DAILY MARKET REPORT

04.10.2017

INTERNATIONAL MARKETS

Index Last Change DJIA 22,641.67 84.07 S&P 500 2,534.58 5.46 NASDAQ 6531.714 15.00 NIKKEI 20,598.42 15.65 HANG SENG 28,369.19 195.98 DJ EURSTOXX 50 3,605.73 3.04 FTSE 100 7,468.11 29.27 CAC 40 5,367.41 16.97 DAXX 12,902.65 73.79

 US  Dow notches 5-day winning streak as stocks close at record highs  US Treasury yields mixed after key remarks from Fed's Powell

U.S. stocks closed higher on Tuesday, building on strong gains from their previous session. The Dow Jones industrial average rose 84.07 points to 22,641.67, setting intraday and closing records, with 3M contributing the most to the gains. The 30- stock index also posted a five-day winning streak. The S&P 500 finished 0.2 percent higher at 2,534.58 and notched a record close; it also rose for the sixth straight session. Airline stocks Delta and United Continental were the best performers in the S&P, advancing 6.6 percent and 6.1 percent, respectively. The Nasdaq composite advanced 0.2 percent to close at 6,531.71, and also hit a record high. Stocks posted record highs across the board on Monday, led by strong gains in health care and financials. While some experts have expressed concern over equity valuations, billionaire Warren Buffett said they made sense given where interest rate are. Buffett said rates have been a "powerful factor" in equity values. The has raised interest rates twice this year, with investors largely expecting a third rate hike in December, according to the CME Group's FedWatch tool. Treasury yields fell on Tuesday. The short-term two-year yield slipped to 1.47 percent, while the benchmark 10-year yield fell to 2.33 percent. In economic news, monthly auto sales data were being released throughout the day. General Motors, Ford, and Fiat Chrysler were among the automakers who reported better-than-expected sales. U.S. government debt yields were mixed Tuesday as investors turned their attention to the latest comments from a governor at the U.S. Federal Reserve. The yield on the benchmark 10-year Treasury note sat lower at 2.332 percent at 1:07 p.m. ET, while the yield on the 30-year Treasury bond was up at 2.877 percent. Bond yields move inversely to prices. Looking to the U.S. central bank, Fed Governor Jerome Powell delivered remarks at a Conversation on U.S. financial regulation. The governor was confident watchdogs would reach an agreement to significantly reduce the burden of the so-called Volcker Rule

banning banks from speculating with their own money, according to Reuters. In addition to interviewing former Fed Governor Kevin Warsh last week for the position of Federal Reserve chairman, President also has spoken to Powell in recent weeks, according to a report Friday afternoon from , which cited a White House source. One of the key stories set to dominate Tuesday is the deadly shooting in Las Vegas on Sunday night. At least 59 people were killed and more than 500 have been injured after a gunman opened fire on thousands of concertgoers at a country music festival. The incident has been categorized as the deadliest mass shooting in modern U.S. history.

EUROPE & UK  Europe ekes out gains at the close, as retail, commodity stocks rise; political concerns ease  Spanish stocks were in focus on Tuesday due to political uncertainty in Catalonia.

European stocks posted slight gains by the close on Tuesday as political concerns eased and investors digested new data releases. The pan-European Stoxx 600 fluctuated throughout trade, before closing up 0.15 percent; as most sectors reversed losses to trade up in later trade. The U.K.'s FTSE 100 closed up 0.39 percent, while France's CAC 40 popped 0.32 percent. Germany's stock exchanges, however, were closed Tuesday, for a national holiday. Looking to peripheral bourses, the Spanish IBEX was one of the few indexes to see continued pressure throughout trade, closing just 0.02 percent up at the close, as political uncertainty in Catalonia lingered. Concerns eased slightly after the government in Madrid said that it wants to work with other parties to resolve the issue of Catalan independence. However, the region, which accounts for about 19 percent of Spain's growth, is a massive political challenge for the country, Fitch said. In the U.K., disappointing data had weighed on stocks in early trade, however a rise in London-listed basic resources and retail stocks allowed the FTSE to recover. The purchasing managers' index for the construction sector dropped to 48.1 from 51.1 the previous month, the first decline in activity in more than a year. Meanwhile, minutes from the Bank of England's last financial policy committee meeting revealed concerns over Brexit. The decision to leave the European Union increases risks for British companies borrowing from European banks, they showed. Looking across the European benchmark, British firm Ferguson closed up 4 percent. This comes after it announced a £500 million ($663 million) share buyback due to higher profits. Meanwhile, shares of Electrocomponents jumped 5.4 percent, after it issued a trading update on Tuesday, which stated that the company's "good start" in the first quarter, had "continued into Q2". Siemens Gamesa rose 5.18 percent after it landed a new contract for the supply of 13 turbines in China. Multinational advertising and PR firm WPP however fell some 2 percent. This comes after sold 22.5 million shares in an accelerated bookbuild offering, according to Reuters. Ericsson, Iberdrola and BAE Systems all fell deep into the red as well, after receiving rating downgrades. In sector news, retail rose almost 1 percent as a whole, with French and British retailers in particular posting strong gains, including Casino Guichard, Carrefour and Sainsbury's. This comes after a report by newspaper Le Monde — which cited its own sources — stated that Amazon had approached a number of French supermarket operators. Looking to commodities, oil and basic resources each posted solid sector gains Tuesday, with oil firm Tullow Oil jumping 3.8 percent and metal prices posting gains. Despite a rise in metal prices and commodity stocks, crude pricesremained under pressure around the European market close.

 ASIA  Asia mixed in morning trade ahead of Reserve Bank of India policy decision  Japan Display puts OLED panels at center of comeback plan

Asia markets traded mixed on Wednesday, even after U.S. equities closed higher overnight. In Japan, the Nikkei 225 was up 0.24 percent at 20,664.15 in morning trade and the Topix index advanced 0.13 percent. Fast Retailing shares were up 0.94 percent after reports said same-store sales at its Uniqlo retail outlets in the country rose 6.3 percent on-year in September. Meanwhile, shares of Japan Display rose 23.53 percent following a report from the Nikkei business daily that the company intends to begin mass production of small OLED panels for smartphones as early as 2019. Its affiliate, JOLED, has plans to begin printing midsize and large OLED panels for industrial equipment and televisions, Nikkei said. The Japan business daily also said Japan Display began looking for a partner with which to split its smartphone panel investment that is expected to be more than $1.77 billion. Elsewhere, Hong Kong's Hang Seng index was up 0.88 percent at 28,421. Singapore's Straits Times index fell 0.26 percent. Australian stocks slipped, with the benchmark ASX 200 down 0.71 percent at 5,660.70 in late- morning trade. The energy subindex was down 1.48 percent and the heavily-weighted financial sector fell 0.8 percent. Major Australian banking stocks were lower, with ANZ shares tumbling 1.51 percent, Westpac off 1.15 percent and the National Australia Bank lower by 1.08 percent. Markets in China and South Korea remain closed for public holidays. Meanwhile, the Reserve Bank of India's (RBI) monetary policy decision is due on Wednesday. Many analysts expect the central bank to stay on hold, keeping the repo rate at 6 percent. A Reuters poll found that, though the RBI is set to leave the repo rate unchanged, many economists believe the central bank may downgrade its growth forecast following the implementation of the new goods and services tax in the country. The Indian rupee will be in focus. The currency last fetched 65.48 per dollar, compared to levels above 65.8 reached in the previous week. Elsewhere in the currency market, the dollar index, which measures the greenback against a basket of currencies, traded at 93.408, slipping fractionally from yesterday's levels near 93.600. Meanwhile, the Japanese yen traded at 112.64 per dollar, strengthening from levels near 113.1 in the previous session. The Australian dollar, for its part, climbed from levels near $0.78 in the last session to trade at $0.7862 on Wednesday late morning.

DOMESTIC MARKET

Stocks Last Close Change Volume SOLIDERE A 8.14 8 0.14 2480 SOLIDERE B 8.17 8.16 0.01 4992 HOLCIM 13.01 13.01 0.00 0 BLOM GDR 12.7 12.7 0.00 0 BLOM BANK 11.6 11.5 0.87 4560 AUDI GDR 5.95 5.95 0.00 0 AUDI 5.9 5.9 0.00 0 BYBLOS GDR 80 80 0.00 0 BYBLOS BANK 1.61 1.61 0.00 0

FOREIGN EXCHANGE

FX Spot NY Closing EUR 1.1769 1.1745 GBP 1.3262 1.3239 AUD 0.7861 0.7836 JPY 112.55 112.84 CHF 0.9724 0.9736 CAD 1.2468 1.2487 AMD 478.5000 478.1600 RUB 57.8676 57.9212 Commodities Spot Closing GOLD 1276.58 1271.65 SILVER 16.78 16.6345 CRUDE OIL 50.1 50.42

Market Summary

Commodities

Oil dips over doubts recent rally will last through fourth quarter Oil prices eased on Wednesday over caution that a price rally that lasted for most of the third quarter would not extend through the last three months of the year. U.S. West Texas Intermediate (WTI) crude oil futures were trading at $50.05 per barrel at 0032 GMT, down 37 cents, or 0.7 percent, from their last close. Brent crude futures, the international benchmark for oil prices, were down 35 cents, or 0.6 percent, at $55.65 a barrel. Analysts say that a so-called market rebalancing is now well underway, meaning that demand is no longer undershooting available supply. The re-balancing is a result of strong consumption and also due to efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to cut output by around 1.8 million barrels per day (bpd) in 2017 and the first quarter of next year. Preventing prices from climbing further, however, has been rising production in the United States, which is not participating in the deal to cut output. U.S. production hit 9.55 million bpd in late September, its highest level since July 2017 and not far off its 9.61 million bpd record from June 2015.

Gold crawls up as dollar retreats Gold inched up on Wednesday after hitting a 7-week low in the previous session, as the dollar pulled back from a 1-1/2- month high against a basket of currencies. Spot gold had risen 0.3 percent to $1,275.10 an ounce by 0049 GMT. It touched its lowest since mid-August at $1,267.76 on Tuesday. U.S. gold futures for December delivery were also up 0.3 percent at $1,278 per ounce. The dollar on Wednesday shed 0.2 percent against a basket of major currencies after touching its best since mid-August on Tuesday. The three major U.S. stock indexes and the Russell 2000 posted record high closes for the second straight day on Tuesday, helped by gains in airlines and as carmakers rose after strong September vehicle sales.

FX

Dollar rally fizzles as market speculates over Trump's Fed choice

The dollar stepped back from a 1 1/2-month high against a basket of currencies on Wednesday, as the rally triggered by strong U.S. data fizzled on speculation U.S. President Donald Trump's choice for the next Fed Chair may be a less hawkish candidiate than previously thought. The dollar was capped after Politico reported that U.S. Treasury Secretary Steven Mnuchin favours Fed governor Jerome Powell over former governor Kevin Warsh. While both are seen as serious candidates to replace current Chair Janet Yellen when her term expires in February next year, Powell is seen as more dovish than Warsh, who has criticised the Fed's bond-buying programme in the past. The dollar had rallied earlier this week on speculation Warsh may be the leading candidate to replace Yellen. The dollar index stood at 93.57, off a 1 1/2-month high 93.92 touched on Tuesday following strong U.S. manufacturing figures. The euro traded at $1.1766, up 0.2 percent on the day and off Tuesday's 1 1/2- month low of $1.16955. The common currency has been also dogged by concerns over political and social turmoil in Catalonia. The dollar's rally against the yen has also stalled, with the U.S. currency unable to clear resistance around 113.25 yen in the past week. The dollar dipped 0.2 percent to 112.65 yen. The British pound dropped to $1.3222 on Tuesday, its lowest in almost three weeks after data showing a surprise contraction in the construction sector stoked worries about economic

uncertainty surrounding Britain's exit from the European Union. The currency stood at $1.3259, down 1.0 percent so far this week. The Australian dollar bounced back a tad after hitting a three-month low on Tuesday after the central bank cautioned that a higher currency would drag on the economy and inflation The Aussie fetched $0.7850, up 0.2 percent on the day and off Tuesday's low of $0.7785.

This report is published for information purposes only. The information herein has been compiled from, or based upon sources we believe to be reliable, but we do not guarantee or accept responsibility for its completeness and accuracy. This document should not be construed as a solicitation to take part in any investment, or as constituting any representation or warranty on our part. The consequences of any action taken on the basis of information contained herein are solely the responsibility of the recipient.

Creditbank - Treasury and Capital Markets Tel & Fax: +961 1 485 265 / 269