Weekly Economic Update Sunday, 18 March 2012 1
Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 % % Bn Euro Weekly Economic Update Sunday, 18 March 2012 Recent Macroeconomic Developments Global The global economic recovery on the right track, but downside risks exist Strong economic indicators in the US in recent months, coupled with the latest European initiatives to solve the eurozone s debt crisis, will pull the global economy from the brink of danger, according to the IMF boss, Christine Lagarde. The US manufacturing sector, along with positive employment data, has been vibrant in recent months, growing by 5.3% on an annual basis. In Europe, besides the recent successful restructuring of the Greek debt, exports from the Euro Zone increased by 11% in January 2012, aided by a surge in German exports of cars and machinery, which helped to reduce the bloc's trade deficit by 60%, to 7.6 billion compared with 16.1 billion two years ago. But high debt levels in developed markets, rising oil prices and overheating pressures in emerging markets still constitute key risks that need to be managed carefully and decisively. Efforts aimed at creating jobs and boosting growth and competitiveness, especially in highly indebted countries, should be pursued vigorously to bring back the world economy on course. US Manufacturing Production Index (chg y/y) Euro Zone Trade 95 94 93 92 91 90 89 88 30 25 20 15 10 5 0 Trade deficit (RHS) Exports growth rate (LHS) 15 10 5 0-5 -10-15 -20 Source: Thomson Reuters 2
SAR billion Weekly Economic Update Sunday, 18 March 2012 Recent Macroeconomic Developments GCC Saudi healthcare investment to surge sharply Saudi Arabia healthcare investment is expected to increase significantly over the next three years due to a rise in demand for medical facilities and a wide range of healthcare services. Total healthcare expenditure in the Kingdom nearly reached SAR70 billion in 2010, up from SAR61 billion in the previous year, and on current trends (a CAGR of 12.3%) it is estimated to exceed SAR90 billion by 2015. Demographic factors such as a growing population, which currently exceeds 28 million, coupled with higher technological progress, are fuelling innovation in the healthcare sector across the country. The public sector will, however, continue to account for the lion s share of investment in the healthcare sector with around 62% of the total healthcare expenditure. 100 90 80 70 60 50 40 30 20 10 0 Saudi Arabia Healthcare Expenditure 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011e 2015F Government Private Source: WHO; Gulf One 3
Weekly Economic Update 17-Feb-12 19-Feb-12 21-Feb-12 23-Feb-12 25-Feb-12 27-Feb-12 29-Feb-12 02-Mar-12 04-Mar-12 06-Mar-12 0 17-Feb-12 19-Feb-12 21-Feb-12 23-Feb-12 25-Feb-12 27-Feb-12 29-Feb-12 02-Mar-12 04-Mar-12 06-Mar-12 0 Sunday, 18 March 2012 COMMODITIES 130 128 Brent Oil Price (US$/barrel) 1790 1770 1750 Gold Price (US$/ounce) 1730 126 1710 1690 124 1670 122 1650 1630 As March 16 (US$) Current Week Ago Weekly Change Brent Oil (barrel) 126.24 129.93-2.84 Gold (ounce) 1660.04 1712.59-3.07 Silver (ounce) 32.50 34.30-5.25 Copper (pound) 3.85 3.81 1.18 Aluminium (kilo) 2.20 2.18 1.15 Source: Thomson Reuters 4
Weekly Economic Update Sunday, 18 March 2012 16-Feb-12 17-Feb-12 18-Feb-12 19-Feb-12 20-Feb-12 21-Feb-12 22-Feb-12 23-Feb-12 24-Feb-12 25-Feb-12 26-Feb-12 27-Feb-12 28-Feb-12 29-Feb-12 01-Mar-12 02-Mar-12 03-Mar-12 04-Mar-12 05-Mar-12 06-Mar-12 07-Mar-12 0 0 16-Feb-12 17-Feb-12 18-Feb-12 19-Feb-12 20-Feb-12 21-Feb-12 22-Feb-12 23-Feb-12 24-Feb-12 25-Feb-12 26-Feb-12 27-Feb-12 28-Feb-12 29-Feb-12 01-Mar-12 02-Mar-12 03-Mar-12 04-Mar-12 05-Mar-12 06-Mar-12 07-Mar-12 0 0 Currencies Current ( 16 March 2012) Week Ago Weekly Change International $1 $1 (%) Euro 0.759 0.762-0.394 GBP 0.631 0.638-1.097 Yen 83.325 82.500 1.000 CNY 6.325 6.308 0.269 INR 50.180 49.850 0.662 CHF 0.916 0.920-0.446 GCC AED 3.670 3.670 0.000 BHD 0.380 0.380 0.000 KWD 0.278 0.279-0.358 OMR 0.390 0.390 0.000 QAR 3.640 3.640 0.000 SAR 3.750 3.750 0.000 0.83 0.80 0.77 0.74 0.71 0.68 0.65 0.62 0.59 81 80 79 78 Euro, Yen & Pound vs Dollar Euro (LHS) Pound (LHS) Yen (RHS) The Dollar Index 84.5 83.0 81.5 80.0 78.5 77.0 75.5 74.0 Source: Thomson Reuters 5
Weekly Economic Update Sunday, 18 March 2012 Stock markets 13300 13250 13200 13150 13100 13050 13000 12950 12900 12850 12800 3600 3580 3560 3540 3520 3500 3480 3460 DowJones 2.40% 13,233 CAC40 3.08% 3,595 3080 3060 3040 3020 3000 2980 2960 2940 2920 2900 5980 5960 5940 5920 5900 5880 5860 NASDAQ 2.24% 3,055 FTSE100 1.33% 5,966 1410 1405 1400 1395 1390 1385 1380 1375 1370 1365 1360 10170 10120 10070 10020 9970 9920 9870 9820 S&P500 2.43% 1,404 Nikkei225 2.02% 10,130 Source: Thomson Reuters 6
7-Mar-12 7-Mar-12 6-Mar-12 7-Mar-12 7-Mar-12 Weekly Economic Update Sunday, 18 March 2012 7-Mar-12 Stock markets Abu Dhabi 2.50% 2660 2,626 2640 2620 2600 2580 2560 2540 Kuwait 0.38% 6210 6,200 6200 6190 6180 6170 6160 6150 6140 5990 5970 5950 5930 5910 5890 5870 5850 5830 5810 8670 8660 8650 8640 8630 8620 8610 8600 8590 8580 Doha 0.77% 8,660 Muscat 1.57% 5,951 1710 1700 1690 1680 1670 1660 1650 1640 1630 1620 1610 1600 7610 7580 7550 7520 7490 7460 7430 7400 7370 7340 Dubai 4.53% Saudi 2.62% 7,568 1,683 Source: Zawya 7
Weekly Economic Update Sunday, 18 March 2012 Stock markets Stock Exchange Current A Week Ago Weekly Change (16 March) (%) Dow Jones (US) 13,233 12,922 2.40 Nasdaq (US) 3,055 2,988 2.24 S&P500 (US) 1,404 1,371 2.43 CAC40 (FR) 3,595 3,487 3.08 FTSE100 (UK) 5,966 5,887 1.33 Nikkei225 (JP) 10,130 9,930 2.02 Abu Dhabi 2,626 2,562 2.50 Bahrain 1,152 1,161-0.78 Doha 8,660 8,594 0.77 Dubai 1,683 1,610 4.53 Kuwait 6,200 6,177 0.38 Muscat 5,951 5,859 1.57 Saudi Arabia 7,568 7,375 2.62 Source: Thomson Reuters and Zawya 8
Weekly Economic Update Sunday, 18 March 2012 Miscellaneous GULF projects Projects planned or under way Projects planned or under way Change on week (%) Projects planned or under way Change on year (%) 6-Mar-12 13-Mar-11 ($m) ($m) ($m) Bahrain 62,246 62,196 0.08 68,851-9.59 Kuwait 198,608 195,180 1.76 151,111 31.43 Oman 113,508 117,202-3.15 100,874 12.52 Qatar 222,801 223,920-0.50 226,052-1.44 Saudi Arabia 740,314 741,750-0.19 676,583 9.42 UAE 564,580 557,884 1.20 619,167-8.82 GCC 1,902,057 1,898,132 0.21 1,842,638 3.22 Iran 300,893 300,689 0.07 305,810-1.61 Iraq 308,775 305,014 1.23 262,967 17.42 Gulf Total 2,511,725 2,503,835 0.32 2,411,415 4.16 Source: MEED 9
Weekly Economic Update Sunday, 18 March 2012 Gulf One Investment Bank B.S.C. (c) is a Bahrain registered bank whose vision is to be the leading knowledge-based infrastructure investment bank in the MENA (Middle East and North Africa) region. Its mission is to mobilise local and global capital to accelerate the execution of infrastructure projects via innovative custom made financial solutions. This Weekly Economic Update has been prepared by staff in the Research Department of Gulf One Investment Bank B.S.C. (c) under the general direction of Dr. Nahed Taher, Founder & CEO of Gulf One Investment Bank. The Research team comprises: Dr. Mohammed Salisu Chief Economist Gulf One Investment Bank E-mail: m.salisu@gulf1bank.com Ms. Lobna Bousrih Research Analyst Gulf One Investment Bank l.bousrih@gulf1bank.com Ms. Sana Harrabi Research Analyst Gulf One Investment Bank s.harrabi@gulf1bank.com All comments and enquiries about this Economic Update should be sent to Dr. Mohammed Salisu at the above mentioned e-mail address. Disclaimer This Weekly Economic Update was prepared by Gulf One Investment Bank B.S.C (c), ( Gulf One ) and is of a general nature and is not intended to provide specific advice on any matter, nor is it intended to be comprehensive or to address the circumstances of any particular individual or entity. This material is based on current public information that we consider reliable at the time of publication, but it does not provide tailored investment advice or recommendations. It has been prepared without regard to the financial circumstances and objectives of persons and/or organisations who receive it. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. In addition, the views expressed in this Economic Update do not necessarily represent the views of the Management or Board of Directors of Gulf One Investment Bank. This Weekly Economic Update or any portion hereof may not be reprinted, sold or redistributed without the prior written consent of Gulf One. 10