1. Healthcare

February 2015
Saudi Chartbook
Summary
Real Economy: December data showed healthy growth in consumer
spending. Consumption growth in 2015 is likely to be strong following
the recent Royal decrees.
Income Distribution In 2014, real income per capita grew by 1
percent year-on-year. Income inequality declined between 2007 and
2013 as measured by the GINI index.
Saudi Labor Market: The overall Saudi unemployment rate was
unchanged at 11.7 in 2014. Annual growth in Saudi employment
stood at 4.4 percent, mostly associated with employment growth by
private rather than public entities.
Bank lending: Bank lending to the private sector recorded its second
consecutive monthly decline in December.
Inflation: Data for December shows that CPI slowed for the fourth
consecutive month.
Trade: Both non-oil exports and imports rebounded in November
following a fall in the previous month.
Oil –Global: Oil prices dropped in January, month-on-month, as
global oil balances remained in surplus.
Oil –Regional: Saudi production remained unchanged, month-onmonth, in December. The policy of cutting prices to maintain/expand
market share resulted in Saudi exports increasing in November.
Exchange rates: In January, further quantitative easing (QE) by the
European Central Bank (ECB) contributed to the euro approaching
an 11 year low against US dollar.
For comments and queries please contact:
Fahad M. Alturki
Chief Economist and Head of Research
[email protected]
Stock market: The TASI rose nearly 7 percent in January, month-onmonth. The recent Royal decrees, which reinforced the view that the
government will not cut expenditure due to lower oil prices, will add
renewed confidence to investors going forward.
Asad Khan
Senior Economist
[email protected]
Volumes: Average daily turnover declined 8 percent in January,
month-on-month.
Rakan Alsheikh
Research Analyst
[email protected]
Valuations: TASI’s price-to-earnings (PE) trended upwards moving
just beyond the two year average in January.
Head office:
Phone +966 11 279-1111
Fax +966 11 279-1571
P.O. Box 60677, Riyadh 11555
Kingdom of Saudi Arabia
www.jadwa.com
1
Sectoral performance: A general uplift in investor sentiment saw all
sectors, except for telecoms, performing positively in January.
Full year 2014 results: Net income of listed companies totaled
SR114.7 billion in 2014, up by 9 percent, year-on-year.
February 2015
Real Economy
December data showed healthy growth in both cash withdrawals
from ATMs and point of sale transaction. Consumption growth in
2015 is likely to be strong following the recent Royal decrees.
Cement sales reached an all time high in December, while sales for
2014 grew by 0.8 percent year-on-year.
Indicators of consumer spending
(year-on-year change)
65
55
45
(Percent)
Cash withdrawals from
ATMs reached SR 64.6
billion in December,
growing by 14.7 year-onyear, while point of sale
transactions stood at SR
15.7 billion.
35
25
15
5
-5
-15
Dec-10
Dec-11
Dec-12
Cash withdrawals from ATMs
Dec-13
Dec-14
Point of sale transactions
HSBC/Markit Purchasing Managers Index (PMI)
PMI increased to 57.9 in
December following a
slowdown in the previous
two months, pointing to a
sustained growth and a
continued expansion in the
non-oil economy.
65
60
55
Increasing rate of growth
50
Increasing rate of contraction
45
Dec-09
Oct-10
Aug-11
Jun-12
Apr-13
Feb-14
Dec-14
Cement Sales
5.5
5.0
(mn tons)
During December, cement
sales reached an all time
high of 5.5 million tons.
Year-on-year growth of total
cement sold stood at 0.8
percent in 2014.
4.5
4.0
3.5
3.0
2.5
2.0
2010
2011
2012
2013
2014
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2
February 2015
Income Distribution
In 2014, real income per capita grew by 1 percent. For the first time,
the Central Department of Statistics & Information (CDSI) published
the GINI index for income inequality, showing a decline in inequality
between 2007 and 2013. The kingdom is the first GCC country to
publish its GINI index.
Real income per capita
(year-on-year change)
Real income per capita
10
Real non-oil income per capita
8
6
(percent)
After remaining flat in 2013,
real income per capita grew
by 1 percent, year-on-year
to reach $21,101 in 2014. In
contrast, real non-oil
income per capita growth
slowed to 2.4 percent in
2014, compared to a growth
of 3.6 percent in the
previous year.
4
2
0
-2
-4
2004
2006
2008
2010
2012
2014
Income inequality in Saudi Arabia
(GINI index: 0 = Perfect Equality to 100 = Perfect Inequality)
For the first time, CDSI
published the GINI index for
Saudi Arabia, showing a
score of 46 in 2013,
improving from 51 in
2007…
60
51.3
50
45.9
40
30
20
10
0
2007
2013
2012
2012
2011
2010
UK
2010
2011
China
2011
2010
Spain
USA
2008
Italy
2009
2003
Australia
Turkey
2012
Russia
2012
2008
Japan
India
2005
France
Canada
2011
S. Korea
40
2010
50
2011
60
2013
70
Germany
...placing the Kingdom at
the far-end of inequality
compared to most other G20 economies, but in line
with other emerging
markets.
2011
Income inequality in G-20 countries
(Latest, GINI index: 0 = Perfect Equality to 100 = Perfect Inequality)
30
20
10
3
Note: Year refers to latest officially published GINI for each country
South Africa
Brazil
Mexico
Argentina
Saudi Arabia
Indonesia
G20 Average
0
February 2015
Saudi Labor Market
CDSI released its labor force survey for 2014, showing that overall
unemployment rate was unchanged at 11.7 percent. However, the
data showed that more females entered the labor force across all
age groups. Annual growth in employment of Saudis stood at 4.4
percent, with most of the growth stemming from the private sector.
Saudi unemployment rate
Male
40
Female
35.7
33.4
35
Total
33.2
32.8
30
(percent)
The overall Saudi
unemployment rate was
unchanged at 11.7 percent
in 2014, with slight declines
to both male and female
unemployment...
25
20
12.4
15
10
7.4
12.1
6.1
11.7
6.1
11.7
5.9
5
0
2011
2012
2013
2014
Change in Saudi participation rates by age group
(year-on-year)
5
4
(percentage point)
… while more working-age
Saudi females entered the
labor force across all age
groups (as shown by their
improved participation
rates).
Male
Female
Total
3
2
1
0
-1
-2
Note: Participation rates are defined as the share of working age population in the labor force.
Growth in employment and Saudization rates by sector
50
30
Non-Saudi
Saudi
Saudization Ratio 2013 (RHS)
Saudization Ratio 2014 (RHS)
80
10
60
-10
40
-30
-50
-70
4
100
Note: * refers to public administration, defense, and compulsory social security
20
0
(percent)
In 2014, Saudi employment
growth stood at 4.4 percent,
year-on-year, which was
mostly associated with
private rather than public
entities. This has also
resulted in an improvement
to their Saudization rates.
(percent, year-on-year)
70
February 2015
Bank lending
Bank lending to the private sector recorded its second consecutive
monthly decline in December, but sustained double digit annual
growth. Credit to commerce and manufacturing was the highest during
2014. The loan-to-deposit ratio fell further to 79.4, dragged down by
lower lending activity while growth in deposits was sustained.
Credit to the private sector
3.0
15
2.0
1.5
13
1.0
0.5
11
0.0
9
(Percent)
(percent)
Month-on-month bank
lending to the private sector
fell for the second
consecutive month, but
sustained positive, double
digit annual growth.
17
2.5
-0.5
7
-1.0
-1.5
5
-2.0
-2.5
Dec-10
Dec-11
Month-on-month change
Dec-12
3
Dec-13
Dec-14
Year-on-year change - RHS
Bank credit by economic sector
(New credit issued during 2014)
24
2014
2013
20
16
(SR billion)
Within the private sector,
commerce and
manufacturing have been
the main recipients of new
lending during 2014.
12
8
4
0
Services
Agriculture
& fishing
Mining
Finance
Electricity &
water
Construction
Transport &
Communication
Manufacturing
Commerce
-4
Loan to deposit ratio
85
83
81
(percent)
The continued monthly fall
in lending coupled with
sustained growth in
deposits has caused the
loan-to-deposit ratio to
further decline to 79.4.
79
77
75
73
Dec-09
5
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
February 2015
Inflation
Data for December shows that CPI slowed for the fourth consecutive
month. Both foodstuffs and housing components continued to slow,
year-on-year, for the third consecutive month to reach 2.6 percent,
and 2.5 percent respectively. Foodstuffs slowed as international food
prices continued to decline at a faster rate.
Inflation
Other goods & services contribution (ppt)
Housing and utilities contribution in (ppt)
Food & beverages contribution (ppt)
General Index, % y/y
Core Index (excl. food and housing/rent, % y/y)
5
Data for December shows
that CPI slowed for the
fourth consecutive month to
2.4 percent, year-on-year.
4
3
2
1
0
Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
Food, housing, and headline inflation
(year-on-year change)
Headline inflation
Housing and utilities
Food & beverages
7
6
5
(percent)
Both foodstuffs and housing
components continued to
slow, year-on-year, for the
third consecutive month to
reach 2.6 percent, and 2.5
percent respectively.
4
3
2
1
Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
Food price inflation
(year-on-year change)
Saudi food CPI inflation
Global food price inflation (FAO index)
Global food price inflation (IMF index)
12
8
(percent)
Foodstuffs slowed as
international food prices
continued to decline at a
faster rate.
4
0
-4
-8
-12
Dec-12
6
Apr-13
Aug-13
Dec-13
Apr-14
Aug-14
Dec-14
February 2015
Trade
Latest data shows that non-oil exports rebounded in November
following a fall in the previous month. Imports grew by 4.6 percent
year-on-year in November. Import activity is likely to be strong in
2015 following the recent Royal decrees. New LOCs also suggest a
continued increase in import activity in upcoming months.
Non-oil exports
30
5
20
10
3
0
2
-10
1
0
May-12
(percent)
6
4
($ billion)
Non-oil exports rebounded
in November following a fall
in the previous month,
increasing by 9.5 percent,
month-on-month, but
stayed unchanged in yearon-year terms at -0.3
percent...
-20
Oct-12
Mar-13
Aug-13
Non-oil exports
Jan-14
Jun-14
Nov-14
% change, y/y (RHS)
Imports
16
30
14
20
($ billion)
12
10
10
8
0
6
4
-10
2
0
May-12
(percent)
...while imports grew by
11.2 percent, month-onmonth and 4.6 percent year
-on-year.
-20
Oct-12
Mar-13
Imports
Aug-13
Jan-14
Jun-14
Nov-14
% change, y/y (RHS)
17
6.0
16
5.5
15
5.0
14
4.5
13
4.0
12
3.5
11
3.0
Jun-12
Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
Imports
Letters of credit opened for private sector imports, RHS
7
($ billion)
New LOCs opened suggest
a continued increase in
import activity in upcoming
months.
($ billion)
Letters of credit opened by the private sector and imports
February 2015
Oil - Global
Oil prices dropped in January, month-on-month, as global oil
balances remained in surplus. As future oil prices moved into
contago, stocks of both crude and gasoline rose for the second
consecutive month. Meanwhile, lower oil prices resulted in US land
rigs being down for the third consecutive month in January.
Oil Prices
120
Oil prices dropped again in
January due to no slow
down in supply and demand
remaining subdued.
($ per barrel)
100
80
60
40
Jan-13
Brent
WTI
Jul-13
OPEC basket
Jan-14
Jul-14
Jan-15
Change in US Commercial Crude and Gasoline Stock
(average month-on-month change)
6
Crude Oil
Gasoline
The combination of ample
supply and the oil price
forward curve moving into
contango resulted in steep
increases in commercial
stocks.
(million barrels)
4
2
0
-2
-4
-6
-8
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
U.S Land Oil Rig Count
(total at month end)
1,900
1,850
US land oil rigs dropped by
202, month-on-month, in
January, the largest
monthly drop in six years.
(Land rigs)
1,800
1,750
1,700
1,650
1,600
1,550
1,500
Jan-13
8
Jul-13
Jan-14
Jul-14
Jan-15
February 2015
Oil - Regional
Saudi production remained unchanged, month-on-month, in
December. OPEC production held above 30 mbpd regardless of a
sharp drop in Libyan supply, as this fall was compensated by a rise
in Iraqi production. The policy of cutting prices to maintain/expand
market share resulted in Saudi exports increasing in November.
Saudi crude production
Saudi production averaged
9.6 mbpd in December.
(million barrels per day)
10.4
10.2
10.0
9.8
9.6
9.4
9.2
9.0
8.8
Dec-12
Dec-13
Dec-14
4.0
3.8
3.6
3.4
3.2
3.0
2.8
2.6
2.4
2.2
2.0
Dec-12
Jun-13
Iran
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
Jun-14
Dec-14
Libya (RHS)
Dec-13
Iraq
(million barrels per day)
A decline in Libyan
production was more than
compensated by rises in
Iraqi production in
December.
(million barrels per day)
Iraq, Iran and Libya production
Saudi crude exports by country
Latest data shows that
Saudi exports in November
increased, month-onmonth, to back above 7
mbpd, which was last
achieved in April 2014.
(million barrels per day)
(monthly average)
9
Singapore
7
6
Taiwan
5
India
4
S.Korea
3
Japan
2
China
1
0
Nov-12
9
Other
8
US
May-13
Nov-13
May-14
Nov-14
February 2015
Exchange Rates
In January, a combination of the further quantitative easing (QE) by
the European Central Bank (ECB) and question marks over
Greece’s membership to the European Union led to the euro
approaching an 11 year low against US dollar. Speculative activity
resulted in the one year forward US dollar/riyal rate rising sharply.
Euro/US Dollar
1.40
1.35
The euro lost value as the
ECB announced a record
QE program, whilst
elections in Greece brought
in an anti-austerity
government…
1.30
1.25
1.20
1.15
1.10
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
US Dollar/Swiss France
1.30
1.20
...further pressure was piled
on the euro as the Swiss
National Bank (SNB)
decided to end the policy of
keeping a minimum
exchange rate for the Swiss
franc against the euro.
1.10
1.00
0.90
0.80
0.70
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
US Dollar/Riyal One Year Forward Rate
3.770
3.765
A generally lower oil price
environment resulted in
speculation against the
Saudi riyal rising sharply.
3.760
3.755
3.750
3.745
3.740
Jan-13
10
Jul-13
Jan-14
Jul-14
Jan-15
February 2015
Stock Market
The TASI rose nearly 7 percent in January, month-on-month. The
recent Royal decrees, which reinforced the view that the government
will not cut expenditure due to lower oil prices, will add renewed
confidence to investors going forward. Retail sectors in particular will
see better performance in the next few months.
TASI
The TASI rose by nearly 7
percent, month-on-month,
in January…
11,200
10,600
10,000
9,400
8,800
8,200
7,600
7,000
6,400
5,800
5,200
4,600
4,000
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Sep-14
Jan-15
TASI monthly performance
(January 2015)
(percent)
...after four consecutive
months of falls…
9
7
5
3
1
-1
-3
-5
-7
-9
-11
-13
-15
Jan-13
May-13
Sep-13
Jan-14
May-14
Comparative stock market performance
(monthly performance, January 2015)
25
(percent)
20
11
10
5
0
-5
Dubai
Egypt
Brazil
Abu Dhabi
MSCI EM
Turkey
Kuwait
Oman
Qatar
Germany
UK
Bahrain
US
Japan
TASI
-10
China
...resulting in the TASI
outperforming most
comparative benchmarks,
aside from China.
15
February 2015
Volumes
Average daily turnover declined 8 percent in January, month-onmonth. Banks and insurance sectors dominated daily turnover but
turnover was more prominent amongst the smaller sectors, when
considering market capitalization, largely due to speculative activity.
Daily average stock market turnover
16
Average daily turnover
declined 8 percent in
January, month-on-month.
(SR billion)
14
12
10
8
6
4
2
0
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Turnover by sector
(daily average)
Banks, insurance and
petchems., again, dominated turnover…
(SR billion)
1.5
1.0
0.5
Hotels
Energy
Transport
Media
Turnover as percent of market cap
(January, 2015)
80
60
20
Bldg. & cons.
Insurance
Ind. invest
Energy
Multi. invest
Retail
Cement
Real estate
Agri. & food
Telecoms
Petchems
0
Banks
...but speculation amongst
smaller stocks was
apparent when considering
the higher turnover to
market capitalization.
(percent)
40
Turnover to market cap by sector
Market cap by sector as percent of total
12
Media
Cement
Hotels
Transport
Multi. invest
Retail
Agri. & food
Telecoms
Bldg. & cons.
Real estate
Ind. invest
Petchems
Insurance
Banks
0.0
February 2015
Valuations
The TASI’s price-to-earnings (PE) picked up in January, month-onmonth. PE trended upwards moving just beyond the two year
average with TASI’s PE in line with comparative stock markets.
TASI’s dividend yields remain moderate when compared globally,
but on the lower end when compared regionally.
TASI Price-to-Earnings ratio
Price/Earnings
Two year average
22
PE rose in January, monthon-month, to just above the
two year average…
18
14
10
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Comparative Price-to-Earnings ratios
(end of month)
25
20
...which is in line with major
regional and global indices.
15
10
5
0
TASI Dividend Yield ratios
(end of month)
6.0
5.0
4.0
Dividend yields are
moderate, but on the lower
end when compared
against regional
benchmarks.
13
3.0
2.0
1.0
0.0
Jan-15
February 2015
Sectoral Performance
A general uplift in investor sentiment saw all sectors, except for
telecoms, performing positively in January with smaller sectors
gaining the most. Amongst the worst performers, energy and retail
gains were modest whilst telecoms recorded negative performance.
Performance by sector
(rebased; 31 December = 100)
18
All sectors, except
telecoms, were up in
January…
(percent)
14
10
6
2
-2
Telecoms
Retail
Energy
Media & pub.
Petchems
Agri. & food
Cement
Banks
Multi inv.
Transport
Bldg. & cons.
Real estate
Insurance
Industrial inv.
Hotels
-6
Best Performing Sectors
(rebased; 31 December = 100)
120
115
...smaller sectors benefited
most from renewed investor
confidence…
110
Hotels
Industrial inv.
Insurance
105
100
95
31-Dec 4-Jan
8-Jan 12-Jan 16-Jan 20-Jan 24-Jan 28-Jan
Worst Performing Sectors
(rebased; 31 December = 100)
115
110
...telecoms, energy and
retail were affected by
below par results in Q4
2014.
Telecoms
Retail
Energy
105
100
95
90
31-Dec 4-Jan
14
8-Jan 12-Jan 16-Jan 20-Jan 24-Jan 28-Jan
February 2014
Full year 2014 results
Net income of listed companies totaled SR114.7 billion in 2014, up by
9 percent, year-on-year. Banks were the stand out performers with
the largest increase in net income, year-on-year, up SR10 billion,
whilst telecoms losses amounted to nearly SR5 billion, year-on-year.
Net income of listed companies
120
110
(SR billion)
Net income was up 9.2
percent year-on-year, but
quarter-on-quarter was
down 38 percent, due to
losses in the petchems.,
telecom and energy
sectors.
100
90
80
70
60
50
40
2006
2008
2010
2012
2014
Net Income by sector
(year-on-year change)
Telecoms
Bldg. & cons.
Petchems
Transport
Ind. Invest.
Media
Hotels
Multi invest.
Retail
Cement
Agri. & food
Energy
R-estate
Insurance
Banks
(SR billion)
Of the larger sectors
petchems. and telecoms
profit fared the worst in
2014, year-on-year…
12
10
8
6
4
2
0
-2
-4
-6
Net income by sector
(2014 vs. 2013)
Banks
10%
...resulting in their
contribution to profits
amongst all listed
companies declining.
3%
3% 2% 8%
4% 4%
30% 36%
3%
5% 6% Outer circle: 2014
Inner circle: 2013
9% 14%
Petrochems.
Telecom.
Cement
Agri. & food
Energy
Real estate
33%
30%
15
Other
February 2015
Key Data
2008
2009
2010
2011
2012
2013 2014 E 2015 F 2016 F
Nominal GDP
(SR billion)
1,949 1,609 1,976 2,511 2,752 2,791 2,822
2,759
2,875
($ billion)
(% change)
519.8 429.1 526.8 669.5 734.0 744.3 752.5
25.0 -17.4 22.8 27.1
9.6
1.4
1.1
735.8
-2.2
766.7
4.2
Real GDP (% change)
Oil
4.3
-8.0
-0.1
12.2
5.1
-1.6
1.7
-0.6
-1.6
Non-oil private sector
Government
Total
11.1
6.2
8.4
4.9
6.3
1.8
9.7
7.4
4.8
8.0
8.4
10.0
5.5
5.3
5.4
7.0
5.1
2.7
5.7
3.7
3.6
5.3
3.5
2.5
4.7
3.3
1.8
Oil indicators (average)
Brent ($/b)
97.2
61.7
79.8
112.2 112.4 109.6
99.5
79.0
83.0
Saudi ($/b)
Production (million b/d)
94.0
9.2
60.4
8.2
77.5
8.2
103.9 106.1 104.2
9.3
9.8
9.6
95.5
9.7
75.0
9.6
79.0
9.4
Budgetary indicators (SR billion)
Government revenue
Government expenditure
Budget balance
1,101
520
581
510
596
-87
742
654
88
1,118 1,247 1,156 1,046
827
873
976 1,100
291
374
180
-54
836
1,003
-167
737
968
-231
(% GDP)
Domestic debt
(% GDP)
29.8
235
12.1
-5.4
225
14.0
4.4
167
8.5
11.6
135
5.4
13.6
99
3.6
6.5
60
2.2
-1.9
44
1.6
-6.1
40
1.4
-8.0
38
1.3
6.1
4.1
3.8
3.7
2.9
3.5
2.7
2.6
2.9
2.5
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.25
External trade indicators ($ billion)
Oil export revenues
284.1 166.9 215.2 317.6 337.5 323.1 270.3
214.1
191.4
Total export revenues
Imports
313.5 192.3 251.1 364.7 388.4 377.0 325.8
100.6 86.4 97.4 120.0 141.8 152.7 150.4
272.1
154.7
254.8
158.6
Trade balance
212.8 105.9 153.7 244.7 246.6 224.3 175.4
117.4
96.1
Current account balance
132.3
158.5 164.8 134.3 125.1
27.1
2.5
(% GDP)
Official reserve assets
25.5
4.9
12.7 23.7 22.4 18.0 16.6
442.7 410.1 445.1 544.0 656.6 725.7 765.9
3.7
779.0
0.3
796.1
Social and demographic
indicators
Population (million)
Saudi unemployment (15+, %)
25.8
10.0
31.7
11.3
32.5
11.1
Monetary indicators (average)
Inflation (% change)
SAMA base lending rate (%, year
end)
GDP per capita ($)
21.0
26.7
10.5
66.8
27.6
11.2
28.4
12.4
29.2
12.0
30.0
11.7
30.8
11.7
20,157 16,095 19,113 23,594 25,139 24,816 24,454 23,213 23,537
Sources: Jadwa estimates for 2014 and forecasts for 2015-16. Saudi Arabian Monetary Agency for GDP, monetary and external
trade indicators. Ministry of Finance for budgetary indicators. Central Department of Statistics & Information and Jadwa
estimates for oil, social and demographic indicators.
16
February 2015
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shall not be reproduced, in whole or in part, without the specific written permission of
Jadwa Investment.
The data contained in this research is sourced from Reuters, Bloomberg, The World
Bank, Tadawul and national statistical sources unless otherwise stated.
Jadwa Investment makes its best effort to ensure that the content in the Publication is
accurate and up to date at all times. Jadwa Investment makes no warranty,
representation or undertaking whether expressed or implied, nor does it assume any
legal liability, whether direct or indirect, or responsibility for the accuracy,
completeness, or usefulness of any information that contain in the Publication. It is
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or advice for any action(s) that may take place in future.
17