NEFS Market Wrap-Up Week 1

Week Ending 25th October 2015

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NEFS Research Division Presents:

The Weekly Market

Wrap-Up

NEFS Market Wrap-Up

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Contents Macro Review 3 United Kingdom

United States Eurozone

Japan Australia & New Zealand

Canada

Emerging Markets

10

India China

Russia and Eastern Europe Latin America

Africa South East Asia

Equities

16

Financials Oil & Gas

Retail Technology

Pharmaceuticals Industrials & Basic Materials

Commodities

Energy Precious Metals

Agriculturals

22

Currencies 25

EUR, USD, GBP AUD, JPY & Other Asian


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THE WEEK IN BRIEF

China slowdown

continues

China’s growth rate has continued to fall,

dropping below 7% for the first time in six years.

This comes despite the recent devaluation of

the Chinese currency, which has clearly not

been enough to prevent Chinese growth from

falling further in the third quarter of this year.

The slowing of economic growth in China is

impacting negatively on a number of other

economies globally. Japan has seen a

reduction of exports to China, holding back their

own economic performance, whilst Singapore

has also felt the effect of China’s falling growth,

only narrowly avoided moving into recession

this week. The current trend in Chinese growth

seems set to continue as China grows into a

more developed economy.

Falling

unemployment

Unemployment reached its lowest level for

seven years in the UK, falling to 5.4% this week,

which points to a domestic strengthening amid

global uncertainty. The same pattern can be

seen in the US unemployment figures, as the

rate currently sits at 5.1%. There was also good

news in Spain this week, as the measure far

exceeded expectations, with the percentage of

people unemployed falling to its lowest level for

four years.

Monetary stimulus in

Europe

Mario Draghi, the president of the European

Central Bank, indicated that further quantitative

easing in the Eurozone is imminent. Whilst Euro

area growth has improved to some extent in

recent times, suggesting that domestic demand

is strengthening, Draghi pointed to slowing

growth in the emerging markets, China in

particular, as the reason for the Eurozone’s

sustained poor performance. Draghi’s speech

shocked the markets, with the Euro moving

closer to parity with the Dollar, while the FTSE

Eurofirst 300 index surged up 4% following the

news. It remains to be seen whether the

stimulus, expected to come in December, can

help take the Eurozone back towards pre-crisis

growth levels.

Oil prices remain low

While there was some rebound of oil prices later

in the week, the downward trend of oil prices

has continued, contributing to falling inflation

globally, with UK inflation falling to -0.1% earlier

this month. Sustained low oil prices have

contributed to reduced profits and job losses

within the industry, while share prices within the

industry look set to continue to fall, despite a

recent improvement. With BP and Shell

announcing further cuts to their investment

plans in the UK this week following reduced

profits, the future of the sector is uncertain.

Jack Millar

NEFS Market Wrap-Up

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MACRO REVIEW

United Kingdom

This week marked the state visit of China’s

president Xi Jinping to the UK, with trade and

investment deals worth £30bn being agreed.

This comes amid commitment by the UK to

build a stronger relationship and closer

economic ties with China, now becoming its

largest European partner. The main deals

include investment in nuclear energy, oil,

electric buses and education. The single

largest, and most controversial, is China’s £6bn

investment into a new nuclear power plant, an

unprecedented deal giving China a 33% stake,

which has provoked concerns regarding

national security.

Indeed, the UK’s closer partnership with China

has drawn criticism both domestically and

internationally. Cameron has been accused of

putting China’s human rights issues aside in

order to secure billions of pounds of investment.

China has also been accused of dumping steel

on global markets, meaning selling it at

uneconomic prices, which has caused a

collapse of global steel prices. This has led to

thousands of job losses for the UK steel

industry. On the other hand the UK recognises

China’s importance as a growing economic

superpower, and how it could beneficial, so aim

to capitalise on this by securing a long term

economic partnership. Meanwhile unemployment has fallen to a 7 year

low to 5.4%, providing a confident outlook on

the UK economy despite the global economic

slowdown. In particular the outlook for the

graduate job market is promising, with a study

of 100 leading employers showing that

graduate vacancies will rise 8.1% this year to its

highest level in 10 years. An official survey of

graduates last summer showed that 76.6% had

found jobs, suggesting that the economic

recovery has finally reached young people. In

addition, retail sales this September surged to

a 2 year high, being boosted by falling shop

prices and rising real wages. This should allay

fears of a slowdown in the third quarter and

provide a further boost to consumption led

growth, the main driver of the UK economy. The

graph below shows how retail sales have grown

in recent years.

The Bank of England (BoE) has come out in

support of Britain remaining within a reformed

EU, after a speech by Mark Carney. This

follows the release of a preliminary report by the

BoE on Britain’s EU membership, in which it

states that overall Britain is a “leading

beneficiary” of Europe. However Mark Carney’s

intervention into a political debate has been

criticised since the BoE has a role to remain

independent of politics.

Matteo Graziosi


5

United States

There were two key data releases concerning

the housing market this week, along with

weekly data on first-time filing for

unemployment insurance.

Building permits data from the Census Bureau

showed that permits for new construction

declined month on month by 5% to an

annualised 1.1 million, falling short of a forecast

of 1.16 million. Permits for new construction

typically give an indication of future demand.

However, economists warn not to read too

much into the data due to substantial revisions

in the future. The National Association of

Realtors released data showing that existing

home sales beat forecasts of 5.38 million to

reach an annualised 5.55 million for the month

of September, a 4.7% improvement on last

month’s figures. Conversely, the share of first-

time homebuyers fell from 32% in August to

29% in September. New buyers are crucial with

regards to the long-term health of the housing

market as it represents new demand rather

than trading in the property market.

Elsewhere, in a report from the Labour

Department, initial claims for state jobless

benefits increased by 3,000 to a seasonally

adjusted 259,000 for the week ending 17th

October. This was lower than the forecast of

266,000 and is hovering around 42-year lows.

The labour market is approaching full capacity

with the last reported unemployment rate

standing at 5.1%, similar to levels seen back in

early 2008.

This week’s robust labour and housing data

demonstrates strong domestic fundamentals in

the US economy. A firming housing market and

lower unemployment levels are boosting

household wealth, driving economic growth

through consumer expenditure. It can be

argued that the recent growth in strength of the

dollar has mimicked a rate rise and with global

growth for 2015 at approximately 2.6% (the

long-run norm is 3%), tightening monetary

policy too early could hinder the US economic

recovery. 65% of economists surveyed by the

FT predict a rate rise at the end of this year and

85% expect a second increase by June 2016.

The FOMC will make a statement about

monetary policy next week and this will

hopefully give us a better idea of the timing of a

rate rise. Next week’s data on consumer

confidence and advance quarter on quarter

GDP should help too.

Sai Ming Liew

NEFS Market Wrap-Up

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Eurozone

Consumer confidence within the Eurozone,

which calculates the level of optimism

consumers have towards the economy, has

fallen by 0.6 points from -7.1 in September 2015

to -7.7 in October 2015, as measured by the

Consumer Economic Sentiment Indicator. As

you can see on the diagram below, which

shows consumer confidence in the Eurozone

between January and October 2015, the

indicator has reached its lowest level since

January this year.

However, when comparing these figures to

2009, when the value fell to record lows of -

34.30, it is clear that consumer confidence is

much less weak now than it was during the

financial crisis. When taken in this light, the

implications of this month’s figures may not be

too serious for the 19 countries within the

Eurozone.

Consumers situated in the Euro area have had

the benefit of low inflation rates during 2015.

Inflation in the Eurozone was -0.1 per cent in

September 2015, as measured by the

Harmonised Index of Consumer Price (HICP),

taking a negative value for the first time in six

months. A large proportion of the decline in

inflation was due to the decrease in the price of

fuel and oil, which fell by 0.71%. As inflation

decreases, consumers are more likely to

increase their spending as prices are lower.

Therefore the significance of a small decline in

consumer confidence in the Eurozone is

somewhat diminished.

The European economist at Capital Economics,

Jack Allen has said “Looking ahead, economic

conditions are broadly supportive of consumer

confidence. The EC index measures

consumers’ optimism about their own financial

and employment prospects, as well as the

wider economic outlook, over the next twelve

months. The slow but steady labour market

recovery, along with low inflation, should

support households’ real spending power. And

low interest rates on household borrowing are

likely to persist, keeping debt service costs

down”. As such, even though consumer

confidence has fallen in the last month, the long

term prospects of consumer optimism and

spending is looking somewhat more positive.

Elsewhere, there was positive news to come

out of the Spanish economy this week, with the

release of unemployment data on Thursday;

unemployment has fallen sharply from 22.4% to

21.2% there, beating forecasts of 21.9%, and is

now at its lowest level since 2011. The fall

further hints at some degree of underlying

strength within the Eurozone economy as a

whole.

Kelly Wiles


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Japan

Trade figures released by the Ministry of

Finance show that Japan’s annual export

growth fell to just 0.6% for September, below

the expected 3.4%. The cause of this slowdown

has been due to the falling sales to a slowing

China has reduced the volume of Japanese

exports. With trade accounting for

approximately 17% of GDP last year this will

have serious implications for growth in the third

quarter, possibly forcing Japan into a technical

recession following a 0.3% contraction in the

previous quarter.

Growth in Japanese manufacturing output was

a welcome shock following the disappointing

export figures, with the latest Flash Purchasing

Managers’ Index (PMI) reading at 52.5. The

PMI is essentially a survey to measure the

health of the manufacturing sector – a reading

above 50 indicates expansion. Released on

Thursday, the Flash PMI is a first estimate of

the final PMI indicator expected next week. The

figure was well above the forecast of 50.5, and

also means that operating conditions in Japan

have improved at their fastest rate in over 18

months. This news shows a marked

improvement in the Japan’s manufacturing

sector and that international demand remains

resilient despite the backdrop of declining

emerging economies.

The Regional Economic Report published by

BoJ paints an equally rosy picture of the

Japanese economy as the pace of economic

improvement in all of the country’s regions

continues to be in “moderate” or “steady”

recovery. However, the trend rate of growth of

almost zero for the last decade, shown by the

black line on the graph below, gives a less

optimistic assessment. This inertia has become

the norm for the nation, and has made it the

poster child for economic stagnation.

Speaking at the end of last week BoJ Governor

Haruhiko Kuroda reiterated that the monetary

policy approach under “Abenomics” is working,

but said the situation will continue to be

monitored closely for any potential shocks.

Dismissing the genuine optimism expressed by

the BoJ thus far, many analysts are still

expecting the Bank to cut their growth and

inflation forecasts at a review meeting at the

end of October. If the inflation and

unemployment figures released next week

continue to be consistent with Japan’s

“moderate” trend, then it would not be

surprising to see mounting pressure for a more

active approach from the Bank in the coming

weeks.

Loy Chen

NEFS Market Wrap-Up

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Australia & New

Zealand

Westpac, Australia’s second largest bank has

announced an increase in variable mortgage

rates by 0.2 percentage points for home loan

customers. The first such rise in three years

was announced on 14th October and will take

effect on the 20th November. Westpac stated

that such changes were due to the bank “being

forced to hold 50% more capital against

mortgages as a buffer for absorbing losses”, a

regulation created after the financial crash in

2008. Essentially this means an increase in the

cost of doing business for Westpac and

therefore an inevitable increase in prices

(mortgage rates) for consumers.

Consumers took the news with heavy hearts.

The ANZ Roy-Morgan consumer confidence

index has fallen by 2.0% (to 113.3%), indicating

a downward pressure on consumer

expenditure. This index measures the monthly

consumer confidence of households and

examines how this affects their regular

spending. An increase in variable mortgage

rates was bound to create a negative sentiment

among consumers, with less disposable

income and slowing momentum in Australia’s

residential property market, consumers are

simply buying less.

How bad have the effects been? The ‘two boom

property markets’; Sydney and Melbourne

experienced a reduction in auction clearance

rates in the past week. Rates in Sydney fell to

65.1%, the lowest in three years, and to 73% in

Melbourne. The Reserve Bank of Australia

(RBA) said there were “tentative signs of some

slowing in the Sydney and Melbourne housing

markets”. Consumers are more reluctant to

engage in activity in the property market,

despite the large numbers of first time buyers,

and many find that property prices in these

cities are out of their reach.

In other news, CPI in New Zealand was 0.3% in

the September quarter, meeting the Reserve

Bank of New Zealand’s forecast, but lower than

the 0.4% in the June quarter. Despite cheaper

vehicle relicensing fees, the change was

caused by a rise in price of vegetables, which

has created downward pressure on consumer

spending.

However, the annual pace of inflation was

unchanged at 0.4%, slightly ahead of the

Central Bank’s forecast. Annual inflation in New

Zealand hasn’t been within the Central Banks

1-3 percent range for three quarters. As shown

by the graph below, the last time inflation was

within the range was in July 2014. Cheap oil

prices, low interest rates (a base rate of 2.75%)

and a strong Kiwi dollar have all kept consumer

prices down, stalling an increase in inflation

rates.

Meera Jadeja


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Canada

Emerging from its first recession in six years,

Canada’s economy has bounced back thanks

to the benefits of a low currency. However, the

mid-term economic outlook remains weak.

The Bank of Canada’s mandate is “to promote

the economic and financial well-being of

Canadians”, and one of the key ways in which

it seeks to achieve this is through the

manipulation of monetary policy. On

Wednesday, the Bank of Canada announced

that its target for the overnight rate of interest,

otherwise known as its key policy interest rate,

would remain unchanged at 0.5%. This comes

as no surprise – the CPI index currently stands

at 1%. This is on the lower boundary of the

Bank of Canada’s symmetrical target of 2%, so

keeping the interest rate low should help to

boost inflation. In spite of this, Stephen Poloz,

the Governor of the Bank of Canada, has stated

that inflation may only reach the 2% target in

mid-2017 due to excess capacity, or slack, in

the economy.

Although GDP has picked up and household

spending is expected to increase, growth is still

expected to remain subdued. Predictions for

the GDP growth rate are 2% next year, and up

to 2.5% in 2017. This ensues as the economy

still struggles to adjust to the new environment

of low commodity prices, driven by the long-

term falls in the oil price. As a result, the

resource industry, business investment, and

moreover the Canadian dollar are being

adversely affected. In an attempt to revive the

economy, the Bank of Canada may decide to

engage in further monetary stimulus by cutting

the interest rate, but in doing so, this deters

overseas investment for fear of low rates of

return. The likelihood of more rate cuts means

the Canadian dollar is down by about 15% over

the past 12 months. The rate fell further as

investors sold the currency following the GDP

predictions in the Bank of Canada’s quarterly

monetary report published this week.

As shown in the chart below, the target for the

overnight rate of interest has already been

lowered twice this year. The next decision by

the Bank of Canada’s Governing Council will be

made on the 2nd of December.

Shamima Manzoor

0

0.25

0.5

0.75

1

1.25

2010 2011 2012 2013 2014 2015

Target for the overnight rate

NEFS Market Wrap-Up

10

EMERGING MARKETS

India

Last week India was once again handed a BBB-

investment rating from global rating agency

Standard & Poor’s, the lowest grade that can be

given. Despite the country’s hope for an

upgrade given recent economic success, S&P

decided to retain this rating, whilst predicting a

‘stable’ outlook for the future. India’s low per

capita income and high government debt are

key barriers to an improvement in the country’s

sovereign rating and in a statement issued last

week, S&P stated that “the outlook indicates

that we do not expect to change our rating on

India this year or the next based on our current

set of forecasts.” Moody’s and Fitch Ratings,

two other global agencies, have also accredited

India with the same. Most recent data for government debt suggests

that it currently stands at 66.1% of GDP - higher

than it was in the previous year. This figure has

been deemed unacceptable, with the agency

making it clear that unless it reaches below 60%

of GDP, India cannot be credited with a higher

rating. Another requirement is that the fiscal

deficit, which is currently 3.9% of GDP, must be

lowered to the target of 3% by 2018. In order to

address both of these issues, S&P have

stressed the importance of generating more

revenue and controlling spending on subsidies

for food, energy and fertilisers, which in 2015

was the equivalent of 2% of GDP.

The government simply does not yield enough

revenue to be able to spend a sizeable amount

on subsidies whilst also implementing new

reforms and lowering net debt. A new goods

and services tax, which is set to be rolled out in

April 2016, would be a significant step in

reforming taxation and shows that India is ready

to employ measures that will eventually redress

its public finances. The ‘GST’ Bill will

amalgamate several Central and State taxes

into one single tax, creating a common national

market and hopefully increasing revenue for the

government.

Low per capita income is also a concern,

estimated at only $1700 in 2015. Measures

such as improving labour market flexibility and

strengthening the business climate in order to

create more employment will help raise income

levels, but realistically this has to be a long term

goal, and the threshold of $5000 issued by the

agency will take a long time to reach.

On a brighter note, S&P expects growth to

average just under 8% from 2015-2018 and the

positive impact of the governments new reform

agenda has been recognised globally, most

recently by the US Treasury which reported that

India has the potential to become a global driver

of growth. However, if India’s outlook really is to

remain ‘stable’ in this fragile economic climate,

there are vast improvements still to be made.

Homairah Ginwalla


11

China

This week we learned that China’s annual

growth rate slowed to 6.9% in the third quarter

of 2015. While this came in slightly above

expectations, the figure signals the lowest rate

of growth in China since 2009. Growth has

slowed dramatically in 2015, averaging at 7%

this year compared to nearly 9 % in the period

from 2009-2014. Additionally, the ongoing

correction of the Chinese Stock Market may

lead to further slow-down of economic growth

due to its impact on the financial sector.

However, in order to attain higher growth rates

the Chinese government has two options. It

could either boost investment or focus on

increasing private consumption. The Chinese

people have traditionally been keen on saving

money, though, and as such, China’s

investment-to-GDP ratio is one of the highest in

the world. Yet, its savings still exceeded

investments in 2014, and consumption counted

for only 38% of GDP in the same year.

Nonetheless, declining labour force growth and

a recent shift towards less capital-intensive

industries could be seen as indicators for

slower future investment growth.

On August 11 this year, the People’s Bank of

China (PBoC) announced a change in the

setting of the daily reference rate. This shift in

foreign exchange policy led to a depreciation in

the RMB of 2.3% in September. It seems that

the reason for China’s depreciation of the RMB

has come as an attempt to hide the current

underlying problems within the Chinese

economy by boosting export-led growth.

As can be seen in the graph below, the PBOC’s

reference rate has differed little from the daily

close rate since the introduction of the new

settings, hinting that the market has actually

been playing a bigger role in setting the

exchange rate than before, prior to the recent

devaluation. A more flexible approach in

China’s foreign exchange regime is required to

win greater status for the Yuan. However, on

August 19 the IMF said its board has decided

that if it opts later this year to include the RMB

in the “Special Drawing Rights” (SDR) basket,

this will not take effect until September 2016. As

being part of the SDR currency basket would

make the RMB officially a reserve currency, it is

not surprising that the IMF decided to postpone

its inclusion; being a reserve currency requires

open and developed capital and stock markets

which China still lacks.

Alexander Baxmann

NEFS Market Wrap-Up

12

Russia and Eastern

Europe

Russia has dominated news this week, coming

under severe scrutiny as its economy sees a

4.3% contraction in the third quarter. This,

alongside a worsening inflation rate of 15.7%

and a reduction in industrial production,

combined with increased defence spending, all

point towards further woes for Putin’s economy

– although he himself does not concur.

Figures released this week showed a decline in

capital investment of 5.6% and a 3.7%

reduction in industrial production – the latter its

lowest since March. So reliant on industrial

production is Russia that it takes its place as her

second most important economic driver and

consequently represents a real problem for the

Soviet state. In addition, the third quarter

figures (4.3% contraction) only reiterate the

economic worry and assert the relevance of the

Western sanctions, having a knock-on effect on

the already plummeting oil prices, whilst also

disincentivising investment in Russian equities.

Not surprising, then, is the petition for

bankruptcy of Russia’s second biggest airline,

Transaero, filed by Russia’s biggest bank,

Sberbank. While this is being put down to a

“bad business model”, it is clear that the

worsening economic situation has played a

central role.

Inflation, too, is way above its 4% target,

hovering around the 16% mark and is making

its presence known as real incomes have

dropped 9.7% this September and the Ruble

continues to depreciate, contributing to the

10.4% decrease in retail sales as consumers

have their spending power stripped. Rising

prices is also giving birth to a poverty rate climb

up to 15.1%, representing 21.7 million people.

Economic minsters now face a tough decision

between cutting rates now or waiting for signs

of stabilisation – ING Bank advises a mixture of

the two, expecting the Bank of Russia to start

monetary easing next week, cutting its key rate

to 10.5% (50 basis points at each of the coming

policy meetings) by the end of the year.

Despite what seems like a black swan facing

the Russian economy – or “three black swans”

as Sberbank CEO, Herman Gref, says – there

remains some hope. Against all the criticism

and, in particular, a Moody prediction of a fall in

Russian credit-worthiness to 2009 levels, both

Putin and Andrey Kostin (president and

chairman of VTB – Sberbank’s biggest rival)

deny the Western assumption that this is the

end for Russia.

Kostin ensures that this “is not another 2008”,

saying that the economic slump has reached its

bottom and can only improve from here.

Officials claim that the economy is “not in

tatters” and that it is “under control”, predicting

slight growth for early next year. Putin himself

remains confident, seeing the Ruble

depreciation not as a negative, but as a

competitive advantage, telling his people to

“make use of it”.

Tom Dooner


13

Latin America

On October 15th the Central Bank of Chile

(CBC) rose its benchmark interest rate by 25

basis points (bps) to 3.25% in an attempt to

curb inflation. Whilst policy maker have been

struggling with high consumer prices, analysts

were expecting the bank to leave the key rate

unchanged at 3%, amid sluggish growth.

The annual inflation rate came in a 4.6% in

September 2015, well above the bank's 2 to 4

percent tolerance range. Yet, as shown in the

graph below, annual growth rates have stalled

in recent years, falling from 5.4% in April 2013

to 1.9% this August. Although September’s vote

was 3-1 in favour of holding interest rates at 3%,

this month’s increase in the rate was not entirely

unexpected, with the CBC’s comments in

September signalling that rates may rise soon.

Runaway growth and overheating of the

Chilean economy are not the factors leading to

the bleak inflationary outlook, but some

policymakers point to the current monetary

stimulus programme and the need to cut it in

the short-term. While the asset purchase (QE)

scheme run by the CBC is increasing upside

inflationary to some extent, it is not the only

factor influencing inflation rates.

The wider economy is in a fragile state and

growth is disappointing, see graph below. In the

past 12 months the current account has swung

from a 1202M USD surplus to a forecast deficit

of 693M USD in November. These results

persist despite the fact that the peso has lost 13

percentage points against the dollar over the

last year. This, in theory, should make exports

more desirable and imports more expensive,

hence suggesting a surplus should instead

have been maintained (or increased). But it is

not all doom and gloom for Chile as, although

unemployment is predicted to be up 0.2% next

week, it will still remain strong at 6.7%.

So what lies ahead for Chile’s inflationary

policy? As this initial increase of 0.25% is likely

only to be effective in the medium term. If the

combination of weak economic growth and high

inflation persists, then the CBC and Chilean

government may have to bite the bullet on

either growth or inflation, for a more immediate

remedy. They face the choice of increasing

interest rates further, contracting the already

weak consumer demand, or implementing

aggressive fiscal stimulus, with the inflationary

consequences that would follow. Next month

the signs are pointing towards a further

increase in the benchmark rate, so we could

see rates increase another 25bps.

Max Brewer

NEFS Market Wrap-Up

14

Africa

The greatest shock this week was the news that

Egypt may soon overtake South Africa, to

become the continent’s largest economy.

Despite being plagued by uprisings and

violence in recent years, Egypt’s GDP will reach

$315bn this year, marginally behind the $317bn

economy of South Africa, according to

Renaissance Capital. Last year Egypt slumped

far behind with a GDP of $286bn, a result of low

tourism and foreign investment, and high

energy prices. Even in 2015, Egypt continues to

face a weak currency that has already seen two

devaluations in the past week. Whilst this

should encourage foreign investment and

increase tourism, it has made imports very

expensive and sustained high GDP growth

unlikely.

On Tuesday Chinese Government officials

confirmed their $50bn pledge intended to

industrialise Africa, including the provision of 50

power plant technical experts, 40,000 training

opportunities and 200,000 industrial managers

to train local workers. This will very effectively

enhance the long-term self-sustaining and

independent nature of the African economy.

However it comes amidst a period of great

turbulence for China who has had to reduce

foreign investment by 84% over the past year,

due to its slowing economy, and yet in the same

time period has nearly doubled investment into

African extractive industries (from $141.4m to

$288.9m). This has incited old accusations of

China trying to gain control of Africa’s

undiscovered natural resources. Further

criticism is that the pledge may inevitably

become too focused on South African

development, whilst other African economies

are left behind.

A big topic of contention this week has been the

proposed 11% university tuition fee increases in

South Africa, which has consequently provoked

widespread protests across the country. A fee

cap of 6%, as suggested by the Higher

Education Minister Blade Nzimande, has also

been rejected. Whilst budget cuts have made

the fee increases necessary, in order to

continue developing other important economic

sectors, affordable and readily available higher

education is of primary importance to the long-

term, sustainable development of the continent.

Johan Fourie, an economics professor at

Stellenbosch University, predicts that 95% of

South Africans already can’t afford the current

university fees. Whilst higher fees will reduce

pressure on the South African government, it

will also widen the poverty gap and greatly slow

down growth in the services sector.

Charlotte Alder


15

South East Asia

Optimism will inevitably have increased for the

citizens of Singapore as it has been revealed

that their economy grew in the third quarter of

this year, and thus avoided recession, which

refers to two consecutive quarters of negative

economic growth. Released on Wednesday last

week, gross domestic product growth for this

quarter at 0.1% is shown in the graph below.

This is a significant boost for Singapore as

growth for the previous quarter was -2.5%, a

major low since the global recession.

The Monetary Authority of Singapore stated in

its Semi-Annual policy statement that it would

slightly reduce the value of the Singapore dollar

against the currency of nation’s main trading

partners, in an effort to revive economic growth.

This is expected to support output, as a

depreciation in the Singapore dollar will lead to

an increase in exports, as the price of

Singapore’s exports become cheaper, making

them more attractive to Singapore’s main

trading partners - Malaysia, China and the US.

It is hoped that the increase in exports will

benefit Singapore by creating growth and more

jobs, particularly in the manufacturing sector,

which contracted 6 percent in the third quarter.

Moreover, an increase in economic growth will

lead to an increase in inflation with more

individuals spending on consumer goods. This

would not necessarily be a good outcome in

normal circumstances, however with

Singapore’s inflation rate at -0.8%, it would

reduce uncertainty and inflation would be

welcomed with open arms.

There is certainly a reason for Singapore to be

optimistic as growth for the first quarter in 2016

is estimated at 3.48% and by 2020, inflation is

expected to be at a more desirable rate at 2.21

percent, according to Trading Economics. But

how realistic are these predicted figures? With

globalisation more present than ever before

and Singapore being so reliant on foreign trade,

activity in other countries must be considered.

Singapore’s second largest trading partner is

China, which has had a staggering annual GDP

growth rate in recent years, exceeding 10% in

some cases. However, many are predicting that

by 2020 this figure will have more than halved

to around 5%. China’s rapid growth interferes

with their goal of reducing carbon emissions

and becoming greener as a country. With

China’s growth slowing and their manufacturing

sector declining, it will have a knock-on effect.

Countries in South East Asia such as

Singapore will lose the economic benefits of a

world leader in China. So will Singapore grow

as expected? Only time will tell.

Alex Lam

NEFS Market Wrap-Up

16

EQUITIES

Retail

Walmart’s recent share price drop, despite

being driven by a plethora of factors and

conditions almost unique to the venerable

retailer, has resulted in a sizeable knock-on

effect for a number of large retailers, who have

seen largely negative changes in share price

and, by extension, company valuation.

Walmart, in a conference for investors around a

week ago, announced that it not only expects

sales growth to be decidedly below analysts’

predictions, at around 3%, but that it shall

expect to raise operating costs significantly,

adding $1.2 billion through various initiatives

and structural problems within the company,

such as a wage hike and investment in

employee training schemes.

The market, as aforementioned, reacted badly

to the news, with the nature of Walmart’s

business without doubt contributing to the

largest one day drop in the retailers’ share price

since April 2000, shedding more than 10% by

the close of trading. Walmart is a company

renowned for paying increasing dividends to

their investors, a condition which, by its very

nature, precludes a protracted period of falling

profits. As such, increasing costs and low sales

growth, resulting in predicted earnings per

share of 6-12 cents less, will no doubt have

rattled large institutional investors, prompting a

sell-off of a vast number of retail equities.

Whilst retail equities were particularly affected

by the Walmart news, with the S&P consumer-

staples index falling by 1.1%. The ramifications

of the Walmart sell-off were widespread and

pronounced, coming at a particularly

precipitous time for consumer stocks, given that

investors had already been rattled by weak

predictions of only a 0.1 % increase in

consumer spending, amidst a backdrop of

upwards pressure on wages.

Indeed, the consumer sector as a whole has

been hit by lowered commodity prices not

translating into sales growth, as well as

continued concerns on China and the

sustainability both of its growth and price of

exports. These factors, despite the large fall in

retail equity prices, will no doubt have

institutional investors questioning whether or

not the fall in retail equity prices were a

necessary correction to a fundamentally

struggling market.

Jack Blake


17

Financials

The financial industry news this week has been

dominated by the conference call given by the

ECB president, Mr Mario Draghi, with the

pleasing news that there may be further

quantitative easing in the new year. This

caused a positive response in the markets on

Friday with the FTSE Eurofirst 300 climbing 4%

in less than 24 hours after the announcement.

Across the pond, the financial sector

experienced broad gains, with the NYSE

Financial Index up by 2.0% for the week.

Thanks heavily due to commercial lender, CIT

Group’s share price climbing almost 15% to

$45.50 following an announcement that it will

explore strategic alternatives for its $10 billion

commercial air business.

There was further good news for the retail

banking industry as regulators suggested an

end to the wave of regulations which have hit

the market since the crisis of 2008. On

Wednesday the FCA announced the

regulations heaped on the City of London would

be substantially reduced. Tracey McDermott,

the Chief Executive of the FCA, said many

boards were only focused on compliance with

regulations, such as the launch of Williams and

Glynn by RBS, or HSBC moving their UK retail

headquarters to Birmingham. This reduces

innovation in the market and has been

detrimental to industry growth, while also

creating barriers to entry for challenger banks

such as Virgin Money. On top of this, the

Competition and Markets Authority also

produced a 34-page paper on Wednesday

indicating there would be no end to free-

banking. This spelt good news for retail banks

such as Santander (BNC), who has seen its

share price increase 3% since mid-week.

Although RBS, HSBC and Barclays saw a fall in

their share prices on Wednesday due to

regulatory fines from the US Federal Court,

prices managed to recover by the end of the

week.

Elsewhere in the markets, Swiss-based

insurers ACE Limited (ACE) announced on

Wednesday an increase in its operating income

of 0.8% in Q3 to $897m while its take-over

target Chubb Corporation reported an increase

of 4.8% taking operating income to $547m. This

caused the share price of ACE to rise 5.35%

during the week as the merger sets it to become

one of the world’s biggest insurance

companies. With such great prospects, I expect

the company is undervalued by the market

suggesting the share price may grow in the

future months.

Sam Ewing

NEFS Market Wrap-Up

18

Pharmaceuticals

Since August pharmaceutical companies have

come under fire for excessive profiteering by

gauging drug prices. Pharmaceutical stocks

can be great investments because companies

are protected by patents which allow them to

recoup their research and development.

Biotech and pharmaceutical stocks have

surged recently, backed by new discoveries

and acquisitions. However, these rises have

been backed by the idea that companies can

achieve premium prices in the US. Growing

uncertainly is clearly gaining on investors who

are fearful that premium prices will not be

sustained in the US, as the NASDAQ

Biotechnology Index has fallen 13% since

August 17th, as shown in the graph below.

Most notable outcries relate to Turing

Pharmaceuticals, a company founded in

February by Martin Shkreli, a young yet

experienced hedge fund manager within the

sector. Last month, with $55 Million of their $90

million venture capital, the company obtained

licenses to pyrimethamine, a drug used to treat

multiple life threatening parasitic diseases.

Branded under the name Daraprim, it is most

commonly used to treat patients infected with

HIV. Although the patent for this drug has long

expired, no other company in the US has been

able to manufacture it, and Turing

Pharmaceuticals ensured strict distribution

controls before the purchase to ensure its

niche. Practically overnight, Turing

pharmaceuticals jacked up the price of the drug

by over 5,455% from $13.5 to $750 per pill.

Like other price-gauging cases, Mr Shkreli

attempted to justify this rise by claiming that it is

needed in order to fund additional research and

development to lessen the drug’s side effects,

but this excuse is not being bought. It is likely

that this rise will have a larger effect on

insurance companies than patients, who will not

pay for the pill themselves. Even so,

presidential candidates such as Hilary Clinton,

are campaigning for greater accountability on

drug prices and politicians including Bernie

Sanders put the company into an on-going

congressional investigation. Additional public

pressure eventually forced Mr Shkreli to

promise a price drop, despite his previous

reluctance to change price.

Just today it has been announced that San

Diego-based competitor Imprimis

Pharmaceuticals Inc. has been able to make a

mix of approved compounded drug ingredients

to compete with Daraprim for $0.99 per

capsule. Spiking a 17% rise in its stock, it's an

encouraging action for an industry which is

being continually exploitative.

Sam Hillman

NASDAQ Biotechnology Index


19

Oil & Gas

An agreement for BP to sell liquefied natural

gas to China Huadian Corporation was one of

the many Sino-British trade deals crowned

with the arrival of President Xi Jinping to

Britain on Wednesday night. The deal is worth

£6.5 billion: an impressive amount, though the

figure will only be achieved over a period of

two decades. After the agreement was signed,

BP PLC (LSE) share value has been rising

since Wednesday to $35.92, an increase of

2.5%.

In other energy news, on Thursday the EIA

reported that US supplies of natural gas rose

81 billion cubic feet for the week ending Oct.

18. That was less than the forecast of analysts

polled by Platts for a climb of between 86

billion and 90 billion cubic feet. Natural Gas

(NYMEX) initially held on to earlier gains in the

wake of the data, before losing ground. It

settled 1.8 cents, or 0.8%, lower at $2.386 per

million British thermal units.

The future is also looking a little less dire for

oil, as it rebounded slightly on Thursday to

settle with a modest gain as investors hunted

for bargains after prices recently fell near a

three-week low. Crude Oil (NYMEX) closed 18

cents higher on Thursday, or 0.4%, to settle at

$45.38 a barrel, while Brent Crude (ICE EU)

also rose 23 cents, or 0.5%, to $48.08 a barrel.

Buying interest for oil returned after some

recent declines, but the “rally is stalling amid a

weaker euro due to talk of further stimulus in

the eurozone,” according to Matthew Smith,

commodity analyst at ClipperData. The Dow

Jones Oil & Gas Index (as can be seen below)

also highlights a precarious situation for the

sector, with a modest rise in the index since

the beginning of October.

It remains to be said however, that due to the

persistent fall in the price of oil, around 5500

people directly employed in the oil industry

have lost their jobs since last year – around

15% of the total workforce, according to Oil &

Gas UK. Even after the temporary uplift, oil

price could stay lower for many more months.

As the industry adapts to these expectations, a

predicted 10000 further jobs will be lost from

the sector. The Standard & Poor’s 500 energy

sector’s index also reflected these

expectations, as third-quarter earnings per

share are forecast to show a 66% decline year

on year.

Andrea Di Francia

NEFS Market Wrap-Up

20

Industrials & Basic

Materials

The Industrials & Basic Materials sector has

faltered in the past year, losing 10.8% of its

market share, and within the 10 sub-divisions of

the sector, only a meagre three had a positive

return over the year. The Mining and Metals

industry has lost over 34% in the past year and

the outlook does not appear poised to improve

anytime soon.

The Chinese, long one of the biggest buyers of

mined commodities, are awash in steel, local

debt and a hard landing on its economy, and

with neither India nor Brazil ready yet to assume

the mantle of emerging market growth engine,

this leaves the mining industry with major

issues. There is also considerable and

increasing pressure on the coal industry due

both to the decline in oil prices and the

increasing concerns over the environment.

Putting all these together, it is no surprise that

mining companies are the worst performers of

late.

Glencore is a Switzerland-based natural

resource company and are listed on the Basic

Materials sector within the United Kingdom

Main Market. The Company has operations in

the Americas, Asia, Europe, Africa and

Oceania, and its portfolio of diversified

industrial assets consists over 150 mining and

metallurgical facilities, offshore oil production

facilities, farms and agricultural facilities.

Despite both size and market positioning, the

company is going through a very rough patch

and has lost over 65% of its share price since

June, which has experienced a much greater

drop than the FTSE 100 index as a whole, as

shown in the graph below. This has largely

been due to the sharp fall in commodity prices,

a supply glut from overproduction in the market

and investor concerns over its highly leveraged

balance sheet.

Glencore succumbed to shareholder pressure

and announced plans to reduce its debt to $20

billion and also to raise cash through streaming

deals, asset sales and other moves which could

potentially cut more than $12 billion of its debt.

The measures announced by Glencore

represent a positive step towards strengthening

its balance sheet and this is necessary in the

current commodity price environment

Is the worst over for Glencore? I am inclined to

think so, and their lack of exposure to iron ore

is favourable. Volume growth for its brownfield

projects will also provide much needed support

in a weak commodity price environment.

Erwin Low


21

Technology

This week US technology stocks strongly

outperformed the US stock market as a whole,

leading the overall market higher. The

NASDAQ 100, the American/Canadian stock

exchange, depicts largest gains over the last

week for the tech-giants in particular. Apple’s

share price rose 4% from $110.71 to $115.47,

whilst Intel Corporation saw a rise to $34.40

from $32.76. Not all seemed constructive for

the tech market though, with Google stocks

falling down to $651.79 from $664.36, but only

a seemingly minor plummet for the huge

corporation.

Microsoft maintain their high stance in the

technology market, with a 2% rise in share

values over the past week, settling on $48.03.

This continues what has been a compelling

cycle of sudden rises and falls over the past

year, with shares being an annual low of $40.40

in January. Their now recuperating

performance reflects the prosperous release of

their Windows 10 update earlier this year, which

has been a hit with consumers, implementing

intuitive features that further enhance the user’s

experience. Whilst the update had experienced

some bugs in the software over the summer,

which were reflected by the drops in the firm’s

share prices over the past months, it clearly

hasn’t had too much of an effect on Microsoft’s

performance, with them quickly regaining

ground upon every shortfall.

In other news, Micron Technology, a prevalent

producer of semiconductor devices, still dwells

within what has been a disappointing year for

the multinational corporation, with share prices

still falling, currently valued at $16.72 – an 11%

drop compared to last week with shares running

at $18.74. This is a huge contrast to last year’s

performance, where stock prices were valued

at an all-time high of $36.49 towards the end of

December. With forecasts expecting this

pattern to continue throughout the final quarter

of the year, this gradual decline in share price

could cause a loss of investors for the American

company if not challenged.

For this reason, it comes as a potential relief for

shareholders to hear that Micron might be in

talks to buy the American company, SanDisk –

the third largest global manufacturer of flash

memory. This would provide significant gains

due to the company’s technology and portfolio

leadership in the flash semiconductor and

enterprise flash systems market, perhaps

sparking a recovery in performance from

Micron, seeing them progress back onto the

successive path set up over the past years.

Daniel Land

NEFS Market Wrap-Up

22

COMMODITIES

Energy

Energy commodity prices faced persistent falls

in the past week, data has shown. As shown in

the graph below, the price of crude oil fell

sharply this week, reaching a six-year low,

while only ethanol out of the energy

commodities has seen any increase in price,

rising 0.9%. This signifies that the production

war between OPEC and “fracking” producers is

still yet intensifying.

Of course, energy prices have been steadily

falling for a year now, ever since it became clear

that OPEC nations were attempting to drive out

firms employing the recent fracking technique.

As OPEC nations are still able to make a profit

for lower oil prices than fracking producers, they

hope that by constantly lowering the oil price,

they will reduce the profitability of fracking. As a

result, this would allow OPEC to continue to

dominate the market, allowing them to collude,

raising prices (and profits) together.

So how does this continued price drop affect

everyone? For those living in net oil importing

nations, the price drop has meant that

consumers have had to spend less at the petrol

pumps and on many other goods. The price

drop has caused inflation to be very low in many

economies, such as the UK, whose inflation

rate fell to -0.1% earlier this month (13th Oct.).

This is due to the fact that oil is a key factor of

production in the production in a wide array of

goods, and thus the lowering of costs has

allowed firms to also lower the price of the final

good to the consumer. Many governments

burdened with heavy gasoline subsidies have

also greatly benefited; a lower price of oil has

greatly increased the opportunity cost of these

subsides, and as a result administrations

around the globe now can shift funds to other

more imperative projects and developments.

However, it is not all good news. The drop in

price has greatly affected all net exporting oil

nations, and caused many job losses in all of

the large oil firms; yesterday a key economic

journalist at Forbes grandly stated that “the

collapse in oil prices has so far claimed more

than 200,000 jobs worldwide”. Unless things

drastically change, 2016 will be a year of more

layoffs and asset sales if Crude Oil continues to

descend into pre-21st century levels.

Harry Butterworth


23

Precious Metals

The uncertainty and expectations of a rate hike

and weakening US Dollar has caused a surge

in gold prices since early August. However in

the last week, we have seen the shiny metal fall

from 1187.90 to 1175.69 in USD per ounce as

of 20th October 2015, the largest drop for three

months, as signs of a comeback for the US

economy is imminent. Analysts believe to have

attributed this to the recent jobless claims in US,

low inflation rate and higher consumer

sentiment.

Jobless claims in the US have fallen 0.2% from

262,000 to 255,000, the lowest level in the last

40 years. Consumer sentiment has also risen

from 87.2 in September to 92.1, outperforming

economists’ expectations. Stronger economic

data released would prompt investors to

speculate the possibility of a sooner interest

rate hike, although reports have shown that it is

unlikely that it will happen anytime this year.

Higher interest rates would lead to a lower claim

for gold as it would not generate interest as

compared to other asset classes. Historically,

gold has always been seen as a reserve during

economic uncertainty, and its prices have been

co-related to the inflation rate. The inflation rate

has fallen for two straight months since July,

and based on the chart below and past trends,

the price of gold has fallen whenever inflation

rates falls.

South African labour wages and working

conditions for gold miners have resulted in

unrest, and the industry is in dire need of a

restructure. Newcrest Mining Ltd, Australia’s

largest gold producer has also seen output

falling by 13% due to a halt in operations at two

mines following the reported death of workers.

Given these potential decreases in the output of

gold, it is likely that gold prices would bounce

back towards an upward trend.

However, given the slowing down of China’s

growth, the uncertainty of the Fed’s rate hike

and the shakiness of the economy of Europe,

investors will turn to gold in times of financial

uncertainty and gold prices should start to see

a rally as the end of the year comes.

In other news, the price of palladium, which is

used in catalytic converters to filter exhaust

fumes from gasoline cars has increased by

19.5% from USD579.4 to USD692.4 since

Volkswagen rigged diesel vehicles to bypass

emissions tests in September. Platinum prices

have climbed 3.5% from USD984.3 in the last

week to reach USD1019.94 as of 20th October.

Samuel Tan

US 10 year break even rate measures inflation

NEFS Market Wrap-Up

24

Agriculturals

Over the last month the trends in corn and

coffee prices - representing grains and softs

respectively – captured the attention of many,

and still leave predictions for the coming days

difficult to forecast.

Corn prices have declined significantly since 6th

October, before which price rates had steadily

increased to $398.25/bu. But by 19th October

this value had fallen to $373.00/bu, its lowest

level since June 2014. This rapid depreciation

caused concerns for producers but, if the trend

remains stable, the reduced price may result in

other industries benefiting, such as livestock

(~35% of the corn grown consumed), as a result

of the number of animals that are fed by this

crop.

The industry continues to grow and expand

worldwide, in order to satisfy global population

growth and for the increasing production of

ethanol (~40% of the corn grown). Alongside

this, a bumper corn harvest this year boosted

supply, whilst a decrease in demand has driven

down prices of the commodity. However, the

22nd October showed a significant increase in

the price of corn by $9.25/bu compared with the

19th October, leaving a more positive prediction

that the industry can avoid more significant

losses.

Similarly, the monetary value of coffee has

been steadily declining since October 2014

(when it was $220.40/lb). The 23rd October

reflects a significant decrease to $119.70/lb, as

shown in the graph below. On 15th October the

price was still $133.70/lb with the commodity

depreciating by 6.17% by the next day. Better

than expected rainfall levels have aided the

growth of coffee, leading to similar supply side

expansion as in the market for corn – again, the

rise in supply was significant enough to

overshoot today’s demand, leading to

downward pressure on prices.

With the production of both crops being heavily

dependent on the weather, it remains to be

seen how the price of the two commodities will

fluctuate in the future – but if conditions remain

favourable, then we could see falls in the price

of both of these goods.

Goda Paulauskaite

Key Corn

Coffee


25

CURRENCIES

Major Currencies

EUR/USD

Whilst the pair initially traded flat, on Thursday

the Euro took a huge hit against the dollar after

the European Central Bank (ECB) signalled

that it would consider extending its quantitative

easing programme into 2016 and beyond,

whilst also announcing a further 20 bps cut in

the deposit rate to -40bps by December.

Investors were primed to take confidence from

the announcement, and in the day after the

announcement the FTSE Eurofirst 300 climbed

4%. Draghi appears to regard the exchange

rate as the most effective tool to influence

inflation, as a stronger euro constitutes a risk to

growth.

However, the main surprise was the back-

tracking of a previous policy pledge not to cut

the deposit rate; this raises questions as to

whether QE will be enough on its own, and I

believe this is the main force driving investors

away from the Euro. Whilst it did make some

headway in early trading on Friday, it has since

slumped further and is now at its lowest level

since August 10th. With the pair now trading

dangerously close to parity, we could now see

the euro trading 1:1 with the dollar in the run up

to years end. Next week sees the next FOMC

meeting announcement, and the release of US

GDP figures, so there is certainly room for more

downward pressure on the Euro. In Friday’s

trading, investors appeared to be consistently

shorting peaks; I believe the pair will continue

to fall next week, but may meet some strong

resistance around parity. If broken, I would

expect the euro to fall sharply, as this would be

a significant event in the pair’s history.

Recommendation:

Short EUR/USD, stop loss ~ 1.115

GBP/USD

With a 1.55 resistance dating back to August

only temporarily being broken during mid-

September, the pair continues to range down to

1.52. The pound managed to gain ground on

Thursday after better than expected retail sales

(Actual +1.9% vs Forecast +0.3%). This helped

to erode most of the dollar gains of the previous

week, with the pair finishing up at ~1.53 on

Friday. Whilst this week has been quiet and

there have been limited trading opportunities,

next week sees a flurry of announcements for

both countries, and there will certainly be

increased volatility. On Tuesday morning, the

UK releases preliminary Q3 GDP results. Later

that day the US consumer confidence is

announced, whilst Wednesday sees the Fed’s

interest rate decision and Thursday sees US

GDP released. Next week will give the market

a much better idea of where these currencies

may be heading in the coming weeks.

Adam Nelson

NEFS Market Wrap-Up

26

Minor Currencies

The Canadian dollar began this week’s trading

against the US dollar within a similar price

range to last week. The USD/CAD pair met

strong resistance when reaching the 1.305 level

and found support just above a price of 1.290.

This range was only broken once on the

previous week due to the announcement of US

CPI but quickly returned to above the 1.290

level of support.

During this week however, CAD was

considerably weakened against the dollar

because of the Bank of Canada’s Monetary

Policy Report on Wednesday October 21st. The

report stated that the bank would continue to

keep overnight interest rates at 0.5% after

cutting the rate twice previously this year.

Fundamentally this means there is lower

demand for the Canadian Dollar, as fewer

people want to buy Canadian bonds because

they yield a relatively lower return. The bank

also downgraded its forecasts for growth in the

coming 2 years because the “complex

readjustments” needed for the resource sector

to adapt to the low oil price were taking longer

than expected. News of the report caused

USD/CAD to break through its previous

resistance level of 1.305 finding new resistance

at 1.315, as shown on the graph below.

Mid-day in Friday’s trading the Canadian

Consumer Price Index (CPI) was released.

Prices fell 0.2% when they had been forecasted

to rise 0.1%. This highlighted further frailties in

the Canadian economy, as falling prices

lengthen the odds of an increase in interest

rates in the near future. CAD fell further in

trading causing the USD/CAD pair to quickly

break through its new resistance level.

Over the coming week, we can expect

USD/CAD to trade within a higher range where

the 1.315 level will become the main support

price. In previous weeks the level of 1.330 has

been highly significant and so I am expecting

resistance around this area.

Across other minor currencies, the Australian

Dollar had a quiet week with no major news.

AUS/USD was trading within a clearly defined

range between 0.720 and 0.730. Japanese Yen

had a poor week against the dollar but this was

mainly corrective after a couple of overly strong

weeks post the US non-farm payroll report. On

top of this, US retail sales were better than

forecast which also caused the Yen to decline

comparatively. Overall, USD/JPY rose from

around 119.5 at the beginning of the week to

pass the 121.0 point by Friday.

Will Norcliffe-Brown

USD/CAD 1 hour candlestick (Source: OANDA)


27

About the Research Division The Research Division was formed in early 2011 and is a part of the Nottingham Economics and Finance Society (NEFS, formerly known as NFS and UNIS). It consists of teams of analysts closely monitoring particular markets and providing insights into their developments, digested in our NEFS Weekly Market Wrap-Up. The goal of the division is both the development of the analysts’ writing skills and market knowledge, as well as providing NEFS members with quality analysis, keeping them up to date with the most important financial news. We would appreciate any feedback you may have as we strive to grow the quality and usefulness of weekly market wrap-ups.

For any queries, please contact Josh Martin at [email protected]. Sincerely Yours, Josh Martin, Director of the Nottingham Economics & Finance Society Research Division

This Publication has been prepared solely for informational purposes, and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security, product,

service or investment. The opinions expressed in this Publication do not constitute investment advice and independent advice should be sought where appropriate.

Whilst reasonable effort has been made to ensure the accuracy of the information contained in this Publication, this cannot be guaranteed and neither NEFS nor any

other related entity shall have any liability to any person or entity which relies on the information contained in this Publication, including incidental or consequential

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About the Research Division The Research Division was formed in early 2011 and is a part of the Nottingham Economics and Finance Society (NEFS, formerly known as NFS and UNIS). It consists of teams of analysts closely monitoring particular markets and providing insights into their developments, digested in our NEFS Weekly Market Wrap-Up. The goal of the division is both the development of the analysts’ writing skills and market knowledge, as well as providing NEFS members with quality analysis, keeping them up to date with the most important financial news. We would appreciate any feedback you may have as we strive to grow the quality and usefulness of weekly market wrap-ups. For any queries, please contact Jack Millar at [email protected] Sincerely Yours, Jack Millar, Director of the Nottingham Economics & Finance Society Research Division

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NEFS Market Wrap-Up Week 1