Global Investment House - Weekly Report

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Global Investment House Global TowerIntersection of Shuhada Str. and Khalid Ibn Al-Waleed Str.

Global Weekly Report - International

International Markets Weekly Report

February 05, 2010

Tel. + (965) 2295-1000Fax. + (965) 2295-1299P.O. Box: 28807 Safat, 13149 Kuwait

Website:www.globalinv.net

Faisal Hasan, CFA

Head of Research

Tel: [email protected]

_____________________

Rasha I. Al-Huneidi

Assistant Vice President

Tel: 2295-1285

[email protected]

_____________________

Mohannad Al-Doohan

Assistant Financial Analyst

Tel: [email protected]

Energy/CurrenciesU.S. crude futures ended at a seven-week low on Friday, February 05, as asurging U.S. Dollar and worries about the U.S. labor market after a mixedgovernment jobs report combined to pressure energy futures. On the New YorkMercantile Exchange, March crude settled down US$1.95, or 2.67percent, at US$71.19 a barrel. Prices are down for the fourth week in a row. Inthe latest week, they fell US$1.70, or 2.33 percent. In London, March Brentcrude settled down US$2.54, or 3.52 percent, at US$69.59 a barrel.NYMEX March RBOB ended down 6.44 cents, or 3.3 percent, atUS$1.8864 a gallon, trading from US$1.8419. NYMEX March heating oil

ended down 6.04 cents, or 3.12 percent, at US$1.8747 a gallon.

OPEC oil ministers are unlikely to change output policy at their March meetingif the oil price remains around its current level of US$75 a barrel, Abdullah al-Badri, OPECs secretary general said. Oil prices, while at "reluctantly acceptable"levels, are being held up not by fundamentals of supply and demand, but byoutside factors such as the weak U.S. Dollar and speculation, Badri said. He

expects oil inventories to probably rise in the first and second quarters.

Energy Information Administration (EIA) said that commercial stockpiles ofcrude oil in the world's biggest consumer, United States, jumped by 2.3mnbarrels to 329mn barrels in the week to January 29, eclipsing analysts' forecastsfor a modest 200,000-barrel increase. Domestic gasoline stockpiles posted asurprise drawdown of 1.3mn barrels to 228.1mn barrels, instead of a projected1.3mn barrel gain forecast by analysts polled by Reuters. Inventories of middle

distillates, which include heating oil and diesel, declined 1mn barrels to 156.5mnbarrels, almost in line with the forecast 1.1mn barrel decline.

U.S. natural gas futures ended higher on Friday, February 05, backed by a bigwinter weekend storm slated for the Mid-Atlantic and cold forecasts for the nexttwo weeks, despite a sharp slide in crude and concerns about high inventoriesand a sluggish economy. March natural gas climbed 9.9 cents, or 2percent, to settle at US$5.515 per million British thermal units. The U.S. EnergyInformation Administration (EIA) report showed total domestic gas inventoriesfell last week to 2.406 trillion cubic feet (tcf), but were still 199 bcf, or 9 percent,above last year and 150 bcf, or 7 percent, above the five-year average. Earlyestimates for next week's EIA draw ranged from 159 bcf to 192 bcf, versus a 164bcf adjusted slide last year.

U.S.

The unemployment rate in the US unexpectedly dropped to 9.7 percent inJanuary and manufacturers added to payrolls for the first time in three years,which may provide a spark to revive the rest of the labor market. More than half

US ($) CloseWeekly

Performance

Y-T-D

Performace

Oil - WTI (Spot) 71.80 -1.10% -9.43%

Oil - Brent (Spot) 70.55 -1.59% -9.85%

Gold/ounce 1066.95 -1.35% -2.62%


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neutral 50 point mark for four consecutive months. The index hit a record low inFebruary last year.The Bank of England also kept rates on hold, at 0.5 percent, and halted itsquantitative easing program after 11 months of asset purchases. British consumerconfidence rose in January, a survey showed, but households showed less desireto spend than normal for the start of the year and barriers to a full recovery in

sentiment remain. The Nationwide Building Society's consumer confidence indexrose three points to 73 points in January, almost twice the low of 39 pointsrecorded in the same month last year when Britain was mired in its deepestrecession since the World War Two.A surge in manufacturing activity in January appears to confirm that the UKeconomy is pulling out of recession, underscoring the view of some analysts thatthe Bank of England is likely to soon announce a pause in its money-creatingmeasures. According to a survey released, a key measure of activity in themanufacturing sector hit a 15-year high in January. The Purchasing ManagersIndex rose to 56.7 points from 54.6 points in December, indicating that theindustrial recovery is gathering momentum. With prices also rising more rapidlythan expected, many economists believe the Bank of England is likely to call a

halt to the bond-buying program it has used to stimulate demand.The latest Purchasing Managers' Index survey for the British construction sectorshowed that the headline index rose unexpectedly in January. But the indexcontinued to stay below the neutral level of 50 points suggesting a weaker paceof activity at the start of 2010. The CIPS/Market construction PMI stood at 48.6points in January, up from 47.1 points in the prior month. Economists wereexpecting the index to fall slightly to 47 points in January. The constructionactivity recorded the smallest fall during the current twenty-three month periodof contractionA rise in output and new orders helped German manufacturing activity expand atits fastest rate since March 2008, a survey showed. Final data from the Market

purchasing managers' index (PMI) for the manufacturing sector showed a fourthstraight month of growth, with the headline indicator rising to 53.7 points from52.7 points a month earlier. Readings above 50 points denote expansion. Thefinal reading was slightly above a flash estimate of 53.4 points released lastmonth, boosting hopes that Germany is staging a steady recovery after emergingfrom its deepest post-war recession in the second quarter of 2009. Thegovernment last week raised its 2010 growth forecast to 1.4 percent from aprevious estimate of 1.2 percent and recent data suggests the recovery inGermany is gathering pace.German retail sales rose a meager 0.8 percent in December compared withNovember but were still down from a year earlier, as consumers went about theirChristmas shopping with caution, according to the Federal Statistical Office.Compared with December 2008, sales were down 2.5 percent, the office said.The results are based on preliminary data from seven German states. Retail salesfor the whole of 2009 were 1.8 percent lower than in 2008. The food, drink andtobacco retail sales for the last month of 2009 were half a percent lowercompared with December 2008. Non-food retail sales were 3.3 percent lower,with textiles, clothes, shoes and leather goods retail sales leading the decline,down 2.2 percent in December compared with the year-ago month.

JapanThe Bank of Japan said the monetary base in Japan was up 4.9 percent on year inJanuary, standing at JPY98.07tn after the 5.2 percent annual increase inDecember. The current account balance jumped 43.4 percent on year, including a38.2 percent annual increase in reserve balances. The seasonally adjustedmonetary base jumped 13.4 percent to JPY96.43tn after the revised 10.8 percentincrease in December.

Index CloseWeekly

Performance

Y-T-D

Performace

England - FTSE 100 5,060.92 -2.46% -6.50%

Germany - DAX 5,434.34 -3.11% -8.78%

France - CAC 40 3,563.76 -4.70% -9.46%

Index CloseWeekly

Performance

Y-T-D

PerformaceJapan - Nikkei 225 10,057.09 -1.38% -4.64%

Japan - Topix 891.78 -1.04% -1.74%


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Global Investment HouseGlobal Tower Website:www.globalinv.netSharq, Al-Shuhada Str. Tel. + (965) 2 295 1000P.O. Box: 28807 Safat, 13149 Kuwait Fax. + (965) 2 295 1005

Global Wealth ManagerEmail: [email protected]: +965 1 (804242)Disclaimer

This document and its contents are prepared for your personal use for information purposes only and is not an offer, or

the solicitation of an offer, to buy or sell a security or enter into any other agreement. Projections of potential risk orreturn are illustrative, and should not be taken as limitations of the maximum possible loss or gain. The informationand any views expressed are given as at the date of writing and subject to change. While the information has beenobtained from sources believed to be reliable we do not represent that it is accurate or complete and it should not be reliedon as such. Global Investment House, its affiliates and subsidiaries can accept no liability for any direct orconsequential loss arising from use of this document or its contents. At any time, Global Investment House or itsemployees may have a position, subject to change, in any securities or instruments referred to, or provide services to theissuer of those securities or instruments

ResearchFaisal Hasan, CFA(965) [email protected]

IndexRasha Al-Huneidi(965) [email protected]

Wealth Management -InternationalFahad Al-Ibrahim

(965) [email protected]

Wealth Management -KuwaitRasha Al-Qenaei


BrokerageKhaled Abd ElrahmanKhaled


Global KuwaitTel: (965) 2 295 1000Fax: (965) 2 295 1005P.O. Box 28807 Safat, 13149Kuwait

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Global Investment House - Weekly Report