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Oil Exports in MENA Region Report Increases for 2012 While Saudi Arabian Assets Reach SR 88bn and Reserves Rise to USD 40bn in Qatar

Middle East : 15 February 2013

Oil Exporting Nations in the MENA Region Report Increased Growth Last Year

Economic growth in hydrocarbon-producing countries around the MENA region is reported at 5.5 percent for 2012. Expectations report a drop in that growth this year, affected by declining output in exporters such as the UAE.

Rising oil output resulted in growth for the majority of MENA oil producers. Sanctions affected Iran’s economy for the worse, according to a recent study by the IIF. After disruptions in Libya’s economy throughout 2011, that oil producer rebounded.

Growth is expected to slow down to 3.9 percent this year, as production restraints hit the UAE, Kuwait and Saudi Arabia.

As private credit rebounds and hydrocarbon revenues continue to surge, the expansionary policies in place across the region should stay in place.
Steady oil prices should help maintain external current account levels, with large surpluses in the GCC nations, Iraq and Iran, Libya and Algeria. The report forecasted that current account levels will fall from 2012 figures of 7.5% of GDP to 5.2% of GDP this year, assuming oil prices average $110 throughout the year.

Aggregated current account surpluses are also expected to decline from 2012 levels of $412bn to $384bn this year, according to the report. The UAE and Saudi Arabia’s combined surplus, expected to reach $338bn this year, will continue to surpass levels recorded in China.
The report stated that projections for large surpluses and diversification within investment will drive an increase in gross foreign assets, which should reach $3 trillion by the end of this year.

High levels of government spending will be supported by massive net foreign assets and higher oil prices, according to the IIF.

Assets in Saudi Arabia Investment Funds Reach SR 88 Billion

Total assets in Saudi Arabia hit SR 88bn at the close of last year, based on data from SAMA. These figures represent a 7.15 percent growth over the 2011 level of SR 82.2 billion.

Total domestic assets covering 240 investment funds reached SR 69.8bn, making up about 79.3% of the aggregate value and representing just over 8 percent growth. Foreign assets rose by 3.36 percent y-o-y. The count of investment funds included dropped from 249 in 2011 to 240 in 2012.

Subscriber totals declined last year, falling 6.22 percent Y-O-Y or 18,281 subscribers, reaching a total of 275,624 for 2012. SAMA has reported a steady decline in the number of subscribers since 2007, resulting in a 35.31 percent decline (150,461) in subscribers over that time period.

SAMA figures indicated that 95.4 percent of the funds held at the close of last year were open-ended. These funds totalled SR 86bn and came in at about SR 377mn on average throughout 2012.

Capital protection remains high in bond and money market funds, where most of the funds are parked. Foreign and domestic money market funds and bonds come in at about SR 54bn, or 62.3% of overall assets. Assets within domestic money market vehicles rose by 11.82% Y-O-Y with funds in foreign money market vehicles growing to 10.63 percent. Combined bond assets fell about 30% Y-O-Y, dropping to SR 3.89bn from SR 5.6bn.

Assets in foreign and domestic shares made up about 33.55% of the overall domiciled assets for Saudi Arabia, increasing 6.4 percent or 1.78bn Y-O-Y. Reports state that overall assets for foreign and domestic shares reached 29.54bn by the close of 2012, up from the 2011 level of 27.76bn.

International Reserves Bounce Back to USD 40 Billion in Qatar

Positive energy prices and wise fiscal management created a rebound in the international reserves of Qatar, which reached $40 billion in November of last year after falling to $14 billion in November of the previous year, based on a report by QNB.

These healthy levels of savings are mirrored in the current account surplus of $16.6 billion during Q3 of 2012, according to the recent report.
An encouraging sign of activity with the Qatari economy, these figures represent 9.3 percent growth Y-O-Y. The current account surplus indicates that Qatar is a creditor to the balance of economies around the world.

Based on QNB’s figures, the trade balance in Qatar equaled $25.2 billion in Q3 2012, representing an 8.8 percent annual increase. The trade surplus indicates that Qatari exports surpass Qatari imports.

Driven by foreign currency deposits, the broad money supply in Qatar hit QR 388.5 billion in November of last year, an increase of 29.7 percent Y-O-Y.
Asian nations continued to hold as the top destinations for Qatari exports, including China and India, Japan and South Korea. As a combined total, these nations accounted for $21 billion (or QR 76.4 billion) in exports in Q3 2012, consisting of LNG for the most part.

Exports to Japan totalled $8.8 billion or QR 32 billion during the third quarter of 2012, while South Korea accepted $7 billion or QR 25.5 billion in exports and India accounted for $3.3 billion or QR 12 billion. China represented $1.9 billion or QR 6.9 billion in exports.

A majority of imports into Qatar came from the EEC, reaching $1.6 billion or QR 5.8 billion in Q3 2012. Other major import partners included the United States at $0.7 billion or QR 2.5 billion, China at $0.5 billion or QR 1.8 billion, with Japan and the UAE both at $0.4 billion or QR 1.45 billion.
Exports to China have continued to increase, supported by LNG contracts and growing 68 percent year-on-year.
Qatari exports to Japan have risen by 22.6 percent Y-O-Y, according to the QNB report. Increases in exports to South Korea equal 46 percent Y-O-Y and exports to India rose 0.6 percent.

Beyond Asian countries, the Eurozone received the majority of Qatari exports during the third quarter. Exports from Qatar to the EEC equalled $3.3 billion or QR 12 billion during Q3 2012.

Average oil production for December 2012 totalled 726,000 bpd, representing a drop of 1.6 percent Y-O-Y. The OPEC quota limitations are credited for this decline.

Crude prices in Qatar averaged $108.1 in December of 2012, also representing a 1.6 percent drop.

Using IMF data, the QNB report stated that QIA assets equalled $175 billion. Qatar’s policy of investing in global assets with hydrocarbon wealth via the QIA has resulted in benefits in the global financial markets.

Total foreign investments averaged $60 billion annually from 2008 to last year. Assuming that benchmark oil prices remain steady, the same level of investment is expected over the next five years.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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