Nawaf Y. Husein
Faculty Member
Msc, CRP , CLBB
Saudi Training Society Member
Institute of Banking
Saudi Arabian Monetary Agency ( SAMA)
P.O.Box : 10820 Riyadh 11443 Saudi Arabia
Tel : + 966 1 463 3000 Ext. 3825
Fax: + 966 1 466 2368
Mobile : + 966 55 48 44 828
SKYPE : abuhejleh2
Dear Readers,
Please find attached our second issue of the monthly NCB Saudi Economic Review.
Executive Summary
· The flow of global oil supply and demand data has been relatively positive recently, creating some momentum for demand prospects with Brent approaching USD113 per barrel.
· The situation still holds much obscurity concerning the fate of the Euro as mixed sentiments arise from weakening Chinese data and the expectation of the Euro bond short-selling ban; such ban should lay a cap on yields at current levels causing a large-scale squeeze in bonds.
· Extreme drought conditions that have plagued most of the US, affecting both their corn and soybean harvest, as well as speculative trading in anticipation of slashed production forecasts, to be released by the USDA, are applying upward pressure on prices.
· Despite experiencing suppressed interest rates, the local banking system managed to attract time and saving deposits and increase their share of M3 to 24% following their record low figure of 23% during April.
· The primary equity market is expected to remain inactive through August, yet there is one announced IPO for September to raise almost SAR100 million for City Cement Company.
· The share of medium term credit has gained to a record 17.8% as banks have been drawn to finance SMEs on larger scale to diversify their portfolios. As a result of the pickup in lending activity, the L/D ratio has been supported to reach 80.7% for June.
Best regards,
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