Weekly Market Review September 13, 2015 – September 19, 2015

September 20, 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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Fed refrained from raising rates on Sep 17, indicating global developments overshadowed signs of strength in US

US core retail sales gained 0.4% in Aug after rising 0.6% in Jul, pointing to underlying strength in domestic demand

Conference Board’s Leading Economic index ticked up 0.1% in Aug after a remaining flat in July

Building permits jumped 3.5% in Aug after diving 15.5% in Jul, pointing to sustained strength in housing

Factory output slid 0.5% in Aug after increasing 0.9% in Jul, highlighting manufacturing is still to pick up

OECD trimmed global growth outlook to 3.0% & 3.6% from 3.1% & 3.8% in 2015 & 2016, respectively

Eurozone Jul industrial output gained 0.6% MoM and 1.9% YoY, above forecasts pointing to a steady 3Q’15 growth

ZEW German investor confidence index dipped to 12.1 in Sep vs. 25 in Aug, hurt by weakening of emerging markets

Moody’s downgraded France’s sovereign debt rating on notch to Aa2 citing slow growth; keeps outlook stable

UK inflation edged down to zero in Aug from 0.1% in Jul, remaining much below the BoE’s 2% target amid falling oil

Japan exports growth slowed to 3.1% YoY in Aug after climbing 7.6% YoY in Jul, increasing chance of fresh stimulus

S&P lowered Japan’s credit rating to ‘A+’ from ‘AA-’; revised its outlook from negative to stable

China revealed plans to integrate and allow partial privatization of some state-owned firms as part of reforms

Fiscal spending jumped 25.9% YoY in Aug, biggest rise since Apr as Beijing tries to re-energize economy

Growth in fixed-asset investment slowed to 10.9% during Jan-Aug 2015 from 11.2% during Jan-Jul 2015

New home prices inched up 0.3% MoM in Aug; slow recovery expected as unsold homes remain in ample

Brazil proposed to cut spending by reais 26bn and raise revenue by 28bn in 2016 in order to close the budget gap

Retail sales fell 1.0% in Jul, recording a 6th straight monthly decline, dented by recession & high inflation

India’s retail inflation eased to 3.66% in Aug from a revised 3.69% in Jul, bolstering prospect of rate cut by the RBI

Russia’s retail sales dipped 9.1% YoY, real wages slumped 9.8% YoY in Aug pointing economy remains in deep slump

New Zealand’s GDP grew 0.4% QoQ in 2Q2015, below predictions as manufacturing, residential construction fell

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 1,958.03 -0.15 -4.90 16.55 2.21

DJI 16,384.58 -0.30 -8.07 14.95 2.61

Nasdaq Comp 4,827.23 0.10 1.93 21.07 1.28

Euro Stoxx 600 354.77 -0.27 3.57 15.36 3.63

FTSE 100 6,104.11 -0.22 -7.04 15.25 4.27

Dax 9,916.16 -2.05 1.13 12.34 2.99

CAC 40 4,535.85 -0.28 6.16 14.76 3.38

Nikkei 225 18,070.21 -1.06 3.55 17.03 1.64

Hang Seng 21,920.83 1.94 -7.13 10.88 3.94

Brazil - Bovespa

47,264.08 1.86 -5.49 13.13 4.21

Russia - Micex 1,710.84 -0.42 22.50 6.04 4.69

BSE Sensex 26,218.91 2.38 -4.66 16.15 1.41

Shanghai Comp 3,097.92 -3.20 -4.23 13.11 1.97

Source: Bloomberg, Mashreq Private Banking

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Nakheel signed AED2.4bn worth construction contracts with 3 firms for a mixed-use property project in Dubai; awarded AED819mn contract to two UAE-based firms for constructing ‘The Palm Tower’ in Dubai’s Palm Jumeirah

Commercial Bank of Dubai’s shareholders rejected a proposal to issue $750mn in capital boosting perpetual bonds

Etihad Airways, along with its six partners raised $700mn to be used for capex, fleet expansion & refinance

Lulu Group seeks to open 1st Indonesian store by 2015-end, to spend $300mn by 2017-end for adding more stores

FTSE added KSA to its watch list for possible inclusion in emerging markets following opening of its stock market

Saudi-based Almarai Co. completed its Sukuk issue amounting SAR1.6bn on Sep 16, 2015

Saudi Arabian Monetary Agency approved Bupa Arabia for Coop. Ins. Co’s request to raise its capital by SAR400mn

Emaar The Economic City said it extended the grace period with KSA Finance Ministry to repay SAR5bn loan by 5 yrs

Bawan Co. obtained Saudi Arabian Monetary Agency’s approval for raising its capital by SAR100mn

Advanced Petrochemical Company’s BoD recommended SAR0.75/share dividend for 3Q2015, totaling SAR123mn

Dur Hospitality purchased land worth SAR43.4mn in Jeddah to develop a new hotel with hotel apartments

Kuwait Projects Co. plans to develop a $5bn mixed-use real estate project on the outskirts of Kuwait City

Oman Shipping Co. plans to acquire 10 new vessels for $320mn, 80% of which will be financed through term-loan

Gulf Warehousing plans to raise around QAR458mn through rights issue for expansion and shoring up capital base

Barwa Bank Group’s investment banking arm, The First Investor acquired 49% stake in Shater Abbas Restaurants

QNB Group became the 1st Qatari lender to receive license by the Saudi Council of Ministers to open a branch in KSA; confirmed it is in talks to buy Kuwait Finance House’s Malaysian unit

Qatar-based Nebras Power signed deal to construct 500MW gas-powered power plant in Indonesia worth $300mn

Qatari Investors Group’s subsidiary, Alkhalij Cement plans to invest QAR800mn on a new production line

Bahrain Bourse launched Bahrain Islamic Index that includes stocks of Shari’ah compliant listed companies

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

Dubai 3,625.16 0.11 -3.94 11.44 7.18

Abu Dhabi 4,479.05 -1.29 -1.10 10.62 5.05

Saudi Tadawul 7,470.19 -3.22 -10.36 13.97 3.52

Qatar Index 11,418.68 -3.66 -7.06 12.86 4.42

Kuwait Index 5,713.99 -0.88 -12.57 - 4.52

Oman MSM 30 5,744.76 -0.97 -9.43 9.97 4.53

Bahrain All Share

1,283.65 -0.56 -10.02 - 5.34

Egypt EGX 30 7,267.52 3.24 -18.59 10.95 1.88

Istanbul 100 Index

75,099.03 5.25 -12.39 9.89 3.25

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 lost 0.5% against Japanese yen in the week after the Federal Reserve held off on raising interest rates on Sep 17 amid stubbornly low inflation, an uncertain global growth outlook and recent financial-market turmoil

Canadian dollar strengthened 0.3% against US dollar during the past five trading days after data showed inflation stood at 1.3% in Aug, the same rate as in Jul and matching forecasts and as US deferred much awaited rate hike

Offshore yuan advanced 0.4% to 6.387 per US dollar this week on speculation capital outflows from China will ease as the prospect of a 2015 interest-rate increase in the US fades

Indian rupee appreciated 1.3% against US dollar in the week ending Sep 18 as the Fed’s decision to hold US interest rates was seen as paving way for the Reserve Bank of India to ease its monetary policy later in Sep 2015

Brazil’s real depreciated 1.9% against US dollar since Sep 11 on speculation President Dilma Rousseff’s proposal to rein in the budget deficit will fail given her lack of support in Congress, raising risk of further rating downgrade

Australian dollar advanced 1.4% against US dollar this week after the Reserve Bank of Australia Governor Glenn Stevens watered down speculation of a rate cut following the US Fed's decision to push back its rate hike

Malaysian ringgit strengthened 2.8% to 4.1965 per US dollar, posting its 1st weekly advance in 3 months after the US refrained from raising interest rates and an improvement in crude improved prospects for the net oil exporter

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

USD Index 94.8630 -0.35 -2.24 5.09 12.50

EUR/USD 1.1298 -0.35 2.49 -6.61 -12.57

GBP/USD 1.5536 0.69 -0.80 -0.26 -5.25

USD/JPY 119.9800 -0.51 -3.56 0.17 10.39

USD/CHF 0.9690 -0.02 -0.84 -2.54 3.77

USD/CAD 1.3226 -0.29 1.28 13.81 20.96

USD/BRL 3.9454 1.93 13.79 48.46 66.83

USD/RUB 66.4950 -2.21 1.02 9.48 72.84

USD/INR 65.6738 -1.30 0.55 4.17 7.94

USD/CNY 6.3643 -0.17 -0.47 2.56 3.63

USD/AUD 1.3905 -1.40 2.08 13.61 25.00

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 crude futures ended 1.4% down during the week while US crude futures rose marginally as the US Federal Reserve decision not to hike interest rates sparked off fears of widespread global economic slowdown

Spot gold prices firmed 2.8% in the week ended Sep 18 as the US central bank’s concern about soft global economic growth burnished the case for investing in safe-haven precious metals

Copper futures on the London Metal Exchange declined 2.6% in the week as market interpreted the move by US Fed to hold interest rate this time as an indication of global economic weakness, particularly in China

CBoT wheat futures edged up 2.4% this week as a recent wheat tender by Egypt, the world's largest wheat importer, was seen as an evident of sufficient world demand which shore up prices

ICE sugar futures slumped 6.0% from Sep 11, pressured by a weak Brazilian currency as well as concerns about better weather in Brazil and the potential sugar exports from India

Cocoa futures moved up 1.9% past week, boosted by concerns that dry weather could curb production in top grower Ivory Coast in the upcoming 2015-16 season

Baltic dry index surged 17.4% in the week amid speculation that Chinese iron ore purchasing is eroding the supply of vessels to collect the raw material from Brazil

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

Brent – ICE 47.47 -1.39 -2.75 -17.20 -51.41

WTI – Nymex 44.68 0.11 4.83 -16.13 -51.99

Gold Spot 1,139.02 2.82 1.90 -3.87 -7.03

Silver Spot 15.18 3.89 2.01 -3.32 -18.11

Copper - CMX 239.70 -2.64 4.81 -15.17 -22.49

S&P GSCI Spot Index

357.59 -1.62 -1.29 -14.48 -38.75

Baltic Dry Index 960.00 17.36 -8.22 22.76 -11.85

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 bond yield slipped 5.5 bps in the week to 2.1% after the US central bank kept its key rate in a range of zero to 0.25% on Sep 17, which stoked concerns about global growth and fueled demand for safe investments

UK 10-year bond remained flat at 1.83% as financial markets scaled back expectations for the Bank of England to tighten monetary policy after the US Federal Reserve backed away from raising interest rates

Spanish bonds racked up the strongest weekly gains in two months on the back of the global bond rally unleashed by the Fed’s decision to keep its benchmark interest rate pinned near zero. 10-year yield slumped 16 bps to 1.94%

Indian 10-year bond yield fell 7.6 bps this week to 7.7% on expectations the Reserve Bank of India will have scope to cut its key lending rate later this month after the US Federal Reserve kept its interest rates unchanged

The Swiss National Bank kept its benchmark interest rate unchanged at a record-low of -0.75% on Sep 17 and reiterated that it is still prepared to take further action to weaken the franc

Thailand’s central bank kept its benchmark interest rate unchanged at 1.5% on Sep 16, putting the onus on government spending to support the economic recovery as the baht weakened more than 8% in the last 6 months

Indonesia’s central bank kept its main interest rate unchanged at 7.5% for a seventh month on Sep 17, underscoring constraints policy makers are facing in managing a faltering economy amid a weakening currency

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

USD-10yr 2.13 -2.50 -2.69 -1.73 -18.39

USD-2yr 0.68 -3.91 -5.61 1.99 20.89

Fed Funds Rate 0.14 0.00 -6.67 133.33 55.56

USD-3m Libor 0.35 2.34 3.68 35.02 48.05

USD-6m Libor 0.55 2.55 4.76 52.84 67.83

German-10yr 0.66 1.53 3.27 22.55 -38.67

UK-10yr 1.83 0.05 -2.40 4.21 -28.93

Japan-10yr 0.31 -9.12 -16.71 -4.04 -45.21

AED-3m EIBOR 0.83 0.00 2.85 21.94 16.06

AED-6m EIBOR 0.95 0.00 2.15 12.69 6.56

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 Venezuela -6.47% -6.47%

2 Ukraine -3.90% -3.87%

3 Slovenia -3.90% -4.24%

4 Qatar -3.66% -3.67%

5 Cyprus -3.24% -3.58%

6 Saudi Arabia -3.22% -3.20%

7 China -3.20% -3.04%

8 Argentina -3.06% -3.34%

9 Serbia -2.84% -2.86%

10 Pakistan -2.71% -2.62%

Ref Country Weekly Change Weekly Change

(USD Adj.)

1 Latvia 13.34% 12.94%

2 Turkey 5.25% 6.68%

3 Mongolia 4.41% 4.54%

4 South Africa 4.32% 6.08%

5 Malaysia 4.11% 7.09%

6 Greece 3.52% 3.16%

7 Egypt 3.24% 3.25%

8 Philippine 3.19% 4.60%

9 South Korea 2.81% 4.73%

10 Kazakhstan 2.59% -3.29%

WEEKLY

Ref Country YTD Change YTD Change (USD Adj.)

1 Venezuela 243.72% 243.72%

2 Latvia 37.98% 28.85%

3 Malta 29.47% 20.91%

4 Hungary 26.96% 20.75%

5 Denmark 26.39% 17.81%

6 Jamaica 26.21% 21.99%

7 Ireland 23.78% 15.60%

8 Argentina 23.04% 11.05%

9 Slovakia 19.90% 11.97%

10 Estonia 17.50% 9.73%

YTD

Ref Country YTD Change YTD Change (USD Adj.)

1 Peru -30.53% -35.15%

2 Egypt -18.59% -25.59%

3 Colombia -17.48% -34.29%

4 Slovenia -16.61% -22.13%

5 Indonesia -16.20% -27.78%

6 Greece -15.57% -21.15%

7 Bulgaria -14.87% -20.56%

8 Singapore -14.43% -18.97%

9 Laos -13.71% -14.06%

10 Cyprus -12.63% -18.40%

EQUITY MARKETS - TOP MOST & BOTTOM MOST

Source: Bloomberg, Mashreq Private Banking

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Ref Commodity Weekly Change

1 Zinc -6.89%

2 Cotton -6.62%

3 Lumber -6.34%

4 Nickel -6.07%

5 Sugar -6.00%

6 Zinc -4.86%

7 Feeder Cattle -3.94%

8 Heat Oil -3.83%

9 Rubber -3.29%

10 Natural Gas -3.27%

Ref Commodity Weekly Change

1 Lean Hogs 5.53%

2 Coffee 4.41%

3 Gasoline 4.27%

4 Silver 3.89%

5 Ethanol 3.22%

6 Gold 2.82%

7 Rough Rice 2.78%

8 Wheat 2.37%

9 Cocoa 1.94%

10 Palladium 1.93%

WEEKLY

Ref Commodity YTD Pct Change

1 Cocoa 13.78%

2 Rough Rice 12.71%

3

4

5

6

7

8

9

10

YTD

Ref Commodity YTD Pct Change

1 Nickel -36.14%

2 Lumber -29.99%

3 Coffee -28.96%

4 Steel Rebar -24.78%

5 Sugar -24.52%

6 Palladium -23.93%

7 Zinc -22.50%

8 Tin -21.78%

9 Rubber -19.37%

10 Heat Oil -19.27%

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.