MANAMA: Economic data for July was strong with the non-oil PMI expanding at the fastest rate since September 2012. Consumer spending also remained robust. Cement production and sales declined on the back of seasonal trends, but also due to changes in labor market, according to a report issued by Jadwa Investments.
“Bank lending to the private sector slowed slightly in July, which seems to be related to seasonal factors during the summer rather than a change in risk appetite. There were also unusually sharp movements in the maturity profile of outstanding debt.
“Total bank deposits hit a new all-time high above SR1.5 trillion for the first time in July. The prospect of higher interest rates in the US has pushed the annual growth of time and saving deposits to a six-year high.
“Year-on-year inflation inched down in July, continuing the flat trend in the previous three months, although this trend hides some sharp movements.
“Non-oil exports rebounded in July owing to greater production of petrochemicals and plastics. In contrast, imports fell for the second consecutive month in June.
“Brent fell 3.6 percent to $101 per barrel. WTI dropped marginally to $97.9 per barrel. A rise in the trade weighted dollar is negatively affecting oil demand.
“In July, Saudi crude production rose above 10 mbpd for the first time since September last year as seasonal domestic demand picked up.
“Disappointing economic results from Germany and France resulted in the euro dropping in August.
“The TASI increased by 8.8 percent, month-on-months, in August as the prospect of opening the stock continued to buoy investors’ confidence.
“Average daily turnover jumped by 45.6 percent in August, the largest rise in more than two years.
“In August, the TASI’s price-to-earnings (PE) valuations increased to 21.3, moving further away from the two year average of 16.5.
“In August, banks performed much better than other sectors, building and construction was boosted by developments in major national projects, but seasonality negatively affected hotels.”