Analysis | Saudi Economy – Jadwa Chartbook – December 2015

Published: December 2, 2015

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 and key data from the December 2015 Saudi Chartbook and a link to the complete report rich with illuminating charts and graphs. SUSRIS thanks Jadwa Investment for providing this insightful report for your consideration. For detailed commentary and statistical analysis, please refer to the Jadwa December Report below and at the link.

[Complete report with key charts at this link (English and Arabic)]

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December 2015 Saudi Chartbook

Summary

Real Economy: October data showed a mixed picture for domestic economic activity. Data on consumer spending point to healthy growth, while PMI fell to its lowest point on record.

Government Finance: In October, the net monthly change to government accounts with SAMA came out positive for the first time in eleven months.

Foreign Reserves: SAMA foreign reserves fell to $644 billion in October. However, the net monthly withdrawals continued to be smaller than the first half of 2015.

Banking Indicators: In month-on-month terms, bank lending to the private sector rose by 0.8 percent. Total bank deposits fell by SR 51 billion, with independent government institutions withdrawing deposits to free up liquidity in order to purchase government bonds. The loan-to-deposit ratio rose to 83.7, its highest point since 2009.

Inflation: Inflation continued to edge upwards for the third consecutive month to reach 2.4 percent in October. Housing inflation was again the main force behind this rise as it accelerated to 4.4 percent.

Trade: In September, non-oil exports continued to trend downwards due to weaker global demand so far in 2015. Imports continued to post a year-on-year decline as well, both in value and volume terms.

Oil-Global: Brent oil prices averaged $44 per barrel (pb) during November, down from $48 pb (-10 percent) in the previous month.

Oil-Regional: Saudi Arabian crude production was flat month-on- month, at around 10.2 mbpd in October. We do not see any significant policy change at the OPEC meeting in early December.

Exchange Rates: The dollar/riyal peg remains under speculative pressure despite ample government reserves and a clear commitment by SAMA to maintain the peg. The euro dropped against the dollar in November as the likelihood of the Federal Reserve (Fed) tightening monetary policy in December increased.

Stock Market: The TASI rose by 1.6 percent, month-on-month, in November as it became apparent that it had been oversold in the previous three months.

Volumes: November turnover in the TASI was flat month-on-month.

Valuations: The improvement in the TASI’s monthly performance was reflected in the slight upward movement in the Saudi benchmark’s price-to-earnings (PE) during the month of November.

Sectoral Performance: Ten out of the 15 sectors in the TASI saw positive performance in the month of November.

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[Complete report with key charts at this link (English and Arabic)]

Source: Jadwa Investment

Fahad M. Alturki
Chief Economist and Head of Research
falturki@jadwa.com

Asad Khan
Senior Economist
rkhan@jadwa.com

Rakan Alsheikh
Research Analyst
ralsheikh@jadwa.com

Head office:
Phone +966 11 279-1111
Fax +966 11 279-1571
P.O. Box 60677, Riyadh 11555 Kingdom of Saudi Arabia

www.jadwa.com

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