Business Forum: Finance and Investment - Al-Khateeb
20
1 Opportunities for Finance and Investment Presented to US-Saudi Business Opportunities Forum December 06, 2011 Ahmed al-Khateeb Managing Director & CEO
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Presentation at the US-Saudi Business Opportunities Forum (Dec 5-7, 2011, Atlanta, GA). Ahmed Al-Khateeb, Managing Director and CEO, Jadwa Investment, presented at the panel titled, "Opportunities for Finance and Investment".
Transcript of Business Forum: Finance and Investment - Al-Khateeb
1
Opportunities for Finance and Investment
Presented to US-Saudi Business Opportunities Forum
December 06, 2011
Ahmed al-KhateebManaging Director & CEO
2
Oil prices
30
40
50
60
70
80
90
100
110
120
130
140
150
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11
($ p
er b
arre
l)
Brent crude WTI
3
Saudi Arabia: oil production
7,500
8,000
8,500
9,000
9,500
10,000
Jan-
08
May-08
Sep-
08
Jan-
09
May-09
Sep-
09
Jan-
10
May-10
Sep-
10
Jan-
11
May-11
Sep-
11
(th
ou
san
d b
arr
els
per
day)
4
Saudi Arabia: Real GDP growth by sector
-8
-4
0
4
8
12
16
2004 2005 2006 2007 2008 2009 2010 2011f 2012f
(perc
en
t)
Real non-oil growth Real oil growth Real GDP growth
5
Saudi Arabia: Real GDP growth by sector(percent)
2008 2009 2010 2011 2012Agriculture 0.7 -0.5 1.1 1.0 1.0Manufacturing 6.0 1.5 4.2 5.5 4.5Electricity, gas and water 6.7 6.8 6.0 7.0 7.0Construction 1.5 0.6 3.7 6.0 8.0Wholesale & retail trade 6.5 2.5 4.4 8.5 4.6Transport & communication 12.2 6.9 5.6 5.0 4.5Finance 2.4 3.0 1.4 2.1 3.0Non-oil private sector 4.6 2.7 3.7 4.2 4.9Oil 4.3 -8.5 2.1 14.4 -2.9Government services 2.4 5.0 6.1 5.0 4.6Total 4.2 0.2 3.8 7.1 2.7
6
Saudi Arabia: Supplementary government spending packages
Item Allocation
($ billion)
Construction of 500,000 residential units 66.7
New funding for Real Estate Development Fund 10.7
Increase in capital of Saudi Credit Bank 5.3
Additional allocation to Ministry of Health 4.3
Support for General Housing Authority 4.0
Other funded commitments in February 24 package2 2.1
Other funded commitments in March 18 package1 0.5
Total 93.5
Other major items of new spending Jadwa estimate(2011; $ billion)
Additional two month’s salary for government employees 10.7
Fifteen percent pay rise 8.5
Introduction of public sector minimum wage 3.2
Unemployment benefit 0.3 per month
1 Includes allocations to support those on low incomes and broaden social services.2 Includes allocations for construction and renovation of mosques and support for religious institutions.
7
Saudi Arabia: Government finances
-50
0
50
100
150
200
250
300
350
2004 2005 2006 2007 2008 2009 2010 2011f 2012f
($ b
illi
on
)
Revenue Expenditure Budget balance
8
Saudi Arabia: SAMA net foreign assets
250
300
350
400
450
500
550
Jan 2008
May Sep Jan 2009
May Sep Jan 2010
May Sep Jan 2011
May Sep
($ b
illi
on
)
9
Saudi Arabia: Indicators of consumer spending
7
9
11
13
15
17
19
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
Jan 2008
May Sep Jan 2009
May Sep Jan 2010
May Sep Jan 2011
May Sep
($ b
illi
on
)
($ b
illi
on
)
Cash withdrawals f rom ATMs Point of sale transactions - RHS
10
Saudi Arabia: Inflation
-4
0
4
8
12
16
20
Jan 2008 Jul Jan 2009 Jul Jan 2010 Jul Jan 2011 Jul
(perc
en
t)
Food prices Rent Overall inflation
11
Saudi Arabia: Inflows of foreign direct investment
0
5
10
15
20
25
30
35
40
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
($ b
illi
on
)
Source: UNCTAD
12
MENA: Inflows of foreign direct investment(2010)
0
5
10
15
20
25
30
UAE Lebanon Qatar Egypt Saudi Arabia Others
($ b
illi
on
)
Source: UNCTAD
13
Saudi Arabia: TASI
5200
5400
5600
5800
6000
6200
6400
6600
6800
7000
Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11
14
Saudi Arabia: TASI
4000
5000
6000
7000
8000
9000
10000
11000
12000
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11
15
Saudi Arabia: TASI P/E
0
5
10
15
20
25
Jan 2007
May Sep Jan 2008
May Sep Jan 2009
May Sep Jan 2010
May Sep Jan 2011
May Sep
16
Saudi Arabia: Bank lending to the private sector
-20
-10
0
10
20
30
40
-2
-1
0
1
2
3
4
Jan 2008
May Sep Jan 2009
May Sep Jan 2010
May Sep Jan 2011
May Sep
(perc
en
t)
(perc
en
t)
Month-on-month Year-on-year - RHS
17
Saudi Arabia: Commercial bank loan-to-deposit ratio
70
72
74
76
78
80
82
84
86
88
90
92
Jan 2008
Apr Jul Oct Jan 2009
Apr Jul Oct Jan 2010
Apr Jul Oct Jan 2011
Apr Jul Oct
(per
cen
t)
18
Saudi Arabia: Commercial bank deposits with SAMA
0
5
10
15
20
25
30
35
40
45
Jan 2007
Jul Jan 2008
Jul Jan 2009
Jul Jan 2010
Jul Jan 2011
Jul
($ b
illi
on
)
Statutory deposits Other deposits with SAMA
19
Saudi Arabia: Bank profits(year-on-year change)
-60
-40
-20
0
20
40
60
80
100
Q1 2008 Q3 Q1 2009 Q3 Q1 2010 Q3 Q1 2011 Q3
(perc
en
t)
20
Saudi Arabia: Key data and forecasts2004 2005 2006 2007 2008 2009 2010 2011F 2012F
Nominal GDP(SR billion) 938.8 1182.5 1335.6 1442.6 1786.1 1397.5 1630.0 2079.2 1977.3($ billion) 250.3 315.3 356.2 384.7 476.3 372.7 434.7 554.4 527.3(% change) 16.7 26.0 12.9 8.0 23.8 -21.8 16.6 27.6 -4.9
Real GDP (% change)Oil 6.7 6.2 -0.8 -3.6 4.2 -7.6 2.1 14.4 -2.8Non-oil private sector 5.3 5.8 6.1 5.5 4.6 2.7 3.7 4.2 4.9Non-oil government 3.1 4.0 3.1 3.0 3.7 5.2 5.9 5.0 5.0Total 5.3 5.6 3.2 2.0 4.2 0.2 3.8 7.1 2.7
Oil indicators (average)WTI ($/b) 41.5 56.6 66.0 72.3 99.7 62.0 79.5 94.0 86.0Saudi ($/b) 34.7 49.5 60.5 68.1 93.4 60.5 77.7 105.0 92.0Production (million b/d) 8.9 9.4 9.2 8.8 9.2 8.2 8.2 9.2 8.8
Budgetary indicators (SR billion)Government revenue 392 564 674 643 1101 510 742 1097 824Government expenditure 285 346 393 466 520 596 645 809 753Budget balance 107 218 280 177 581 -87 97 288 71(% GDP) 11.4 18.4 21.0 12.2 32.5 -6.2 5.9 13.9 3.6Domestic debt 614 475 366 267 237 225 167 160 160(% GDP) 65.4 40.2 27.4 18.5 13.3 16.1 10.2 7.7 8.1
Monetary indicators (average)Inflation (% change) 0.3 0.7 2.3 4.1 9.9 5.1 5.3 4.9 4.4SAMA base lending rate (%, end year) 2.50 4.75 5.20 5.50 2.50 2.00 2.00 2.00 2.00
External trade indicators ($ billion)Oil export revenues 110.4 161.6 188.2 205.3 281.0 163.1 214.9 305.2 232.8Total export revenues 125.7 180.4 210.9 233.1 313.4 192.2 251.0 346.8 277.2Imports 41.1 53.8 63.0 81.5 100.6 86.4 96.7 102.5 114.7Trade balance 84.6 126.6 147.8 151.6 212.7 105.8 154.3 244.3 162.5Current account balance 51.9 90.0 98.9 93.3 132.3 21.0 67.0 162.9 81.6(% GDP) 20.7 28.5 27.8 24.3 27.8 5.6 15.4 29.4 15.5Official foreign assets 127.9 195.5 273.4 359.8 502.0 474.2 520.3 637.2 697.3
Social and demographic indicatorsPopulation (million) 22.7 23.4 24.1 24.8 25.5 26.3 27.1 27.9 28.8Unemployment (male, 15+, %) 11.0 11.5 12.0 11.0 9.8 10.5 10.2 11.0 10.5GDP per capita ($) 11039 13503 14806 15523 18651 14158 16017 19849 18308
