Analysis | Saudi Economy: September 2013 Jadwa Chartbook

Published: September 1, 2013

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 September 2013 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 with key charts at these links. [English & Arabic]]

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September 2013
Saudi Chartbook

Summary

Real Economy: New data suggest that the economy picked-up in July. Key indicators of consumer and corporate spending improved in year-on-year and month-on-month terms. Cement production and sales declined in line with the seasonal trend.

Bank lending: Bank claims on the private sector slowed in July. This appears related to seasonal factors rather than a change in risk appetite. New data also show that lending to individual consumers rose at a much faster pace than lending to companies.

Banking deposits: Bank deposits recorded a small gain in July. The amount of excess bank reserves at SAMA fell to its lowest level since end 2008. Loan-to-deposit ratio rose to a nine-month high.

SAMA foreign assets: Elevated oil prices maintained a positive trend for SAMA’s net foreign assets, though the level of accumulation slowed this year on the back of lower oil production. Foreign assets of independent government organizations also reached a new high.

Inflation: Year-on-year inflation ticked up in July, driven by an increase in rental and food inflation. The latter recorded the highest year-on-year inflation in four years. Inflation for most other components of the cost of living index declined.

Trade: Non-oil exports rose in June with both petrochemical and plastic rebounding, but imports fell slightly. New letters of credit opened for imports suggest a recovery in the next few months.

Remittances: Remittance outflows have risen to a record high so far this year on the back of strengthening dollar and domestic labor market reform.

Oil: Higher-than-expected supply disruption and intensification of conflict in the Middle East have pushed oil prices higher in August. The Kingdom’s oil production picked up in the last three months, maintaining elevated oil export revenues.

Exchange rates: The main move over August has been the continued weakening of emerging market currencies speculation that the US Federal Reserve will start cutting bond purchases this month. The return to growth in the euro zone supported the euro against the dollar.

Stock market: After five months of positive performance, the TASI fell in August. Escalation of the unrest in Syria has weighed on the general market sentiment.

Sectoral performance: Twelve sectors fell in August. In general, those sectors with strong economic fundamentals were among the best performers, while smaller sectors were the worst performers.

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[Complete report with key charts at these links. [English & Arabic]]

For additional questions and comments please contact the author, Jadwa Senior Economist Fahad Alturki at falturki@jadwa.com

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