Saudi Economy: Jadwa December 2011 Chartbook

Published: December 3, 2011

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Editor’s Note:

The Jadwa Investment firm in Riyadh introduced the “Saudi Chartbook” last year. It provides a quick, chart-based briefing on the key developments and trends in the Saudi economy and stock market for the previous month. SUSRIS is pleased to provide the summary from the September Saudi Chartbook and a link to the complete report which is rich with illuminating charts and graphs. SUSRIS thanks Jadwa Investment’s Chief Economist, Brad Bourland, and Head of Research, Paul Gamble, for providing this insightful product for your consideration.

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[Complete report with charts, graphs and tables at this link.]

Summary

Real economy: Indicators of consumer spending picked up in October in both absolute and year-on-year terms, which is encouraging given the heightening problems in the global economy. Cement sales recovered after Ramadan and Eid al-Fitr.

Bank lending: Bank lending to the private sector rose at the fastest pace in two years in October. Although interbank rates have continued to creep up, the increase in lending suggests that banks are not yet unduly concerned about the potential spread of stresses in Eurozone banks.

Money supply: Money supply growth jumped in October, driven largely by a jump in government foreign currency deposits. Total bank deposits hit a new all-time high even though time and savings deposits were near a four-year low.

Inflation: Inflation fell slightly in October owing to a fall in food price inflation. Most other components of the cost of living index rose, with rental inflation up for the fifth consecutive month.

Current account: The current account surplus rose in the second quarter owing to higher oil revenues. Import growth was reasonably sluggish. Inflows of investment income were at an all-time high and outflows of workers remittances were only a little off their peak.

Oil: Oil prices have generally been fairly stable over the past month, oscillating in line with concerns about the Eurozone. Technical factors have caused a significant narrowing of the differential between Brent and WTI.

Exchange rates: The deepening Eurozone crisis and deteriorating economic data has pushed the euro down against the dollar. The Egyptian pound has slipped to a psychologically important level against the dollar and the Indian rupee has fallen sharply.

Click here for the original report with charts and graphs.

Stock market:The TASI fell by 1.9 percent in November, owing to expectations of slower fourth quarter earnings growth and movements in global markets. Volumes rose for the fourth month in a row, but were mostly driven by high speculative activity.

Sectoral performance: Only six sectors were up in November, led by the smaller sectors that have been the target of heavy speculative activity in recent months. All of the main sectors fell, which may point to investor concern about the impact of global economic strains.

Valuation: The price-to-earnings ratio of the TASI is close to its low point since April 2009. However, falls in stock markets across the world mean that it is still not cheap when compared to leading global, emerging and regional markets.

[Complete report with charts, graphs and tables at this link.]

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About Jadwa Investment – Jadwa Investment is a Saudi Closed Joint Stock company operating under the supervision of the Saudi Arabian Capital Markets Authority (CMA). Under the CMA decision published on August 21, 2006, Jadwa was awarded a license to offer all types of investment services including dealing, managing, custody, arranging and advising. All investment services offered by Jadwa Investment are supervised by a Shariah Supervisory Board and are fully Shariah-compliant.

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