% -1.35%

6 Ukraine -0.72% -0.69%

7 Croatia -0.67% -1.06%

8 Ghana -0.51% -0.87%

9 India -0.48% -0.90%

10 Tunisia -0.42% -0.53%

Ref Country Weekly Change Weekly Change

(USD Adj.)

1 Kazakhstan 23.86% 24.28%

2 Nigeria 13.60% 12.35%

3 Dubai−UAE 13.43% 13.43%

4 Oman 13.18% 13.18%

5 Qatar 11.33% 11.39%

6 Russia 7.88% 7.88%

7 Kuwait 5.58% 5.52%

8 Saudi Arabia 5.15% 5.13%

9 Argentina 4.38% 4.39%

10 Egypt 4.05% 3.95%

WEEKLY

Ref Country YTD Change YTD Change (USD Adj.)

1 Argentina 55.33% 18.43%

2 China 49.23% 45.41%

3 Venezuela 38.64% 38.64%

4 Egypt 28.86% 25.12%

5 India 28.68% 25.10%

6 Pakistan 26.65% 32.35%

7 Turkey 25.29% 16.08%

8 Sri Lanka 23.61% 23.23%

9 Philippine 22.01% 21.18%

10 Denmark 21.28% 7.80%

YTD

Ref Country YTD Change YTD Change (USD Adj.)

1 Russia -42.57% -42.57%

2 Greece -26.62% -34.95%

3 Portugal -24.97% -33.48%

4 Cyprus -16.75% -26.20%

5 Nigeria -16.70% -26.62%

6 Austria -14.70% -24.38%

7 Kuwait -12.87% -16.03%

8 Hungary -11.02% -26.10%

9 Malta -10.73% -20.86%

10 Latvia -10.58% -20.73%

EQUITY MARKETS - TOP MOST & BOTTOM MOST

Source: Bloomberg, Mashreq Private Banking

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Ref Commodity Weekly Change

1 Natural Gas -17.44%

2 Wheat -6.79%

3 Coffee -2.91%

4 Orange Juice -2.68%

5 Aluminium -2.62%

6 Nickel -2.01%

7 Sugar -1.93%

8 Heat Oil -1.59%

9 Feeder Cattle -1.54%

10 Copper -1.31%

Ref Commodity Weekly Change

1 Palm Oil 4.85%

2 Bean Meal 3.94%

3 Live Cattle 3.81%

4 Palladium 3.34%

5 Rubber 2.88%

6 Platinum 1.79%

7 Soybean Oil 1.79%

8 Silver 1.37%

9 Cotton 1.33%

10 Zinc 1.32%

WEEKLY

Ref Commodity YTD Pct Change

1 Coffee 52.30%

2 Feeder Cattle 28.21%

3 Live Cattle 22.49%

4 Palladium 14.21%

5 Nickel 10.32%

6 Cocoa 8.56%

7 Zinc 8.45%

8 Orange Juice 3.74%

9 Aluminium 3.37%

10 Wheat 0.91%

YTD

Ref Commodity YTD Pct Change

1 Brent Crude -46.34%

2 Gasoline -45.84%

3 WTI Crude -44.39%

4 Gasoil -42.92%

5 Heat Oil -38.00%

6 Rubber -32.34%

7 Natural Gas -28.91%

8 Cotton -27.19%

9 Steel Rebar -22.91%

10 Rough Rice -21.57%

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.