1 Reuters: U.S. job growth accelerated in October after hurricane-related disruptions in the prior month, but wages grew at their slowest annual pace in more than 1-1/2 years in a sign that inflation probably will remain benign. Non-farm payrolls increased by 261,000 last month as 106,000 leisure and hospitality workers returned to work, according to official data. That was the largest gain since July 2016 but below economists’ expectations for a jump of 310,000 jobs. Data for September was revised to show a gain of 18,000 jobs instead of a decline of 33,000 as previously reported. Average hourly earnings slipped one cent in October, leaving them unchanged in percentage terms, in part due to the return of the lower-paid leisure and hospitality workers. Wages shot up 0.5% in September. They were up 2.4% on a YoY basis last month, the smallest gain since February 2016, after a 2.8% advance in the prior month. Octo- ber’s job growth acceleration reinforced the Federal Reserve’s assessment that “the labor market has continued to strengthen,” and the sluggish wage data did little to change expectations it will raise interest rates in December. Zawya: Saudi Arabia's largest banks reported a drop in loans in the third quarter as credit growth stalled due to a weaker economy, potentially putting future profits at risk. The seven largest banks reported an average drop in loans of around 4.9% at the end of September, compared to the same period of last year. Bank profit growth during the quarter has generally been in line with analysts' forecasts due to widening net interest margins and lower costs. The kingdom's economy has fallen into recession as the oil sector has stagnated and the public sector is hit by austerity policies to curb a state budget in an era of lower oil prices. The sharpest fall in loans and advances during the period was registered by Saudi British Bank , which registered a 7.3% dip from the year earlier period to SAR 116.7 billion (USD 31 billion) at the end of September. Central bank data shows outstanding bank loans to the private sector in September shrank 1.2% from a year earlier, the seventh straight month of falling bank lending. Banks were also hit by a fall in deposits during the quarter, with Banque Saudi Fransi the only one of the seven largest lenders to post a rise in deposits. Saudi banking deposits have come under strain as the govern- ment has drawn down cash parked with banks to help plug its budget deficit. Al Masah Capital: For the second week in a row, tech companies powered US markets’ with APPLE’s stellar earnings driving the markets to another set of all-time highs. The renewed expectations on OPEC extending its production cuts led oil prices to two year highs with crude reaching USD62.07 per barrel and WTI at USD55.64 per barrel. For the regional markets, five out of the eight indices ended the week on a positive note while the remaining three were net losers. Egypt came on top with +2.6% gains over the week on the back of improving economic indicators and a recent IMF declaration that Egypt’s economic growth is driven by a “broad-based” recovery across industries. Oman, Saudi, Bahrain and Qatar each advanced by +1.6%, +0.7%, +0.4% and +0.2% respectively. Kuwait was the worst performer among its peers with a -1.1% losses over the week, followed by UAE markets with Dubai losing -0.8% and Abu Dhabi -0.1%. Going into the new week, positive news-flow focusing on Emaar Development IPO (which was covered fully on the first day of the offering), and strong oil prices should have a positive effect on trading activities, although the volatile regional geo-political dynamics can always throw up a surprise. Data and News Source: Thomson Reuters Weekly Investment Report Sunday, November 05, 2017 Economic & Market News Indexes Last WTD (%) MTD (%) YTD (%) DJI 23,539.19 0.45% 0.69% 19.11% S&P 500 2,587.84 0.26% 0.49% 15.59% NASDAQ 6,295.58 1.32% 0.75% 29.44% STOXX Europe 600 396.06 0.67% 0.21% 9.58% FTSE 100 7,560.35 0.74% 0.90% 5.85% DAX 13,478.86 1.98% 1.88% 17.40% CAC 40 5,517.97 0.43% 0.27% 13.48% Nikkei 225 22,539.12 2.41% 2.40% 17.92% SENSEX 33,685.56 1.59% 1.42% 26.51% Shanghai Composite 3,371.74 -1.32% -0.64% 8.64% Hang Seng 28,603.61 0.58% 1.27% 30.01% Commodities & FX Last WTD (%) MTD (%) YTD (%) Oil (Brent) 60.49 3.51% 5.13% 62.26% Natural Gas 2.89 -0.89% -3.79% 23.79% Gold 1274.01 -0.23% -0.40% 20.09% Silver 17.12 1.24% 3.10% 23.79% EURUSD 1.16 -0.01% -0.32% 6.88% GBPUSD 1.31 -0.40% -1.57% -11.29% USDJPY 114.06 0.34% 0.39% -5.19% USDCHF 1.00 0.30% 0.30% -0.13% AUDUSD 0.77 -0.34% -0.07% 5.15% USDCAD 1.28 -0.34% -0.95% -7.79% LIBOR US Dollar WoW (%) Euro WoW (%) 1 Month 1.333 1.58% -0.391 -0.58% 2 Month 1.391 0.97% -0.378 -0.90% 3 Month 1.589 1.60% -0.316 -1.95% 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) 3,622.24 -0.79% -0.37% 2.59% Abu Dhabi (ADSMI) 4,465.15 -0.06% -0.32% -1.79% Saudi (SASEIDX) 6,956.51 0.66% 0.32% -3.52% Kuwait (KWSE) 6,548.42 -1.13% 0.53% 13.92% Egypt (EGX30) 14,319.34 2.61% -0.16% 15.99% Qatar (DSM) 8,146.23 0.22% -0.23% -21.95% Bahrain (BHSEIDX) 1,282.85 0.43% 0.48% 5.11% Oman (MSM30) 5,040.19 1.65% 0.59% -12.84% TR GCC (Reuters) 193.10 -0.72% -0.16% -4.69% DJ MENA 526.67 0.00% 0.26% 5.77%
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1
Reuters: U.S. job growth accelerated in October after hurricane-related disruptions in the prior month, but wages grew at their slowest annual pace in more than 1-1/2 years in a sign that inflation probably will remain benign. Non-farm payrolls increased by 261,000 last month as 106,000 leisure and hospitality workers returned to work, according to official data. That was the largest gain since July 2016 but below economists’ expectations for a jump of 310,000 jobs. Data for September was revised to show a gain of 18,000 jobs instead of a decline of 33,000 as previously reported. Average hourly earnings slipped one cent in October, leaving them unchanged in percentage terms, in part due to the return of the lower-paid leisure and hospitality workers. Wages shot up 0.5% in September. They were up 2.4% on a YoY basis last month, the smallest gain since February 2016, after a 2.8% advance in the prior month. Octo-ber’s job growth acceleration reinforced the Federal Reserve’s assessment that “the labor market has continued to strengthen,” and the sluggish wage data did little to change expectations it will raise interest rates in December.
Zawya: Saudi Arabia's largest banks reported a drop in loans in the third quarter as credit growth stalled due to a weaker economy, potentially putting future profits at risk. The seven largest banks reported an average drop in loans of around 4.9% at the end of September, compared to the same period of last year. Bank profit growth during the quarter has generally been in line with analysts' forecasts due to widening net interest margins and lower costs. The kingdom's economy has fallen into recession as the oil sector has stagnated and the public sector is hit by austerity policies to curb a state budget in an era of lower oil prices. The sharpest fall in loans and advances during the period was registered by Saudi British Bank , which registered a 7.3% dip from the year earlier period to SAR 116.7 billion (USD 31 billion) at the end of September. Central bank data shows outstanding bank loans to the private sector in September shrank 1.2% from a year earlier, the seventh straight month of falling bank lending. Banks were also hit by a fall in deposits during the quarter, with Banque Saudi Fransi the only one of the seven largest lenders to post a rise in deposits. Saudi banking deposits have come under strain as the govern-ment has drawn down cash parked with banks to help plug its budget deficit.
Al Masah Capital: For the second week in a row, tech companies powered US markets’ with APPLE’s stellar earnings driving the markets to another set of
all-time highs. The renewed expectations on OPEC extending its production cuts led oil prices to two year highs with crude reaching USD62.07 per barrel
and WTI at USD55.64 per barrel. For the regional markets, five out of the eight indices ended the week on a positive note while the remaining three were
net losers. Egypt came on top with +2.6% gains over the week on the back of improving economic indicators and a recent IMF declaration that Egypt’s
economic growth is driven by a “broad-based” recovery across industries. Oman, Saudi, Bahrain and Qatar each advanced by +1.6%, +0.7%, +0.4% and
+0.2% respectively. Kuwait was the worst performer among its peers with a -1.1% losses over the week, followed by UAE markets with Dubai losing -0.8%
and Abu Dhabi -0.1%. Going into the new week, positive news-flow focusing on Emaar Development IPO (which was covered fully on the first day of the
offering), and strong oil prices should have a positive effect on trading activities, although the volatile regional geo-political dynamics can always throw up a
surprise.
Data and News Source: Thomson Reuters
Weekly Investment Report
Sunday, November 05, 2017
Economic & Market News
Indexes Last WTD (%) MTD (%) YTD (%)
DJI 23,539.19 0.45% 0.69% 19.11%
S&P 500 2,587.84 0.26% 0.49% 15.59%
NASDAQ 6,295.58 1.32% 0.75% 29.44%
STOXX Europe 600 396.06 0.67% 0.21% 9.58%
FTSE 100 7,560.35 0.74% 0.90% 5.85%
DAX 13,478.86 1.98% 1.88% 17.40%
CAC 40 5,517.97 0.43% 0.27% 13.48%
Nikkei 225 22,539.12 2.41% 2.40% 17.92%
SENSEX 33,685.56 1.59% 1.42% 26.51%
Shanghai Composite 3,371.74 -1.32% -0.64% 8.64%
Hang Seng 28,603.61 0.58% 1.27% 30.01%
Commodities & FX Last WTD (%) MTD (%) YTD (%)
Oil (Brent) 60.49 3.51% 5.13% 62.26%
Natural Gas 2.89 -0.89% -3.79% 23.79%
Gold 1274.01 -0.23% -0.40% 20.09%
Silver 17.12 1.24% 3.10% 23.79%
EURUSD 1.16 -0.01% -0.32% 6.88%
GBPUSD 1.31 -0.40% -1.57% -11.29%
USDJPY 114.06 0.34% 0.39% -5.19%
USDCHF 1.00 0.30% 0.30% -0.13%
AUDUSD 0.77 -0.34% -0.07% 5.15%
USDCAD 1.28 -0.34% -0.95% -7.79%
LIBOR US Dollar WoW (%) Euro WoW (%)
1 Month 1.333 1.58% -0.391 -0.58%
2 Month 1.391 0.97% -0.378 -0.90%
3 Month 1.589 1.60% -0.316 -1.95%
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) 3,622.24 -0.79% -0.37% 2.59%
Abu Dhabi (ADSMI) 4,465.15 -0.06% -0.32% -1.79%
Saudi (SASEIDX) 6,956.51 0.66% 0.32% -3.52%
Kuwait (KWSE) 6,548.42 -1.13% 0.53% 13.92%
Egypt (EGX30) 14,319.34 2.61% -0.16% 15.99%
Qatar (DSM) 8,146.23 0.22% -0.23% -21.95%
Bahrain (BHSEIDX) 1,282.85 0.43% 0.48% 5.11%
Oman (MSM30) 5,040.19 1.65% 0.59% -12.84%
TR GCC (Reuters) 193.10 -0.72% -0.16% -4.69%
DJ MENA 526.67 0.00% 0.26% 5.77%
2 Data and News Source: Thomson Reuters
Zawya: Fitch Ratings confirmed the strength of Saudi Arabia's economy and the effectiveness of economic reforms being carried out by the government of the
Kingdom. In addition, Fitch affirmed the Kingdom's strong credit rating at ‘A+’ with stable outlook. Fitch said that Saudi Arabia’s ratings are "supported by strong fiscal and external balance sheets, including exceptionally high international reserves, low government debt, significant government assets and strong commitment
to an ambitious reform agenda." The Fitch report said central government deficit is expected to narrow to 8.7% of GDP in 2017, from 17.2% in 2016, largely as a
result of higher oil prices and because clearance of arrears that widened the 2016 deficit by 4.4% of GDP will no longer be necessary. Fitch praised the strength of the Saudi banking system, where it classified the banking sector in the Kingdom as "A", which is a very strong rating with only four countries in the world receiving
such higher rating. This in turn reflects the stable profits built on huge capital. The shares for regulatory capital from the first tranche of the sector was 17.2% at the
end of June 2017.
Reuters: Japan’s industrial output fell less than expected in September and companies expect output to rise in October, keeping the economy on an expansion path.
Labor demand remained at the strongest level in 43 years, but household spending unexpectedly fell in September, raising some concern about the lack of impact a tight jobs market had on consumer spending. The Bank of Japan is expected to signal at a policy meeting that it will hold off on expanding stimulus for the time
being, but it may still struggle to explain why economic growth is not pushing up consumer prices. Manufacturers surveyed by the trade ministry expect output to
rise 4.7% in October and fall 0.9% in November. Japan’s jobless rate held steady at 2.8% in September, data from the Internal Affairs Ministry showed, matching the median estimate. The jobs-to-applicants ratio also held steady at 1.52 in September from the previous month, showing labor demand remains at the strongest in 43
years. Household spending fell 0.3% percent in September from a year earlier in price-adjusted real terms, compared with economists’ median estimate of a 0.7%
annual increase. Economic growth has been slow to translate into higher consumer prices, which is frustrating the BOJ’s efforts to reflate the economy. Core con-sumer prices rose 0.7% in September from a year ago, well away from the BOJ’s 2% inflation target.
Zawya: The economy of the UAE will grow at a lower rate this year due to the continuation of lower oil prices, according to IMF, estimating oil prices to average USD 53 per barrel in the coming two-to-three years. The economies of the six GCC countries that include Saudi Arabia and the UAE, the Middle East’s two biggest econo-
mies, have been badly impacted by the steep decline in oil prices which began in 2014. The prices of the important commodity almost halved between June and
December 2014, but have been on a slow recovery path since the start of last year. For the UAE in general, growth in 2017 is expected to be at 1.3% and next year 3.4%. Abu Dhabi’s economy is expected to grow by only 0.3% this year, down from a growth rate of 2.8% in 2016, which is mainly due to the fact that its oil-based
GDP is predicted to contract by 2.7% this year. However, IMF said the emirate’s economy is forecasted to grow by 3.2% in 2018. The non-oil sector in Abu Dhabi and
Dubai is almost growing at the same speed, around 3%. Abu Dhabi, because of the size of the oil sector and the oil sector because of the OPEC-led agreement to reduce production and exports, went down this year. But it will recover next year.
Economic & Market News (continued)
Weekly Investment Report
Sunday, November 05, 2017
10.3 11.1
13.6
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11.7 11.6
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9.4
12.3
1.2 1.6 1.6-
2.11.1 0.8 0.9 1.5
0
4
8
12
16
Dubai Abu Dhabi Saudi Kuwait Egypt Qatar Bahrain Oman Average
PE PBMENA Market - Price Ratios
132.4
62.2 82.3
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347.7
101.6
243.9
-
161.7
0
300
600
Dubai Abu Dhabi Saudi Kuwait Egypt Qatar Bahrain Oman Average
Top 50 MENA Stocks by Market Capitalization — Continued (* indicates native currency; Latest data)
Weekly Investment Report
Sunday, November 05, 2017
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