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Saudi economic growth remained strong in H1 – Jadwa

Saudi economic growth remained strong in H1 – Jadwa
In a recent report, Jadwa Investment said the economic data for August was strong. Indicators of consumer spending and PMI picked up with the growth of the former reaching a two year high. Latest GDP data shows that year-on-year economic growth remained strong in the first half of the year.
Money supply growth touched a thirteen month high in August, prompting the monetary Authority to step up the issuance of SAMA bills in order to absorb some of the liquidity in the banking sector and reduce the potential impact on inflation, the report issuer added.
The bank lending to the private sector recorded another solid gain in August.
SAMA reserved assets increased by $4.4 billion in August, their highest monthly gain since March this year, Jadwa noted.
The Year-on-year inflation edged upwards in August for the first time in four months, reversing the flat trend seen since May. The shift was mainly helped by an acceleration of both domestic food price and rental inflation.
Non-oil exports maintained robust year-on-year growth in July, but declined slightly in absolute terms. In contrast, imports continued to fall for the third consecutive month, in both absolute and year-on-year terms, according to the report.
Accelerating US production, weaker than expected global demand, stabilization in geopolitics, and an appreciation of the dollar led to oil prices dropping.
Ample global supply resulted in Saudi production dropping to 9.6 mbpd in August.
The dollar strengthened against the euro and the Japanese yen in September.
A combination of profit-taking before the Eid holidays and investors cutting positions to free up cash before IPO/rights issues, saw the TASI fall in September for the first time in two months, Jadwa said.
In September, the TASI’s price-to-earnings (PE) valuation decreased to 20.68, moving closer towards the two year average of 16.58. All but three of the fifteen sectors saw negative performances in September as investor selling was felt across most of the market, Jadwa said.