Editor’s Note:
The Jadwa Investment firm in Riyadh introduced the “Saudi Chartbook” to provide a quick, chart-based briefing on the key developments and trends in the Saudi economy and stock market. SUSRIS is pleased to provide the summary from the October Saudi Chartbook and links to the complete reports in English and Arabic, rich with illuminating charts and graphs. SUSRIS thanks Jadwa Investment for providing this insightful report for your consideration.
[Complete report at these links. [English][Arabic]]
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October 2012
Saudi Chartbook
Summary
Real Economy: Recent quarterly data shows that the Saudi economy expanded by 5.5 percent year-on-year in the second quarter. Latest data point to a modest pickup of consumer spending while cement sales slowed further in August.
Bank Lending: Monthly growth in bank lending to the private sector slowed for the second consecutive month. The share of credit with short- and medium-term maturity maintained a gradual upward trend while banks reduced their holding of government securities.
Bank Deposits and Liquidity Measures: Demand and quasimonetary deposits led a gradual expansion in overall deposits while time and saving deposits shrunk. A smaller expansion in deposits pushed the L/D ratio to 82.7 percent, a two-year high in August.
SAMA Net Foreign Assets: SAMA net foreign assets expanded by $8.5 billion in August compared to $0.6 billion a year ago. The increase probably reflects the transfer of oil revenues in the last few months which benefited from elevated production and firm prices.
Inflation: Year-on-year inflation eased again in August reaching the lowest levels since October 2009 mostly due to large base effect. While food rose on the back of seasonal factors, rent slowed to the lowest month-to-month rate in six years.
Trade: Non-oil exports contracted by 8 percent year-on year in July while imports dropped at a faster rate of 13.4 percent. Total letters of credit opened for new imports maintained the previous month level in August, though it is tilted toward food product imports.
Oil: Oil prices held reasonably well in September with an average of $113 per barrel for Brent. Geopolitical risks and weaker dollar are the main upward drivers while soft global recovery is the main downward risk factor.
Exchange Rates: While the recent announcement of an open-ended balance sheet expansion by the Fed is weakening the USD against major and emerging market currencies, concerns over development in Spain have limited the euro gain.
Stock Market: After two consecutive months of gain, the TASI fell 4.1 percent in September. The decline was in line with global stock markets as concerns of the global recovery increase.
Sectoral Performance: with the exception of the insurance sector, all sectors of the Saudi stock market contracted in September.
For additional questions and comments please contact the author, Jadwa Senior Economist Fahad Alturki at falturki@jadwa.com
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