FYI
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 third issue of the monthly NCB Saudi Economic Review.
Executive Summary
· Crude oil and products are in backwardation, which means the price of oil for delivery at a future date is lower than the spot price, signals strengthening demand from refineries for prompt crude amid tightening supplies.
· We do believe that the increased money supply (QE3) will flow towards equities and currencies, in particular, those of the emerging economies, which will be USD negative as witnessed over the last couple of days since the announcement.
· FOMC's decision of QE3 will likely support gold above the USD1,700/ ounce, a level which had been breached post the announcement.
· Local banks increased their cash in vault levels to reach SAR20.7 billion to accommodate the spending spree of Ramadan season. The trend was also witnessed in currency outside banks with a rise of SAR2.0 billion over June.
· Tadawul is expected to continue its slow positive pace as global systematic risks pressure investors' risk appetite. Stocks prices remain attractive as the market's price to earnings ratio stood at 12.6 by the end of last month.
· The decelerating rate of total deposits, compared to last year, which currently stands at SAR1.2 trillion has pushed the loans-to-deposits ratio up to 82.4%, the highest since August 2010.
· China tops the list imports source with 13.6% of imports, followed by the US which comes in second place as an importer, capturing 12.5%.
Best regards,
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