Business Forum: Finance and Investment - Al-Khateeb

Opportunities for Finance and Investment Presented to US-Saudi Business Opportunities Forum December 06, 2011 Ahmed al-Khateeb Managing Director & CEO1

Oil prices 150 140 130 120 110 100 ($ per barrel) 90 80 70 60 50 40 30 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Brent crude WTI2

(thousand barrels per day) 10,000 7,500 8,000 8,500 9,000 9,500Jan-08May-08Sep-08Jan-09 Saudi Arabia: oil productionMay-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11

Saudi Arabia: Real GDP growth by sector 16 12 8 (percent) 4 0 -4 -8 2004 2005 2006 2007 2008 2009 2010 2011f 2012f Real non-oil growth Real oil growth Real GDP growth4

Saudi Arabia: Real GDP growth by sector (percent) 2008 2009 2010 2011 2012 Agriculture 0.7 -0.5 1.1 1.0 1.0 Manufacturing 6.0 1.5 4.2 5.5 4.5 Electricity, gas and water 6.7 6.8 6.0 7.0 7.0 Construction 1.5 0.6 3.7 6.0 8.0 Wholesale & retail trade 6.5 2.5 4.4 8.5 4.6 Transport & communication 12.2 6.9 5.6 5.0 4.5 Finance 2.4 3.0 1.4 2.1 3.0 Non-oil private sector 4.6 2.7 3.7 4.2 4.9 Oil 4.3 -8.5 2.1 14.4 -2.9 Government services 2.4 5.0 6.1 5.0 4.6 Total 4.2 0.2 3.8 7.1 2.75

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.6

Saudi Arabia: Government finances 350 300 250 200 ($ billion) 150 100 50 0 -50 2004 2005 2006 2007 2008 2009 2010 2011f 2012f Revenue Expenditure Budget balance7

Saudi Arabia: SAMA net foreign assets 550 500 450 ($ billion) 400 350 300 250 Jan May Sep Jan May Sep Jan May Sep Jan May Sep 2008 2009 2010 20118

Saudi Arabia: Indicators of consumer spending 2.6 19 2.4 17 2.2 2.0 15 ($ billion) ($ billion) 1.8 13 1.6 1.4 11 1.2 9 1.0 0.8 7 Jan May Sep Jan May Sep Jan May Sep Jan May Sep 2008 2009 2010 2011 Cash withdrawals f rom ATMs Point of sale transactions - RHS9

Saudi Arabia: Inflation 20 16 12 (percent) 8 4 0 -4 Jan 2008 Jul Jan 2009 Jul Jan 2010 Jul Jan 2011 Jul Food prices Rent Overall inflation10

Saudi Arabia: Inflows of foreign direct investment 40 35 30 25 ($ billion) 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: UNCTAD11

MENA: Inflows of foreign direct investment (2010) 30 25 20 ($ billion) 15 10 5 0 UAE Lebanon Qatar Egypt Saudi Arabia Others Source: UNCTAD12

Saudi Arabia: TASI 7000 6800 6600 6400 6200 6000 5800 5600 5400 5200 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-1113

Saudi Arabia: TASI 12000 11000 10000 9000 8000 7000 6000 5000 4000 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-1114

Saudi Arabia: TASI P/E 25 20 15 10 5 0 Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep 2007 2008 2009 2010 201115

Saudi Arabia: Bank lending to the private sector 4 40 3 30 2 20 (percent) (percent) 1 10 0 0 -1 -10 -2 -20 Jan May Sep Jan May Sep Jan May Sep Jan May Sep 2008 2009 2010 2011 Month-on-month Year-on-year - RHS16

Saudi Arabia: Commercial bank loan-to-deposit ratio 92 90 88 86 84 82 (percent) 80 78 76 74 72 70 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 2008 2009 2010 201117

Saudi Arabia: Commercial bank deposits with SAMA 45 40 35 30($ billion) 25 20 15 10 5 0 Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 2007 2008 2009 2010 2011 Statutory deposits Other deposits with SAMA

Saudi Arabia: Bank profits (year-on-year change) 100 80 60 40 (percent) 20 0 -20 -40 -60 Q1 2008 Q3 Q1 2009 Q3 Q1 2010 Q3 Q1 2011 Q319

Saudi Arabia: Key data and forecasts 2004 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 -2.8 Non-oil private sector 5.3 5.8 6.1 5.5 4.6 2.7 3.7 4.2 4.9 Non-oil government 3.1 4.0 3.1 3.0 3.7 5.2 5.9 5.0 5.0 Total 5.3 5.6 3.2 2.0 4.2 0.2 3.8 7.1 2.7 Oil indicators (average) WTI ($/b) 41.5 56.6 66.0 72.3 99.7 62.0 79.5 94.0 86.0 Saudi ($/b) 34.7 49.5 60.5 68.1 93.4 60.5 77.7 105.0 92.0 Production (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 824 Government expenditure 285 346 393 466 520 596 645 809 753 Budget 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 3.6 Domestic 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 4.4 SAMA 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 110.4 161.6 188.2 205.3 281.0 163.1 214.9 305.2 232.8 Total export revenues 125.7 180.4 210.9 233.1 313.4 192.2 251.0 346.8 277.2 Imports 41.1 53.8 63.0 81.5 100.6 86.4 96.7 102.5 114.7 Trade balance 84.6 126.6 147.8 151.6 212.7 105.8 154.3 244.3 162.5 Current 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 15.5 Official foreign assets 127.9 195.5 273.4 359.8 502.0 474.2 520.3 637.2 697.3 Social and demographic indicators Population (million) 22.7 23.4 24.1 24.8 25.5 26.3 27.1 27.9 28.8 Unemployment (male, 15+, %) 11.0 11.5 12.0 11.0 9.8 10.5 10.2 11.0 10.5 GDP per capita ($) 11039 13503 14806 15523 18651 14158 16017 19849 1830820

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Business Forum: Finance and Investment - Al-Khateeb

by Patrick Ryan on Dec 23, 2011

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