GCC mar­kets im­pacted by rift


Kuwait Times - - BUSINESS -

KUWAIT: June was a month char­ac­ter­ized by mixed per­for­mances. The MSCI All Coun­try World In­dex ended the month up 0.28 per­cent while the MSCI Emerg­ing Mar­ket In­dex also closed up 0.5 per­cent in June. In the US, equities reached new highs with the S&P 500 and Dow Jones each clos­ing up 0.5 per­cent and 1.6 per­cent, re­spec­tively, for the month while the Nas­daq Com­pos­ite In­dex was down 0.94 per­cent.

In Europe, French Pres­i­dent Macron was able to se­cure his party a par­lia­men­tary ma­jor­ity while across the English Chan­nel, UK’s May lost her party the ma­jor­ity it held in par­lia­ment. In terms of mar­ket per­for­mance, the Ger­man DAX and French CAC 40 in­dices were down 2.3 per­cent and 3.1 per­cent, re­spec­tively. In the GCC, mar­kets were im­pacted by the rift among GCC coun­tries, mainly the Qatar eq­uity mar­ket. On the com­mod­ity front, Gold closed in the red in June 2.2 per­cent. Brent also closed down 4.8 per­cent in June and reg­is­tered its low­est price year to date.


US Man­u­fac­tur­ing and Ser­vices con­tinue to shrink rel­a­tive to the pre­vi­ous month and ex­pec­ta­tions, yet re­main above the 50 marker. Pre­lim­i­nary num­bers for June is­sued by Markit show man­u­fac­tur­ing and ser­vices at 52.1 and 53.0, re­spec­tively. Ini­tial Job­less Claims came in at 244,000 for June, slightly higher than May’s read­ing. Durable Goods Or­ders, in May, continued to fall record­ing a drop of 1.1 per­cent month on month. Hous­ing Starts and Build­ing Per­mits in May showed fur­ther signs of de­cline com­ing in at -5.5 per­cent and -4.9 per­cent, re­spec­tively ver­sus April’s -2.8 per­cent and -2.5 per­cent. Fur­ther re­tract­ing in May com­pared to April is Re­tail Sales drop­ping 0.3 per­cent. Ex­ist­ing Home Sales in May in­creased to 5.62m from April’s 5.56m, an in­crease of 1.1 per­cent. New Home Sales also in­creased be­tween April and May by 2.9 per­cent to 0.610m. GDP for Q1 on an­nu­al­ized ba­sis in­creased, com­ing in at 1.4 per­cent com­pared to the pre­vi­ous read­ing of 1.2 per­cent.


The UK Man­u­fac­tur­ing Pur­chas­ing Man­agers In­dex (PMI) for the month of June came in at 54.3 com­pared to the pre­vi­ous month’s read­ing of 56.3. The Con­sumer Price In­dex in May in­creased by 0.3 per­cent on a month on month ba­sis and by 2.9 per­cent on a year on year ba­sis. Re­tail Sales, on a year on year ba­sis, in­creased by less than ex­pec­ta­tions or the pre­vi­ous month’s read­ing post­ing a slight gain of 0.9 per­cent whereas on a month on month ba­sis the read­ing was -1.2 per­cent. Gross Do­mes­tic Prod­uct for Q1 2017 re­mained con­stant at 2 per­cent on a year on year ba­sis. UK equities were down, clos­ing the month with a loss of 2.8 per­cent, as mea­sured by the FTSE 100.


On a pre­lim­i­nary ba­sis for the month of June, the Eu­ro­zone Mar­ket Man­u­fac­tur­ing PMI and Ser­vices PMI were both above the 50 marker. The pre­lim­i­nary Markit Ser­vices PMI was slightly down at 54.7 com­pared to May’s read­ing of 56.3 while the Markit Man­u­fac­tur­ing PMI was slightly above at 57.3 ver­sus 57.0. Con­sumer Con­fi­dence in June reg­is­tered at -1.3 per­cent un­changed from the pre­vi­ous month. Dur­ing the month of June, Q1 2017 Gross Do­mes­tic Prod­uct fig­ure, on a year on year ba­sis, was re­leased ex­ceed­ing ex­pec­ta­tions com­ing in at 1.9 per­cent com­pared to 1.7 per­cent. Euro­pean equities de­clined in June by 2.7 per­cent, as mea­sured by the Stoxx Europe 600.


Ja­pan’s im­ports and ex­ports for the month of May, on a year on year ba­sis, were pos­i­tive. Im­ports in­creased by 17.8 per­cent beat­ing ex­pec­ta­tions of 14.8 per­cent whereas ex­ports in­crease by 14.9 per­cent slightly be­low ex­pec­ta­tions of 16.1 per­cent. The Nikkei Man­u­fac­tur­ing PMI for the month of June, on a pre­lim­i­nary ba­sis, came in at 52.0 ver­sus May’s read­ing of 53.1. Hous­ing Starts in May on a year on year ba­sis, reg­is­tered a de­cline of 0.3 per­cent com­pared to April’s growth of 1.9 per­cent. Gross Do­mes­tic Prod­uct for Q1 2017 came in pos­i­tive al­though far be­low ex­pec­ta­tions at 1.0 per­cent ver­sus 2.4 per­cent. Ja­panese equities were up in June, as mea­sured by the Nikkei 225, in­creas­ing 2.0 per­cent.


China’s Im­ports and Ex­ports both in­creased year on year in May in dol­lar terms by 14.8 per­cent and 8.7 per­cent, re­spec­tively lead­ing to a trad­ing sur­plus of USD 40.81b. The Con­sumer Price In­dex was down 0.1 per­cent in May, yet on a year on year ba­sis was up 1.5 per­cent. Re­tail Sales in May were flat. The Caixin Man­u­fac­tur­ing PMI for the month of June was 50.4 com­pared to May’s 49.6 in­di­cat­ing the econ­omy has be­gun en­ter­ing ex­pan­sion­ary mode. Chi­nese equities, as mea­sured by the Shang­hai Stock Ex­change Com­pos­ite In­dex, re­ported a gain of 2.4 per­cent in June.


The GCC eq­uity mar­kets closed out the month of June with mixed per­for­mance. The MSCI GCC In­dex was up 4.7 per­cent in June with a year to date gain of 2.1 per­cent. Dubai and Saudi Ara­bia’s eq­uity mar­kets closed up for the month 1.6 per­cent and 8.1 per­cent, re­spec­tively. The re­main­ing GCC mar­kets were neg­a­tive for the month lead by Qatar down 8.8 per­cent, Mus­cat down 5.6 per­cent, Kuwait down 1.3 per­cent, Bahrain down 0.7 per­cent, and Abu Dhabi down 0.04 per­cent. Egypt re­ported a gain of 0.4 per­cent for the month of June.

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