Weekly Market Review January 3, 2016 – January 9, 2016

January 10, 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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US nonfarm payrolls rose by 292,000 in Dec while Oct and Nov payrolls were revised up showing 50,000 more jobs

Dec unemployment rate held steady at a 7-1/2-year low of 5%, showing the economy on solid ground

Wholesale inventories fell at more than expected 0.3% in Nov, pointing toward lower 4Q2015 growth

New orders for manufactured goods slipped 0.2% in Nov after a downwardly revised 1.3% gain in Oct

Consumer credit increased by $14bn in Nov after rising by a downwardly revised $15.6bn in Oct

The World Bank cut 2016 global economic growth forecast to 2.9% from earlier 3.3% on weak emerging economies

Eurozone core inflation eased to 0.8% in Dec from 0.9% in Nov and 1.0% in Oct, adds to ECB’s headache

European Commission’s economic sentiment index for the region rose to 106.8 in Dec vs.106.1 in Nov

Retail sales grew at the slowest pace in a year during Nov at 1.4% YoY after advancing 2.4% in Oct

German factory orders gained 1.5% from Oct as demand for basic goods surged the most in almost five years

Exports inched up 0.4% in Nov after falling 1.3% in Oct as demand from euro and non-euro nations rose

Markit/Nikkei Japan services PMI stood flat in Dec at 51.5 vs. 51.6 in Nov. New business index rose to 52.0 vs. 51.6

The preliminary leading index of economic activity slipped to 103.9 in Nov from 104.2 in Oct, as expected

China’s consumer inflation quickened slightly to 1.6% YoY in Dec vs. rising 1.5% in Nov, as expected

Markit/Caixin composite PMI for China turned to contraction in Dec as it slid to 49.4 from 50.5 in Nov

Brazilian inflation unexpectedly slowed to 0.96% in Dec from 1.01% in Nov due to a lower increase in food prices

Markit/Nikkei India composite PMI climbed to 51.6 in Dec from Nov’s 5-month low of 50.2, led by services activity

Chile’s consumer prices climbed 4.4% YoY in Dec as a weaker peso pushed up import costs. Prices were flat MoM

Singapore’s GDP expanded an annualized 5.7% QoQ in 4Q2015 vs. the downwardly revised 1.7% growth in 3Q2015

Markit/Emirates NBD Saudi PMI dipped to 54.4 in Dec from 56.3 in Nov due to slower rises in new orders & jobs

Markit/Emirates NBD PMI for the UAE fell to 53.3 in Dec vs. 54.5 in Nov, the slowest pace in 40 months in Dec

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 1,922.03 -5.96 -5.96 15.52 2.29

DJI 16,346.45 -6.19 -6.19 14.23 2.73

Nasdaq Comp 4,643.63 -7.26 -7.26 19.17 1.36

Euro Stoxx 600 341.35 -6.69 -6.69 14.26 3.69

FTSE 100 5,912.44 -5.28 -5.28 14.37 4.45

Dax 9,849.34 -8.32 -8.32 12.03 3.02

CAC 40 4,333.76 -6.54 -6.54 13.41 3.44

Nikkei 225 17,697.96 -7.02 -7.02 17.09 1.81

Hang Seng 20,453.71 -6.67 -6.67 10.14 4.15

Brazil - Bovespa

40,612.21 -6.32 -6.32 9.67 4.80

Russia - Micex 1,748.57 -0.73 -0.73 5.51 4.78

BSE Sensex 24,934.33 -4.69 0.00 17.20 1.48

Shanghai Comp 3,186.41 -9.97 -9.97 12.64 1.94

Source: Bloomberg, Mashreq Private Banking

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Emaar Properties hired Dubai’s DUTCO Group to restore the fire-hit Address Downtown hotel & residential tower

UAE-based Al Habtoor Group plans to launch a large real estate project worth $8.5bn in Egypt

Abu Dhabi-based Integrated Capital acquired over 5% of GFH Financial Group’s overall outstanding shares

Abu Dhabi’s Gulf Capital raised $175mn for the first closing of a new credit fund, aims for a final close of $250mn

Saudi Electricity Co. signed a &1.4bn loan deal with seven international banks to be used as a back-up credit facility

General Electric won an engineering & construction contract worth around $1bn from Saudi Electricity Company

Advanced Petrochemical Company’s 4Q2015 net profit dropped 27% from 4Q2014 to SAR146mn

Saudi Arabian Mining Co. (Ma’aden) said the recent energy reforms would reduce its profit in 2016 by around SAR120mn; Saudi Industrial Development Fund approves providing SAR4bn construction loan to Ma’aden’s unit

Saudi Arabian Oil Company (Saudi Aramco) has confirmed studying various options to list in capital markets

DUR Hospitality inked SAR120mn deal with General Authority of Civil Aviation to develop Makarem Arriyadh hotel

Qassim Cement’s bottom-line climbed 22.07% QoQ and 4.69% YoY to SAR140.5mn in 4Q2015

Al-Tayyar Travel Group Holding will acquire 30% stake in Thakher Invest. & Real Estate Develop. Co. instead of 25%

Savola Group said it plans to maintain Iranian investments despite a diplomatic rift between Iran and Saudi Arabia

Fitch assigned ‘A+’ long-term and ‘F1’ short-term Issuer Default rating to Kuwait’s Burgan Bank

A consortium comprising Japan’s Mitsui, Saudi’s ACWA Power & Dhofar International Inv. & Development Holding Co. won a $2.3bn power plant project in Oman

Bank Dhofar reportedly raised a $250mn three-year loan for the purpose of general funding

S&P said its rating and outlook on the QNB are not affected by the bank’s agreement to buy Turkey’s Finansbank

Moody’s withdrew the ‘Baa1’ insurance financial strength rating and stable outlook on Qatar Islamic Insurance Co.

King Faisal Corniche Development Co. awarded BHD42.93mn contract to Nass Contracting Company

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

Dubai 2,966.43 -5.86 -5.86 9.48 3.96

Abu Dhabi 4,134.97 -4.00 -4.00 9.03 5.53

Saudi Tadawul 6,225.22 -9.93 -9.93 10.62 4.08

Qatar Index 9,767.22 -6.35 -6.35 10.61 5.22

Kuwait Index 5,475.15 -2.49 -2.49 – 4.77

Oman MSM 30 5,365.15 -0.76 -0.76 9.42 4.88

Bahrain All Share

1,201.62 -1.17 -1.17 7.19 5.71

Egypt EGX 30 6,922.71 -1.19 -1.19 6.38 1.87

Istanbul 100 Index

70,613.20 -1.55 -1.55 8.04 3.54

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 recorded worst weekly performance against Japanese yen since Aug 2013, depreciating 2.7% as Chinese stocks and the yuan dropped sharply which spurred concerns that the Federal Reserve may have to further slow the pace of its tightening policy

Canadian dollar weakened ~2.3% against the US dollar during the past five days, pressured by a slump in the prices of industrial metals and crude oil

China’s yuan lost 1.56% in the week against the US dollar after the People’s Bank of China set the yuan’s daily reference rate at the lowest level since April 2011 on Jan 6

Brazilian real declined 1.6% against the US dollar in the first week of 2016 as pessimism surrounding China added to bearish views on Brazil’s domestic economy

Russian ruble deteriorated 3.07% with respect to the US dollar during the week ended Jan 8 as Brent oil prices, a benchmark for Russia’s main export, reached their lowest level since 2004

Indian rupee ended 0.75% down from Jan 1 against US dollar, completing its biggest weekly decline since Nov 2015 as global funds sold the nation’s stocks amid a surge in volatility

South Korean won edged down 2.16% to 1,197.84 per US dollar this week, impacted by renewed concerns about China’s growth outlook as well as North Korea’s nuclear test

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

USD Index 98.5400 -0.14 0.07 -0.09 6.68

EUR/USD 1.0922 0.61 0.28 0.55 -7.39

GBP/USD 1.4517 -1.55 -3.27 -1.49 -3.80

USD/JPY 117.2600 -2.73 -4.61 -2.46 -2.01

USD/CHF 0.9948 -0.66 0.24 -0.73 -2.32

USD/CAD 1.4172 2.29 4.32 2.41 19.79

USD/BRL 4.0248 1.62 6.01 1.62 51.17

USD/RUB 74.7475 3.07 7.61 3.07 24.33

USD/INR 66.6350 0.75 -0.30 0.73 6.32

USD/CNY 6.5948 1.56 2.76 1.56 6.13

USD/AUD 1.4382 5.02 3.80 4.80 16.82

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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Futures of global oil benchmark Brent and US West Texas Intermediate (WTI) crude slumped over 10.0% this week as China’s stock market crash reinforced concerns over prospective demand amid persisting supply glut

Gold price in the spot market jumped 4.0% in the week ended Jan 8 as investors viewed the metal as a safer investment against a backdrop of worries over China’s economy and a recent plunge in its stock market

The New York Mercantile Exchange’s (NYMEX) natural gas futures climbed 5.78% in the week after data from the US government showed stockpiles shrank by a greater-than-expected 117bn cubic feet in the week ended Jan 1

Palladium tanked 12.0% from Jan 1, hit by the recent weakness in equities and concerns over the health of Chinese economy. China is a major importer of platinum-group metals for use in auto-catalysts and jewellery

The London Metal Exchange (LME) zinc futures dropped 6.2% during the week amid more volatility in China’s financial markets and fresh signs of weakness in the economy of the world’s biggest metals consumer

The Inter Commodity Exchange (ICE) cocoa futures declined 6.0% over the week coupled with volatility, amid ongoing uncertainty about West African production prospects, responsible for the majority of world output

The Malaysia Derivatives Exchange (MDE) palm oil futures fell 5.6% during the past five days, impacted by volatile global equity markets and as narrowing discount to rival soyoil prices dented demand

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

Brent – ICE 33.55 -10.01 -16.67 -10.01 -34.16

WTI – Nymex 33.16 -10.48 -11.60 -10.48 -32.04

Gold Spot 1,104.05 4.02 2.71 4.02 -8.66

Silver Spot 13.94 0.89 -1.63 0.57 -14.83

Copper - CMX 202.20 -5.29 -1.27 -5.29 -26.99

S&P GSCI Spot Index

295.57 -5.16 -7.34 -5.16 -25.57

Baltic Dry Index 429.00 -10.25 -22.14 -10.25 -40.75

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 benchmark 10-year US Treasury note yield fell ~15 basis points (bps) to 2.12% in the week as persistent worries over the global economy and global stock markets drove investors into the safe harbor of US government debt

Benchmark bond yields fell this week after reports showed Eurozone inflation unexpectedly stalled in Dec. Bonds advanced as market turmoil from China stoked concerns that disinflationary forces will be transferred to the rest of the world. 10-year yield in Germany, Italy & Spain slid 12, seven & six bps to 0.51%, 1.53% & 1.71%, respectively

The People’s Bank of China said it would further liberalize interest rates and maintain prudent monetary policy and flexibly use monetary policy tools to keep adequate liquidity in the banking system

The Reserve Bank of India auctioned INR80bn worth of new 10-year benchmark government bond on Jan 8 at a cutoff yield of 7.59%, 13 bps lower than that of the current benchmark

Denmark’s central bank raised its main interest rate on Jan 7 to -0.65% from -0.75% as it sought to stay calibrated with recent policy moves by the European Central Bank in order to keep the Danish currency steady against euro

Romania’s central bank kept its key interest rate on hold at a record low 1.75% for the fifth straight meeting on Jan 7 as expected, and cut the minimum reserve requirements for hard currency liabilities to 12% from 14%

Saudi Arabian two-year interest rate swap rose to 2.32% on Jan 6, their highest since Jan 2009, in a sign that some investors are raising bets that KSA, pressured by low oil prices, will eventually scrap currency peg to the US dollar

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

USD-10yr 2.12 -6.78 -4.63 -6.78 4.84

USD-2yr 0.93 -11.06 0.30 -11.06 53.99

Fed Funds Rate 0.36 80.00 176.92 80.00 200.00

USD-3m Libor 0.62 0.68 26.79 0.68 144.68

USD-6m Libor 0.84 -0.16 17.15 -0.16 134.41

German-10yr 0.51 -18.28 -9.98 -18.28 0.78

UK-10yr 1.77 -9.69 -2.85 -9.69 7.53

Japan-10yr 0.22 -15.00 -29.84 -15.00 -23.26

AED-3m EIBOR 1.06 0.04 9.29 0.04 55.85

AED-6m EIBOR 1.23 0.70 10.77 0.70 45.63

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 China -9.97% -11.35%

2 Saudi Arabia -9.93% -9.98%

3 Namibia -9.03% -13.19%

4 Germany -8.32% -7.76%

5 Norway -7.84% -7.98%

6 Austria -7.34% -6.77%

7 Italy -7.23% -6.67%

8 Poland -7.21% -8.38%

9 Greece -7.19% -6.62%

10 Luxembourg -7.15% -6.59%

Ref Country Weekly Change Weekly Change

(USD Adj.)

1 Jamaica 3.96% 3.75%

2 Tunisia 2.45% 2.57%

3 Malta 1.09% 1.70%

4 Slovakia 0.90% 1.52%

5 Botswana 0.48% -1.10%

6 Kazakhstan 0.41% -2.88%

7 Ghana 0.21% 0.38%

8 Lithuania 0.21% 0.81%

9 Hungary 0.15% 0.11%

10 Latvia 0.11% 0.72%

WEEKLY

Ref Country YTD Change YTD Change (USD Adj.)

1 Jamaica 3.96% 3.75%

2 Tunisia 2.45% 2.62%

3 Malta 1.09% 1.64%

4 Slovakia 0.90% 1.46%

5 Botswana 0.48% -1.10%

6 Kazakhstan 0.41% -2.88%

7 Ghana 0.21% -0.40%

8 Lithuania 0.21% 0.76%

9 Hungary 0.15% 0.27%

10 Latvia 0.11% 0.66%

YTD

Ref Country YTD Change YTD Change (USD Adj.)

1 China -9.97% -11.35%

2 Saudi Arabia -9.93% -9.98%

3 Namibia -9.03% -13.69%

4 Germany -8.32% -7.81%

5 Norway -7.84% -8.23%

6 Austria -7.34% -6.82%

7 Italy -7.23% -6.72%

8 Poland -7.21% -8.93%

9 Greece -7.19% -6.67%

10 Luxembourg -7.15% -6.64%

EQUITY MARKETS - TOP MOST & BOTTOM MOST

Source: Bloomberg, Mashreq Private Banking

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Ref Commodity Weekly Change

1 Palladium -12.00%

2 Gasoline -11.00%

3 WTI Crude -10.48%

4 Brent Crude -10.01%

5 Lead -9.59%

6 Gasoil -9.04%

7 Zinc -6.22%

8 Coffee -6.08%

9 Cocoa -6.04%

10 Palm Oil -5.63%

Ref Commodity Weekly Change

1 Natural Gas 5.78%

2 Gold 4.02%

3 Wheat 1.81%

4 Bean Meal 1.36%

5 Soybeans 0.95%

6 Silver 0.89%

7 Rough Rice 0.43%

8 Lean Hogs 0.08%

9

10

WEEKLY

Ref Commodity YTD Pct Change

1 Natural Gas 5.78%

2 Gold 4.02%

3 Wheat 1.81%

4 Bean Meal 1.36%

5 Soybeans 0.95%

6 Silver 0.57%

7 Rough Rice 0.43%

8 Lean Hogs 0.08%

9

10

YTD

Ref Commodity YTD Pct Change

1 Palladium -12.10%

2 Gasoline -11.00%

3 WTI Crude -10.48%

4 Brent Crude -10.01%

5 Lead -9.59%

6 Gasoil -9.04%

7 Rubber -8.35%

8 Zinc -6.22%

9 Coffee -6.08%

10 Cocoa -6.04%

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.