Weekly Economic Update Sunday, 29 January 2012 1
Weekly Economic Update % 2008-Q1 2008-Q2 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 2011-Q4 Sunday, 29 January 2012 Recent Macroeconomic Developments Global US growth gathers pace; eurozone comes to grip with further downgrades The U.S. economy grew at its fastest pace for nearly two years in the 4th quarter of 2011. Real GDP growth rate rose from 1.8% in the 3 rd quarter of 2011 to 2.8% in the 4 th quarter, albeit lower than the 3% forecasted by analysts. The economy was largely boosted by rebuilding of inventories, without which the economy grew at a mere 0.8%, a sharp step down from the preceding period's 3.2% pace, pointing to a weaker domestic demand. This might represent a risk of slower business spending in early 2012 even though overall opinion suggests that there was no sign businesses were uncomfortable yet with the amount of inventory they had on hand (Thomson Reuters). In contrast, Europe s economic woes were confounded by further downgrades of sovereign credit ratings of some eurozone countries by the Fitch rating agency. This came at a time when Greece is yet again at the receiving end of controversy surrounding the deadlock in negotiations with private sector holders of its debt as well as widespread speculations that it should hand over control of its finances to EU officials in Brussels. Despite the downgrades and the ongoing debt crisis, the euro is unlikely to slip further as the 26 out of 27 EU countries would step up efforts to finalise the fiscal compact agreed upon last month. 4 2 0-2 -4-6 -8-10 US: % change in real GDP 2.8 Fitch ratings To From Outlook Belgium AA AA+ Negative Cyprus BBB- BBB Negative Ireland A- A- Negative Italy A- A+ Negative Slovenia A AA- Negative Spain A AA- Negative Source: Thomson Reuters, Fitch 2
Weekly Economic Update 30-Dec-11 01-Jan-12 03-Jan-12 05-Jan-12 07-Jan-12 09-Jan-12 11-Jan-12 13-Jan-12 15-Jan-12 30-Dec-11 01-Jan-12 03-Jan-12 05-Jan-12 07-Jan-12 09-Jan-12 11-Jan-12 13-Jan-12 15-Jan-12 Sunday, 29 January 2012 COMMODITIES 115 114 113 112 111 110 109 108 Brent Oil Price (US$/barrel) 1740 1720 1700 1680 1660 1640 1620 1600 1580 1560 Gold Price (US$/ounce) As Jan 27 (US$) Current Week Ago Weekly Change Brent Oil (barrel) 111.25 108.95 2.11 Gold (ounce) 1738.4 1666.4 4.32 Silver (ounce) 33.75 31.65 6.64 Copper (pound) 3.88 3.79 2.37 Aluminium (kilo) 2.23 2.18 2.43 Source: Thomson Reuters 3
Weekly Economic Update Sunday, 29 January 2012 27-Dec-11 28-Dec-11 29-Dec-11 30-Dec-11 31-Dec-11 01-Jan-12 02-Jan-12 03-Jan-12 04-Jan-12 05-Jan-12 06-Jan-12 07-Jan-12 08-Jan-12 09-Jan-12 10-Jan-12 11-Jan-12 12-Jan-12 13-Jan-12 14-Jan-12 15-Jan-12 16-Jan-12 27-Dec-11 28-Dec-11 29-Dec-11 30-Dec-11 31-Dec-11 01-Jan-12 02-Jan-12 03-Jan-12 04-Jan-12 05-Jan-12 06-Jan-12 07-Jan-12 08-Jan-12 09-Jan-12 10-Jan-12 11-Jan-12 12-Jan-12 13-Jan-12 14-Jan-12 15-Jan-12 16-Jan-12 Currencies Current ( 27 Jan 2012) Week Ago Weekly Change International $1 $1 (%) Euro 0.756 0.773-2.199 GBP 0.636 0.642-0.935 Yen 76.720 76.950-0.299 CNY 6.290 6.332-0.663 INR 49.320 50.320-1.987 CHF 0.920 0.934-1.499 GCC AED 3.670 3.670 0.000 BHD 0.380 0.380 0.000 KWD 0.277 0.278-0.360 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 82 81 80 79 78 77 76 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 4
Weekly Economic Update Sunday, 29 January 2012 Stock markets 3400 3390 3380 3370 3360 3350 3340 3330 3320 3310 3300 12780 12760 12740 12720 12700 12680 12660 12640 12620 12600 DowJones CAC40 0.16% 3,319 0.47% 12,660 2830 2820 2810 2800 2790 2780 2770 5800 5790 5780 5770 5760 5750 5740 5730 5720 5710 NASDAQ 1.07% 2,817 FTSE100 0.09% 5,733 1328 1325 1322 1319 1316 1313 1310 8910 8890 8870 8850 8830 8810 8790 8770 8750 8730 8710 S&P500 0.07% 1,316 Nikkei225 0.85% 8,841 Source: Thomson Reuters 5
Weekly Economic Update Sunday, 29 January 2012 Stock markets Abu Dhabi 2.28% 2410 2,,390 2390 2370 2350 2330 2310 2290 Kuwait 0.93% 5870 5,852 5850 5830 5810 5790 8590 8530 8470 8410 8350 5600 5595 5590 5585 Doha 0.32% 8,435 Muscat 0.25% 5,596 1420 1400 1380 1360 1340 1320 1300 6500 6480 6460 6440 6420 6400 6380 6360 Dubai 5.88% 1,406 Saudi 1.55% 6,477 5770 5580 6340 Source: Zawya 6
Weekly Economic Update Sunday, 29 January 2012 Stock markets Stock Exchange Current A Week Ago Weekly Change (27 Jan) (%) Dow Jones (US) 12,660 12,720-0.47 Nasdaq (US) 2,817 2,787 1.07 S&P500 (US) 1,316 1,315 0.07 CAC40 (FR) 3,319 3,324-0.16 FTSE100 (UK) 5,733 5,729 0.09 Nikkei225 (JP) 8,841 8,766 0.85 Abu Dhabi 2,390 2,337 2.28 Bahrain 1,138 1,142-0.33 Doha 8,435 8,462-0.32 Dubai 1,406 1,328 5.88 Kuwait 5,852 5,799 0.93 Muscat 5,596 5,582 0.25 Saudi Arabia 6,477 6,378 1.55 Source: Thomson Reuters and Zawya 7
Weekly Economic Update Sunday, 29 January 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 (%) 25-Jan-11 ($m) ($m) ($m) Bahrain 63,857 63,857 0.00 80,292-20.47 Kuwait 176,661 176,761-0.06 151,956 16.26 Oman 117,167 116,919 0.21 99,819 17.38 Qatar 218,575 217,788 0.36 232,382-5.94 Saudi Arabia 747,673 748,030-0.05 692,986 7.89 UAE 581,433 578,882 0.44 640,819-9.27 GCC 1,905,366 1,902,237 0.16 1,898,254 0.37 Iran 311,680 309,310 0.77 308,943 0.89 Iraq 366,359 363,109 0.90 257,872 42.07 Gulf Total 2,583,405 2,574,656 0.34 2,465,069 4.80 Source: MEED 8
Weekly Economic Update Sunday, 29 January 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. 9