OCTOBER_Monthly_Snapshot_v_2_power point
                     MONTHLY 
SNOACPTSOHBOT2020
ER
M O N T H LY  H I G H L I G H T S
The day to day rise in new confirmed COVID-19 cases in many parts of the world, including countries 
where the spread of the virus had previously been partly brought under control. Renewed lockdowns of 
varying degrees, contributed to a slowdown in the pace of the recovery in many countries, with the 
Purchasing Managers’ Index(PMI) sliding 0.3 points to 52.1 in September, ending four consecutive 
months of increase.
Figure 1: Q32020 GDP Growth (%)
4.9
Global shipping volumes now exceed pre-pandemic 
levels-led by China, where both exports and imports 
have picked up sharply in recent months. The 
-1.3
number of daily commercial flights recovered to -2.9
-4.2 -4.3
about half of last year’s levels by early August, but -5.3
has shown no further increase in the month of -8.7 -8.7
China Korea USA Germany France Australia Mexico Spain
September and October.
Q32020 GDP Growth
Recent indicators show slowing momentum The number of new daily COVID-19 cases has 
amid persistently high new daily COVID-19 in 
moderated in Japan, ushering in a general 
USA cases and elevated political uncertainty, improvements  in economic conditions. Retail 
including over the prospectus of additional sales improved by 4.6% in August, regaining 
fiscal stimulus further to 0.7% in August, with the pre-pandemic level. In September, the 
real disposable personal incomes contracting services PMI increased 1.9 points to 46.9, 
by 3.5% on the back of sharply diminished while the consumer confidence index 
fiscal support. increased 3.4% to 32.7. 
China continues to be a bright spot in the 
After a period of limited spread, COVID-19 global economy, with growth improving across 
cases in Europe have been rising sharply. several components. GDP expanded 4.9% in 
Q32020, led by investment and exports. 
The Euro area composite PMI index declined 
Industrial production and manufacturing 
1.5 points to 50.4 in September, with the 
sector improving since March. Trade flows 
services PMI falling back into contractionary 
firmed in September with imports growing 
territory. 
13.2% and exports up 9.9% 
Yields on corporate bonds remained low, sovereign Figure 2: US Corporate Bond Total Return (%)
credit ratings have continued to deteriorate, 5%
reflecting increasing debt sustainability concerns. 4%
While spreads of Emerging Market and Developing 3%
Economies debt have narrowed slightly overall in 2%
October, the gap between investment grade and 
1%
high yield borrowers has widened to over 4% 
0%
points twice its level from the start of the year. 
Global equity market rebounded in October but -1%
remain sensitive to the spread of COVID-19 and -2%
the strength of the recovery, particularly in the -3%
United States. Ja Fe Ma Ap Ma Jun Jul Au Sep Oc
1
GLOBAL INDICES
Figure 3: NASDAQ Index (in $) Figure 4: Nikkei 225 Index (in JPY) 
12,500 4% 23,800 2%
23,600
12,000 2% 1%23,400
0%
11,500 23,200 0%
-2% 23,000
11,000 -1%-4% 22,800
10,500 -6% 22,600 -2%
20 20 20 0 0 0 0 0 0 0 0 0 0 2
0 20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20
2 02 02 02 02 02 2 2 2 2 0 0 0 0 0 0 0 0 0 0 0 0 0
/ / / / /2 /2 /2 /2 /2 /2
0 20 20 20 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 2 2
1 4 6 8 1 3 5 8 0 2 5/ 7/ / 1 4 6
/ /
/ / / / 1 1 1 1 2 2 2 2 29 0/ 0/ 0/ 0/
8 11 13 5 8 0 2 5 7 9
0 / / /
1 /1 /2 /2 /2 /2 /2
1 10 10 10 0/ 0/ 0/ 0/ 0/ 0/ 0/ 0/ 0/ 1 1 1 1 10 10 10 10 10 10 101 1 1 1 1 1 1 1 1
0 10
NASDAQ %1 Change Nikkei % change
Japan share market index price drop down at the 
The defensive, bond proxy utilities (+5%), were end of October, following an overnight Wall 
strong despite a surge higher in long rates. Street decline, amid renewed concerns over the 
Technology (-5.1%) and Energy (-4.4%) were the pace of the global economic recovery from the 
laggards. Financials declined a modest 0.8% pandemic after spike in COVID-19 infection in the 
however, regional banks were amongst the top- both the US and Europe. Total 24 out of 33 
performing industries. 82% of corporations have industry categories of Index ended into red 
reported EPS above estimates includes Consumer territory with Air Transportation, Mining, Rubber 
Staples(100%), Health Care(100%) and Industrials products were notable losers while Fishery, 
(50%), above 5 year average of 61% Agriculture and Forestry were notable gainers
Figure 5: Tadawul Index (in SAR) Figure 6: Hang Seng Index (in HKD) 
9,000 2% 25,500 3%
25,000 2%0%
8,500 24,500 1%
-2% 0%
8,000 24,000 -1%
-4% 23,500 -2%
7,500 -6% 23,000 -3%
20 20 20 20 20 20 20 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02
1/
2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 2 2 2 2 2 2 2 2 2 2 2
/ /4 /6 /8 11 13 5 8 0 2 5 7 9 1 4 6
/ 8/ 1/ 3/ 5/ 8/ 0/ 2/ 5/ 7/ 9/
10 10 10 10 / / /
1 /1 /2 /2 /2 /2 /2 0/ 0/ 0/ 0/ /1 /1 /1 /1 /2 /2 /2 /2 /2
T1
0 10 10 10 10 10 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 0adawul 1 1 %1 change H1ang1 Sen1g 1 1 1 1 1 %1 change
At the end of October 2020 Tadawul All shares 
Index closed at 7,907.72 points, decreasing by The Hong Kong market rebounded in October in 
391.36 (4.6%) points over the close of previous response to China’s expected economic recovery. 
months. Consumer Durables and Apparels index The Hang Seng Index(HSI) rose by 2.8%. 
drops by 18%, Diversified Financials Index down by Information Technology was the best 
17.8% and Media and Consumer services indices performer(+12.8%), while Telecommunications 
declining by 14.7%. The small cap software services fared the worst(-4.4%). Funds raised through 
sectors gained 11% followed by utilities and food IPOs for the first ten months of 2020 was $249.1 
and staples retailing indices by 8.4% and 3.3% bn, an increase of 66% Y-o-Y.
respectively.
Figure 7: Euro Stoxx 50 Index (in USD) 
October saw shares fall in the Eurozone as several 
40 4%
countries reintroduced lockdowns amidst rising 
38 2%
36 0% COVID-19 infection rates. IT market saw the 
34 -2% steepest falls. The Eurozone economy expanded 
32 -4% by 12.7% in the third quarter of 2020 as the 
30 -6% activity rebounded over the summer. With many 
earning release in October, Europe’s biggest 
companies, from cement makers to car 
Euro STOXX % change manufacturers to engineering firms and airlines 
warned of weaker margins.
2
B O N D S
Markets were volatile in October, with mixed performance from bonds. Corporate bonds as compared to 
Government bonds held up well overall. Concerns around COVID-19 were heightened. An increase of 
cases in Europe resulted in reintroduction of lockdowns in Germany and France toward month-end and 
case numbers remained elevated in the US. 
The middle of the month was positive over a progress in stimulus package. Democrat presidential 
candidate Joe Biden, who favors a large stimulus, continued to lead in the polls. Sentiment reversed 
sharply in the last week of the month, on concerns over COVID-19, with the US dollar gaining against the 
euro (0.5% M-o-M to 0.8562Euro per Dollar) and finishing slightly higher on the month.
Conditions in October become more challenging for Figure 8: 10 Year Treasury Rate
Australian investors after weakening of Aussie dollar 
2%
(5.4% against US$) against all major countries in 
2%
global bonds. The US 10-year Treasury yield rose by 
19 basis points (bps) to 0.87%, with the 2-year to 1%
10-year yield curve steepening by 16bps. European 1%
10-year yields fell by 10bps across the board amid 0%
the continued resurgence of Covid-19. The -1%
heightened risk and uncertainty in the region have -1%
prompted buying of risk-free sovereign bonds Jan Feb Mar Apr May June July Aug Sept Oct
leading to their yields moving lower into the 
negative territory. Germany’s 10-year yield finished 
US Eurozone Germany Italy
at -0.63% and France’s at -0.34%. In the “periphery”, 
Italy’s 10-year yield dropped to 0.76%. The uncertainty around the Brexit sovereign bond yield rose in 
October. The UK 10-year yield was 3bps higher at 0.26%. Economic indicators for Europe and the UK 
pointed to a loss of momentum, with Europe dipping back into contractionary territory.
Figure 9: Benchmark Indices
Most Frequently Used Fixed Income Indices 1mo QTD YTD 1yr 3yr 5yr 10yr
Bloomberg Barclays US Aggregate 0.45 0.45 6.32 6.19 5.06 4.08 3.55
Bloomberg Barclays Intermediate US Aggregate 0.17 0.17 4.99 5.08 4.14 3.25 2.89
Bloomberg Barclays US Credit 0.22 0.22 6.15 6.66 5.99 5.60 4.88
BofA Merrill Lynch 1-3 year Treasury 0.04 0.04 3.01 3.19 2.65 1.81 1.25
BofA Merrill Lynch US High BB-B 2% Constrained 0.47 0.47 1.03 3.29 4.42 6.07 6.11
FTSE 3 Month T-Bill 0.01 0.01 0.56 0.86 1.62 1.16 0.60
FTSE USBIG 0.45 0.45 6.44 6.32 5.15 4.14 3.57
Figure 10: Unemployment Rate 2020(%) Corporate bonds outperformed government bonds. US 
12% investment grade debt saw a marginal negative total 
10% return (local currency), as yields rose, but was 
10% comfortably ahead of US Treasuries. Eurozone investment 
8% 7% grade returned 0.8%. Corporate bonds held up relatively 
well amid the sharp reversal in sentiment in the last week 
6% of the month.
4% 4%
4% 3% Convertible bonds proved very resilient versus equities. 
The Thomson Reuters Global Focus index, which 
2% measures balanced convertible bonds, registered a 
0% positive return in the falling equity market environment. 
US Eurozone Germany Italy UK The index returned 0.4% compared to -2.5% for the MSCI 
World global equity index. Convertible bond valuations 
became slightly more expensive, albeit from a low base.
3
FIXED INCOME
Japanese government bond yield rose across the 
curve- The 10 Year Japanese government bond The European Central bank(ECB)- The President 
yield touched highest level for a month to 0.04%, of ECB suggested flooding the financial system 
while longer maturity bond yields- such as those with liquidity. Consumer inflation is negative for 
on 30 and 40 year instruments- rising to their three consecutive months. In contrast, GDP 
highest levels by 2bps to 0.625% and 0.650% growth for the third quarter expanded 12.7% from 
respectively since early July resulting from positive the previous period as lockdown restrictions were 
effect from fiscal and monetary policy. eased.
US corporate spreads tightens- Spreads fell 2bp to 
126bp owing to very strong demand from Asian 
investors, particularly in Taiwan. Bank earnings US consumer inflation rose to 1.4% on an annual 
were largely better than expected. basis in September- The highest growth rate 
marked in the series since March and was also 
fourth successive month of acceleration in the 
inflation rate since it troughed in May at 0.1%. 
UK unemployment rose to its highest level since May 2017- Unemployment rose to 4.5% in the three 
months to the end of August, a significant pickup from 4.1% in the three months to July. With the 
chancellor’s furlough scheme due to finish at the end of the month, being replaced by the less generous 
job support scheme, unemployment is widely expected to rise much further from current levels. The UK 
10-year yield was 3bps higher at 0.26%. 
China’s third-quarter GDP expanded 4.9%  Y-o-Y- 
Continuous recovery from the COVID-19 shock 
China’s first ever direct Government bond with expansion in consumption, in September, 
auction to US investors attracted record demand- retail sales rose 3.3% Y-o-Y, increase in industrial 
The Chinese government issued a $6bn production by 6.9% Y-o-Y. The yuan is now 
government bond directly to US investors during approaching 6.6 per US dollar, its strongest level 
the week. The issue was more than four times since July 2018, supported by firmer guidance 
covered, attracting $27bn of orders, as investors from the People’s Bank of China and the recent 
looked to lock into the higher relative yields on improvement in domestic economic data.
offer across a range of maturities.
The World Bank forecasts the lowest Asian 
growth rate for over 50 years- In a sombre 
The Bank of England sounded out banks on the 
assessment of the region’s growth prospects for 
prospect of negative interest rates- The central 
2020, the World Bank expects the Asian economy 
bank conferred with banks over their readiness to 
to expand by just 0.9%, which would mark the 
cope with negative interest rates setting a 
lowest growth rate since 1967. While the 
deadline of 12 November for a formal response. 
organisation expects China to grow, albeit by only 
At the same time, there are growing expectations 
2%, the rest of the region is likely to contract by 
that the Bank will raise the size of its monthly 
3.5%.
bond-purchasing programme, currently set at 
£745bn
4
C O M M O D I T I E S
Commodities, as measured by the S&P GSCI Index, registered a negative return. Energy was the weakest 
component with crude oil falling sharply on concerns over demand related to the coronavirus. Livestock 
and precious metals also lost ground, though they fell by less than the index. Industrial metals rose, 
aided by strong gains for copper and zinc, and agricultural commodities posted positive returns.
Figure 11: Commodities Price Data
Energy August 31, 2020 September 30, 2020 October 31, 2020
Coal Australia ($/mt) 50.1 54.6 58.4
Coal South Africa ($/mt) 57.4 57.5 61.0
Crude Oil, average ($/bbl) 43.4 40.6 39.9
Crude Oil, Brent ($/bbl) 44.3 41.1 40.5
Crude Oil, Dubai ($/bbl) 43.7 41.1 39.7
Natural Gas, Index (2010=100) 45.8 46.1 53.6
Natural Gas Europe ($/mmbtu) 2.9 4.0 4.9
Agriculture August 31, 2020 September 30, 2020 October 31, 2020
Cocoa ($/kg) 2.35 2.46 2.29
Tea, average ($/kg) 3.15 3.08 2.98
Tea, Kolkata ($/kg) 4.07 3.86 3.50
Coconut Oil ($/mt) 981.00 1,034.00 1,118.00
Soybean Meal ($/mt) 375.00 408.00 466.00
Rice, Vietnam ($/mt) 448.90 462.70 459.20
Wheat, US, SRW ($/mt) 208.90 219.70 245.20
Metals August 31, 2020 September 30, 2020 October 31, 2020
Aluminum ($/mt) 1,737.00 1,744.00 1,806.00
Copper ($/mt) 6,499.00 6,705.00 6,714.00
Iron ore ($/dmt) 121.11 123.80 119.80
Lead ($/mt) 1,936.00 1,873.00 7,776.00
Figure 12: Global Energy Mix Q32020 Figure 13: Crude Oil Spot Prices
Source % share 120
100
Oil 31%
80
Coal 27%
60
N. Gas 23%
40
Nuclear 5%
20
Hydro 3%
0
Renewable 11% 2 4 2- 0- 2- 1 7- - - - - - - - - - - -1 0 2 1 0 2 0 29 21 3 507 26 18 06 27 15 07 25 1 0 27 14 02
The uncertainty created by Covid-19 shows little sign of reduction. Global demand for oil from January 
to July was 10.5 mb/d below last year’s level. In August, the first impact of the easing of OPEC+ 
production cuts from 9.7 mb/d to 7.7 mb/d. After 4% drop in 2020, natural gas demand is expected to 
progressively recover in 2021 as consumption returns close to its pre-crisis level in mature markets, 
while emerging markets benefits from economic rebound and lower natural gas prices. 
5
CORPORATE NEWS
Biggest Software IPO Ever Double in Debut
Data-warehousing cloud platform Snowflake jumped 112% in its spectacular first day of trading on the 
New York Stock Exchange on September 16. At $3.4 bn, it was the largest IPO of the year to date, and 
the biggest software IPO ever-more than double that of Dell-backed VMware, which raised just under $1 
bn in 2007. 
$45-50 bn in IPO 2021
Flipkart is preparing for an IPO overseas by 2021 
and expecting a valuation of up to $45-50 bn.
Flipkart, which is incorporated in Singapore, is Hawaii officially Reopen
planning it’s listing in the United States, where for Tourism
parent Walmart is headquartered. This could give it Tourism is the largest single source of private 
access to a large pool of funds. capital for Hawaii’s economy. In 2019, Hawaii’s 
tourism economy has recorded visitor spending 
$17.75 bn an increase of 1.4% Y-o-Y. 
Hawaii reopens for tourism after national 
Stimulus Package by Italy lockdown taking complete precautions. 
Figure 14: Number of Visitors
Italy has approved new stimulus package in its 3,000,000
2021 budget to foster an economic rebound from 2,500,000
the recession caused by the coronavirus crisis. 2,000,000
1,500,000
Expansionary measures in 2021 will total more 1,000,000
than 39 bn Euros ($45.7 bn). Along with this, the 500,000
government has set up a 4 bn Euro fund to 0
compensate companies worst hit by coronavirus 
lockdowns.
Rolls-Royce looks to raise $2.6 bn
Rolls-Royce has announced plans to raise €2 bn 
Figure 15: Revenue ($ bn) in a rescue right issue, as well as drawing in 
21.0 20.3 government support for a new debt package of 
20.0
up to €3 bn, in an attempt to bolster a balance 
19.0
18.0 17.5 sheet badly hit by the pandemic. 17.4
17.0 17.1
17.0 Shareholders are being offered 10 shares at 32p 
16.0 each for every three they own, at 41% discount 
15.0 based on the theoretical post-rights price. 
2015 2016 2017 2018 2019 This helps the Company to improve its liquidity 
headroom and reduces the balance leverage, 
meanwhile supporting disciplined execution of 
investments to ensure maximum value for 
existing capabilities. 
6
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