Editor’s Note:
The Jadwa Investment firm in Riyadh introduced the “Saudi Chartbook” in February which 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 August 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.
[Complete report with charts, graphs and tables at this link.]
Summary
Real economy: New data point to the strengthening of the economy in June. The indicators we track recorded double-digit growth in year -on-year terms. Performance in the first half of 2010 was well above that of the first half of 2009, which was when the economy bottomed.
Bank lending: Bank lending to the private sector rebounded in June, recording its largest monthly gain since August 2009 and the second highest growth since late-2008.
Bank deposits: Bank deposits grew strongly in month-on-month terms in June, though the growth was less pronounced in annual terms as it was largely due to seasonal factors.
Inflation: Inflation rose to a one-year high in May, with food prices the main source of inflationary pressure. Moves in local food prices have lagged those in international markets, suggesting that the rate is likely to ease, though this will be tempered by Ramadan.
Trade: Imports and non-oil exports rose healthily in May and are approaching levels last seen before the global financial crisis erupted in the third quarter of 2008. Exports of plastics and minerals have risen faster than those of petrochemicals so far this year.
Oil: Oil prices have held up well given concerns about a renewed downturn in the US economy.
Exchange rates: The dollar has weakened in July as investor concerns have shifted from debt problems in the eurozone to disappointing economic data in the US.
Stock market: The TASI is up by 3 percent so far in July, despite a fairly uninspiring set of second quarter earnings. The TASI notably underperformed many global markets during the month and most of the outperformance for the year to date has been wiped out.
Second quarter earnings: Second quarter results of listed companies were generally lackluster, coming in slightly below consensus estimates.
Sectoral performance: Sectoral performance was broadly in line with market perceptions of companies’ second quarter results. Ten of the 15 sectors are up so far in July, with energy leading the way for the second consecutive month.
Sukuk: The third sukuk in the Kingdom this year was issued in July. A good response from investors indicates that demand for sukuk is high, but secondary market trading has not taken off.
For comments and queries please contact the authors:
Paul Gamble, Head of Research – pgamble@jadwa.com and Gasim Abdulkarim, Associate Director: Research – gabdulkarim@jadwa.com or: Brad Bourland, CFA, Chief Economist- jadwaresearch@jadwa.com
Head office:
Phone +966 1 2791111
Fax +966 1 2791571
P.O. Box 60677, Riyadh 11555
Kingdom of Saudi Arabia
http://www.jadwa.com
[Complete report with charts, graphs and tables at this link.]
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.
Related Material:
- Saudi Monetary Indicators for July 2010 – SUSRIS – Jul 7, 2010
- Saudi Monetary Indicators for June 2010 – SUSRIS – Jun 30, 2010
- Saudi Economic Trends – Jadwa Chartbook – June 2010 – SUSRIS – Jun 1, 2010
- Euro crisis and its impact on Saudi Arabia – Jadwa – SUSRIS – May 29, 2010
- Saudi Arabia Economics – May 2010 – SUSRIS – May 25, 2010
- Saudi Monetary Indicators for April 2010 – SUSRIS – May 25, 2010
- Vulnerability to European “Shockwaves” – Sfakianakis – SUSRIS – May 17, 2010
- Jadwa Investment May 2010 Bulletin – SUSRIS – May 17, 2010
- Greek Debt Crisis and the Kingdom – SUSRIS – May 11, 2010
- Jadwa Investment April 2010 Bulletin – SUSRIS – Apr 28, 2010
- U.S. Exports to Arab World Rebounding – SUSRIS – Apr 16, 2010
- Saudi Economic Trends – Jadwa Chartbook – April 2010
- Saudi Stock Market Report – Jadwa Investment – SUSRIS IOI – Mar 21, 2010
- Jadwa Chartbook – March 2010
- Jadwa Chartbook – February 2010
- Jadwa Investment – Home Page
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