Saudi Economic Chartbook

Saudi Economic Chartbook Second Quarter 2018

Hans-Peter Huber, PhD Chief Investment Officer Riyad Capital 6775 Takhassusi St. – Olaya Riyadh 12331-3712 [email protected]

Saudi Economic Chartbook Second Quarter 2018

Saudi Economy Rebounding Due to Oil Sector The Saudi economy rebounded in Q1 2018 based on our GDP tracker model (see figure below). This is due to the oil sector which positively contributed to growth. Meanwhile, various indicators of the Non-oil economy point towards a slowdown in the first quarter. Official foreign currency reserves at SAMA continued to stabilize above 1800bln SAR in Q1 2018, a process which had already started in Q4 2017 and which is the result of an improving current account balance and regular foreign funding by the Saudi government. Fiscal non-oil revenues in Q1 2018 jumped by 20bln SAR compared to Q1 2017 due to higher tax income resulting form the recent fiscal reform measures. The fiscal expenditure increase of 30bln SAR can be explained by a higher government payroll and higher social benefits (citizen account). Saudi Arabia continued to produce crude oil below 10mbd in Q1 2018. Exports of crude and refined products, however, picked up in the first quarter by 8% compared to previous year’s average. Meanwhile, oil prices have reached 80USD for Brent quality. Table of Contents: GDP Data ………………….…………. 2 Monetary and Financial Indicators ………………………….… 3 Fiscal Balance and Government Debt…………………. 6 Private Spending and Foreign Trade …............................... 7

3M SAIBOR rates are again above USD LIBOR rates by mid-May. In the course of the first quarter, SAIBOR rates had been temporarily outstripped by LIBOR rates causing SAMA to take adequate measures to counter this negative interest rate spread. TASI continued its rally until end of April when some profit taking by foreign investors kicked in who had poured an unprecedented amount of 11bln SAR into the Saudi market during the months before. Saudi Economy Rebounding in Q1 2018

Non-Oil Business Climate Indicators …………………...……….. 8 Inflation Indicators …………….... 9 Real Estate Market …………..... 10 Oil Market …….………………………12 Foreign Exchange and Interest Rates …….………...……… 13 Our GDP Tracker model indicates a rebound of the Saudi economy in Q1 2018 due to a positive oil sector contribution.

Saudi Balance of Payments ..….15 Saudi Equity Market ………...... 16 Facts and Figures at a Glance …….……………............ 18

Real GDP growth Overall economy, quarterly, %yoy Real GDP growth Tracker Overall economy, monthly, %yoy

source: GASTAT, RC

Page 1

Saudi Economic Chartbook Second Quarter 2018

Gross Domestic Product (GDP) Overall Economy and Institutional Sectors Figure 1: Real GDP Overall Economy and Oil Sector

Figure 2: Nominal and Real GDP Non-Oil Private Sector

Real GDP growth Overall economy, quarterly % yoy

Real GDP growth Non-oil private sector, quarterly % yoy

Real GDP growth Oil-sector, quarterly % yoy

Nominal GDP growth Non-oil private sector, quarterly % yoy

source: GASTAT

Figure 3: Monthly GDP Tracker of Overall Economy

source: GASTAT

Figure 4: GDP Deflator and CPI Inflation

Real GDP growth Overall economy, quarterly, %yoy

GDP deflator Non-oil private sector % yoy

Real GDP growth Tracker Overall economy, monthly, %yoy

CPI inflation % yoy

source: GASTAT, RC

For the first quarter of this year our GDP Tracker model indicates a recovery of the overall economy after negative growth rates throughout 2017. This is primarily due to a positive growth contribution

source: GASTAT

from the oil sector where the impact of the OPEC output cut agreement on oil production is fading in 2018 while the Non-oil economy most probably witnessed a further growth slowdown in Q1 2018. Page 2

Saudi Economic Chartbook Second Quarter 2018

Monetary Aggregates, Credit and Commercial Banks’ Deposits Figure 1: Growth Rate Monetary Base and Aggregate M1

Figure 2: Growth Rate Monetary Aggregates M2 and M3

Monetary base, % yoy

Aggregate M3, % yoy

Aggregate M1, % yoy

Aggregate M2, % yoy

source: SAMA

Figure 3: Growth of Credit to the Private Sector

source: SAMA

Figure 4: Growth of Commercial Banks’ Deposits

Banks’ claims on private sector, % yoy, l.h.sc.

Banks’ overall customer deposits, % yoy, l.h. sc.

Banks’ claims on private sector, % mom, r.h.sc.

Banks’ overall customers deposits, % mom, r.h.sc.

source: SAMA

source: SAMA

The narrow monetary aggregates (monetary base and M1) witnessed low single-digit growth rates on a yearly basis while the broad monetary aggregates M2 and M3 were broadly unchanged, primarily due

to no growth in overall customer deposits. Credit to the private sector still exhibited negative growth on a year-on-year basis by March 2018 but marginally increased in the first three months of the year. Page 3

Saudi Economic Chartbook Second Quarter 2018

Commercial Banks Key Ratios Figure 1: Private Sector Loan-Deposit-Ratio

Figure 2: Government Sector Loan-Deposit-Ratio

Claims on the private sector as % of total bank deposits

Claims on the government as % of total bank deposits

source: SAMA

source: SAMA

Figure 3: Foreign Assets to Total Assets Ratio

Gross foreign assets as % of total assets Net foreign assets as % of total assets source: SAMA

Marginally higher loans to the private sector and most recently a small decline in customer deposits drove the private sector loan-deposit-ratio to 87.9% in March. Meanwhile, the government’s local bond

Figure 4: Excess Liquidity to Total Assets Ratio

Excess liquidity as % of total assets (Excess liquidity = banks’ current and other deposits at SAMA + SAMA bills) source: SAMA

issues during Q1 2018 were entirely absorbed by the banks which increased their sovereign debt holdings by 20bln SAR causing the government sector loan-deposit-ratio to rise close to 20%. Page 4

Saudi Economic Chartbook Second Quarter 2018

SAMA Balance Sheet: Key Elements of Assets and Liabilities Figure 1: Foreign Currency Reserves at SAMA

Total foreign currency reserves at SAMA, in bln SAR, l.h.sc.

Figure 2: Government Deposits at SAMA

Total government deposits at SAMA, in bln SAR, l.h.sc.

Monthly change in foreign currency reserves at SAMA, in

Monthly change in total government deposits at SAMA,

bln SAR, r.h.sc.

in bln SAR, r.h.sc.

source: SAMA

source: SAMA

Figure 3: Foreign Currency Reserves at SAMA - the long Term

Figure 4: Government Deposits at SAMA – the long Term

Total foreign currency reserves at SAMA, in bln SAR

Total government deposits at SAMA, in bln SAR

source: SAMA

source: SAMA

In March 2018 SAMA official foreign currency reserves jumped by 27bln SAR which was most likely due to a 6bln USD capital inflow as a result of the increase in the government’s syndicated USD-loan.

In the first quarter 2018 foreign reserves overall declined gradually by 11 bln SAR after an increase of 42bln SAR in Q4 2017. Overall, foreign currency reserve managed to stabilize above 1800bln SAR. Page 5

Saudi Economic Chartbook Second Quarter 2018

Quarterly Fiscal Balance and Outstanding Government Debt Figure 1: Quarterly Fiscal Revenues (in bln SAR)

Figure 2: Quarterl Fiscal Expenditure (in bln SAR)

Oil revenues

Employee compensation (salaries & wages)

Non-oil revenues

Other current expenditure Capital expenditure

source: MoF

source: MoF

Figure 3: Quarterly Fiscal Deficit/Surplus (in bln SAR)

Net deficit/surplus

Figure 4: Outstanding Government Debt (End of Quarter)

Outstanding local government debt, in bln SAR Outstanding foreign government debt, in bln SAR

source: MoF

In Q1 2018 fiscal revenues increased by 22bln SAR vs. Q1 2017, primarily due to significantly higher tax revenues (VAT, excise tax). Oil revenues were only marginally higher but don’t include an Aramco divi-

source: MoF

dend to be paid in Q2 2017. Expenditure picked up by 20bln, exclusively as a result of a higher payroll and social benefits (citizen account) while capital spending was marginally lower than Q1 2017. Page 6

Saudi Economic Chartbook Second Quarter 2018

Private Spending Indicators and Non-Oil Foreign Trade Figure 1: Point-of-Sales Transactions

Figure 2: ATM Transactions

Point-of-sales transactions, % yoy

ATM withdrawals, % yoy

3-Months Moving Average, % yoy

3-Months Moving Average, % yoy

source: SAMA

source: SAMA

Figure 3: Growth of Non-Oil Exports

Figure 4: Growth of Imports

Non-Oil exports, % yoy

Imports, % yoy

3-Months Moving Average, % yoy

3-Months Moving Average, % yoy

source: GASTAT

source: GASTAT

Point-of-sales transactions as a proxy for private consumption recovered in March after a sharp drop in January due to the introduction of the VAT. ATM transactions also picked up in the course of Q1

2018. Non-oil exports jumped in March 2018 by 36% yoy which could be explained by petrochemical exports (65% of Non-oil exports) where higher oil prices translated into higher product prices. Page 7

Saudi Economic Chartbook Second Quarter 2018

Non-Oil Private Sector Business Climate Indicators Figure 1: Purchasing Manager Index Composite

Figure 2: Purchasing Manager Index Output

Emirates NBD PMI Composite

Emirates NBD PMI Output

6-Months Moving Average

6-Months Moving Average

source: Markit

source: Markit

Figure 3: Purchasing Manager Index New Orders

Figure 4: Purchasing Manager Index Output Prices

Emirates NBD PMI New Orders

Emirates NBD PMI Output Prices

6-Months Moving Average

6-Months Moving Average

source: Markit

source: Markit

Purchasing Manager Indices as a proxy for the business climate of the Non-oil economy continued their notable decline which started in January 2018. In April the Composite index reached a new 9-year low

at 51.4. This slowdown may be explained by the introduction of the fiscal reform measures in January 2018. The most pronounced decline affected New Orders where the index dropped below 50 in April. Page 8

Saudi Economic Chartbook Second Quarter 2018

Consumer and Wholesale Price Inflation Figure 1: Consumer Price Inflation All Items

CPI inflation, % yoy

Figure 2: Consumer Price and Wholesale Price Inflation

CPI inflation, % yoy WPI inflation, % yoy

source: GASTAT

Figure 3: CPI Inflation Food & Housing

CPI inflation, sub-index Food and beverages, % yoy CPI inflation, sub-index Housing, water, electricity, gas and other fuels, % yoy source: GASTAT

After a jump in January due to the introduction of the fiscal reform steps, CPI inflation declined again below 3% in Spring 2018. This may be explained by the subdued economic activity which hasn’t generat-

source: GASTAT

Figure 4: CPI Inflation Furnishings & Transportation

CPI inflation, sub-index Furnishings, household equipment & maintenance, % yoy CPI inflation, sub-index Transport, % yoy source: GASTAT

ed any inflationary pressure so far. Food prices are 6% higher yoy due to the introduction of the 5% VAT while transportation prices have been affected by the gasoline price increase in January. Page 9

Saudi Economic Chartbook Second Quarter 2018

Real Estate Market: Transaction Activity Figure 1: Quarterly Real Estate Transactions Overall Country

Figure 2: Quarterly Residential Real Estate Transactions

Total value of quarterly transactions, %yoy

Total value of quarterly transactions, %yoy

Number of quarterly transactions, %yoy

Number of quarterly transactions, %yoy

source: MOJ, RC

Figure 3: Quarterly Commercial Real Estate Transactions

Total value of quarterly transactions, %yoy Number of quarterly transactions, %yoy source: MOJ, RC

The sharp increase in real estate transaction activity in terms of volumes and number of transactions in Q4 2017 was followed by a corresponding drop in Q1 2018. It seems highly likely that this cyclical mar-

source: MOJ, RC

Figure 4: Breakdown of Transaction Value by Regions (Q1 2018)

Riyadh Region

Eastern Region

Makkah Region

All Other Regions

source: MOJ, RC

ket pattern was mainly caused by the introduction of the VAT in January 2018. In fact, all sales of residential and commercial properties are subject to VAT at the standard rate of 5%. Page 10

Saudi Economic Chartbook Second Quarter 2018

Real Estate Market: Price Indices Figure 1: Residential and Commercial Price Indices

Figure 2: Residential and Commercial Land Price Indices

Residential price index

Residential land price index

Commercial price index

Commercial land price index

source: GASTAT

source: GASTAT

Figure 3: Residential Villas and Apartments Price Indices

Figure 4: Commercial Shops and Centers Price Indices

Residential villas price index

Commercial centers price index

Residential apartments price index

Commercial shops & galleries price index

source: GASTAT

After a period of consolidation in 2017 residential real estate prices gradually dropped in Q1 2018. Commercial property prices continued their downturn into 2018 which is primarily due to a protract-

source: GASTAT

ed decline in commercial land prices. In Q1 2018 property prices of commercial centers saw a decline after a long period of stability, while shops&galleries continued their price recovery since Q2 2017. Page 11

Saudi Economic Chartbook Second Quarter 2018

Oil Market Statistics: Production, Exports, Refinery and Prices Figure 1: Saudi Crude Oil Production and Exports

Figure 2: Saudi Crude Refinery Output and Exports

Saudi Arabian crude oil production, in 1000 bd.

Saudi Arabian total oil refinery output in 1000 bd.

Saudi Arabian crude oil export, in 1000 bd.

Saudi Arabian total oil refinery export, in 1000 bd.

source: JODI, Bloomberg

source: JODI

Figure 3: OPEC Crude Output

OPEC crude oil production, in 1000 bd

Figure 4: Oil Prices

Brent oil price WTI oil price

source: JODI, Bloomberg

During Q1 2018 Saudi Arabia continued to produce crude oil below 10mbd. Meanwhile, exports of crude and refined products picked up in Q1 2018 to overall 9.1 mbd vs. an average of 8.4 for the full year 2017.

source: Bloomberg

OPEC crude output dropped to 31.5 mbd in March 2018 after a peak of 33.6 mbd in 2016 prior to the output cut agreement. Brent oil prices reached 80USD in May, a level last seen in autumn 2014. Page 12

Saudi Economic Chartbook Second Quarter 2018

Foreign Exchange: Forward Rates and Effective Exchange Rate Index Figure 1: 12-Months Forward Exchange Rate SAR/USD

12-months forward exchange rate USD/SAR

Figure 2: SAR Nominal and Real Effective Exchange Rate

SAR Real (CPI-adjusted) trade-weighted exchange rate index SAR Nominal trade-weighted exchange rate index

source: Bloomberg

Figure 3: 12-Months Forward Exchange Rate SAR/USD in the Long Term

12-months forward exchange rate USD/SAR

source: Bloomberg, JP Morgan

Figure 4: SAR Nominal and Real Effective Exchange Rate in the Long Term

SAR Real (CPI-adjusted) trade-weighted exchange rate index SAR Nominal trade-weighted exchange rate index

source: Bloomberg

Higher oil prices and a stabilized balance-ofpayment continue to provide strong support to the USD/SAR peg. As a result, the 12M-FX-forward premium is trading at levels comparable to the period

source: Bloomberg, JPMorgan

of high oil prices 5 years ago. The real and nominal SAR- exchange rate indices appreciated due to the recent strength of the USD against major currencies after a period of extended weakness in 2017. Page 13

Saudi Economic Chartbook Second Quarter 2018

Interest Rates: Money Market, Capital Market and Central Bank Rates Figure 1: 3-Months SAIBOR vs. USD LIBOR

Figure 2: 5-Year Swap Rate SAR vs. USD

3-months SAIBOR SIBOR (Saudi (SaudiInterbank InterbankOffered OfferedRate) Rate)

5-year Swap rate SAR

3-months US LIBOR (London Interbank Offered Rate)

5-year Swap rate USD

source: Bloomberg

source: Bloomberg

Figure 3: KSA USD-Bonds Yield Spread to US Treasuries

30-year maturity

10-year maturity

Figure 4: Central Bank Rate and 3-Months SAIBOR

Reverse repo rate SAMA

5-year maturity

3-months SAIBOR (Saudi Interbank Offered Rate)

source: Bloomberg

source: Bloomberg

SAMA official repo rate

In February 2018 3M USD LIBOR exceeded the 3M SAIBOR rate which caused SAMA to suspend its term repo facility and unilaterally increase its key interest rates prior to the FED in March. Meanwhile

SAIBOR rates are again slightly above LIBOR rates. SAR-USD yield spreads at the longer-end of the curve also notably narrowed with 5-year Swap rates exhibiting a small 60 bp difference in May 2018. Page 14

Saudi Economic Chartbook Second Quarter 2018

Saudi Balance of Payments Figure 1: Current Account Balance

Figure 2: Foreign Workers’ Remittances

Current account balance, quarterly in bln SAR

Foreign workers’ remittances, quarterly in bln SAR (remittances outflow as part of Current account balance)

source: SAMA

source: SAMA

Figure 3: Financial Account Balance

Financial account balance (excluding changes in foreign reserve assets), quarterly in bln SAR (+ capital inflows, - capital outflows) source: SAMA

The balance of payment (net change in foreign reserve assets) witnessed a surplus in Q4 2017 for the first time in three years. This was the result of a positive current account and financial account balance

Figure 4: Contribution to Balance of Payments

Current account balance

Financial account balance

Errors & omissions

Net change in foreign reserve assets

source: SAMA

with the unexplained part of the balance-ofpayment, the error and omissions, being reasonably contained. For Q1 2018 we may expect a slight deficit according to monthly SAMA data (see page 5). Page 15

Saudi Economic Chartbook Second Quarter 2018

Tadawul: Saudi Equity Market Statistics Figure 1: Tadawul All-Share Index

Tadawul All-share index

Figure 2: Tadawul Total Trading Value

Average daily trading value for Tadawul, in mln SAR

10-Weeks Moving Average source: Bloomberg

Figure 3: Weekly Net Purchase by Ownersip (in bln SAR)

source: Tadawul

Figure 4: Weekly Net Purchase by Ownersip (in bln SAR)

Retail Corporates Government related entities (GRE)

Mutual funds High Net Worth Individuals total (HNWI and IPI) Foreign investors total (incl. GCC)

source: Tadawul

source: Tadawul

TASI continued its rally into the second quarter, reaching 8000 in the month of April. This rally was accompanied by rising trading volumes. Daily average traded value achieved almost 5 bln SAR in April

after an average of 3.3bln throughout 2017. In late April and beginning of May, foreign investors, who had previously injected a net amount of about 11bln SAR in 2018 so far, started to take some profits. Page 16

Saudi Economic Chartbook Second Quarter 2018

Tadawul: Saudi Equity Market Statistics Figure 1: Performance TASI Sectors April 2018YTD

Performance in % YTD, including dividends

Figure 2: Quarterly Earnings TASI

TASI quarterly EPS in SAR, l.h.sc TASI 4Q trailing EPS in SAR, r.h.sc.

source: Bloomberg

Figure 3: Valuation TASI: PE-Ratio Trailing

source: Bloomberg

Figure 4: Valuation TASI: PE-Ratio Forward

PE ratio TASI, 12-months trailing earnings

PE ratio TASI, 12-months forward earnings

Long-term average

Long-term average

source: Bloomberg

source: Bloomberg

By the end of April TASI showed a positive performance of 15.4% (including dividends) since the beginning of 2017. Q1 earnings for TASI picked up by 34% vs. Q4 2017 but were 7% below the same peri-

od last year. As a result of the recent strong rally, TASI experienced a PE-multiple expansion at a trailing and forward earnings basis bringing the market valuation gradually above its long-term average. Page 17

Saudi Economic Chartbook Second Quarter 2018

Economic Facts and Figures at a Glance Oil, Inflation and Interest Rates

GDP and Fiscal Indicators 2013 2014 2015 2016

2017 2018f

2013 2014 2015 2016

2017 2018f

Oil Prices and Production (yearly average)

Real GDP Growth Overall economy

2.7

3.7

4.1

1.7

-0.7

1.7

Brent price (USD pb)

108.7

99.5

53.7

44.1

54.8

67.0

Non-oil Private sector

7.0

5.4

3.4

0.1

0.7

1.8

WTI price (USD pb)

98.0

92.9

48.8

43.3

50.9

63.0

Government sector

5.1

3.7

2.7

0.6

1.7

2.0

OPEC Basket price (USD pb)

105.9

96.2

49.5

40.7

52.4

65.0

Oil sector

-1.6

2.1

5.3

3.6

-3.0

1.5

KSA oil production (mln bd)

9.6

9.7

10.2

10.5

9.9

10.0

Inflation and Interest Rates (year end)

Fiscal Balance and Government Debt Fiscal Balance in bln SAR

180

-71

-362

-311

-238

-165

CPI Inflation (yearly average)

3.51

2.24

1.22

2.05

-0.84

3.10

Fiscal Balance in % GDP

6.4

-2.5

-14.8

-12.9

-9.3

-6.0

3M SIBOR SAR

0.96

0.86

1.55

2.04

1.90

2.65

Government debt in bln SAR

60

44

142

317

443

558

Reverse Repo Rate

0.25

0.25

0.50

0.75

1.50

2.50

Government debt as % GDP

2.1

1.6

5.8

13.1

17.3

20.1

Official Repo Rate

2.00

2.00

2.00

2.00

2.00

2.75

source: GASTAT, MOF, RC

source: Bloomberg, SAMA, RC

External Balance

Tadawul Equity Market 2013 2014 2015 2016

2017 2018f

Trade and Current Account

2013 2014 2015 2016

2017 04/18

Key Figures (period end)

Trade Balance in bln SAR

835

690

166

209

382

546

Total Return in %

30.2

0.7

-14.6

8.2

3.7

15.4

Trade Balance in % GDP

29.8

24.3

6.8

8.6

14.9

19.7

P/E-ratio

16.4

18.2

15.9

17.2

17.0

15.2

Current Account in bln SAR

508

277

-213

-90

57

216

P/B-ratio

Current Account in % GDP

18.1

9.8

-8.7

-3.7

2.2

7.8

RoE

source: SAMA, RC

2.0

2.1

1.6

1.7

1.6

1.8

12.2

11.5

10.2

9.7

9.5

11.6

P/E-ratio = Price/ Earnings-ratio , P/B-ratio = Price / Book-ratio all ratios on trailing basis except 2017 forecast (consensus forward-ratios)

source: Bloomberg

Global Economy GDP Growth Rates 2013 2014 2015 2016

2017 2018f

World

3.3

3.4

3.2

3.2

3.8

3.9

Advanced Economies

1.2

1.8

2.1

1.7

2.3

2.5

USA

1.5

2.4

2.6

1.5

2.3

2.9

-0.4

0.8

2.0

1.8

2.3

2.4

Japan

1.6

0.3

1.1

0.9

1.7

1.2

United Kingdom

1.7

2.9

2.2

1.9

1.8

1.6

Emerging Market Economies

5.0

4.7

4.3

4.4

4.8

4.9

China

7.7

7.3

6.9

6.7

6.9

6.6

India

6.9

7.2

8.0

7.1

6.7

7.4

Russia

1.3

0.7

-2.8

-0.2

1.5

1.7

Brazil

2.7

0.1

-3.5

-3.5

1.0

2.3

Euro Area

We expect Saudi economic growth to recover in 2018 by +1.7% after a contraction of -0.7 in 2017. This rebound is the result of a positive contribution by the oil sector, where the output cut 2017 is fading, and a continued recovery of the Non-oil economy fuelled by an expansionary budget in 2018. Due to higher than expected oil revenues the budget deficit will shrink distinctly below its budgeted target of 195 bln SAR. Based on the latest outlook of the IMF, global economic growth is expected to accelerate to 3.9% in 2018 after 3.8% in 2017. This growth acceleration is expected to be broad based, but primarily driven by emerging economies.

source: IMF

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Saudi Economic Chartbook Second Quarter 2018

Disclaimer The information in this report was compiled in good faith from various public sources believed to be reliable. Whilst all reasonable care has been taken to ensure that the facts stated in this report are accurate and that the forecasts, opinions and expectations contained herein are fair and reasonable, Riyad Capital makes no representations or warranties whatsoever as to the accuracy of the data and information provided and, in particular, Riyad Capital does not represent that the information in this report is complete or free from any error. This report is not, and is not to be construed as, an offer to sell or solicitation of an offer to buy any financial securities. Accordingly, no reliance should be placed on the accuracy, fairness or completeness of the information contained in this report. Riyad Capital accepts no liability whatsoever for any loss arising from any use of this report or its contents, and neither Riyad Capital nor any of its respective directors, officers or employees, shall be in any way responsible for the contents hereof. Riyad Capital or its employees or any of its affiliates may have a financial interest in securities or other assets referred to in this report. Opinions, forecasts or projections contained in this report represent Riyad Capital's current opinions or judgment as at the date of this report only and are therefore subject to change without notice. There can be no assurance that future results or events will be consistent with any such opinions, forecasts or projections which represent only one possible outcome. Further such opinions, forecasts or projections are subject to certain risks, uncertainties and assumptions that have not been verified and future actual results or events could differ materially. The value of, or income from, any investments referred to in this report may fluctuate and/or be affected by changes. Past performance is not necessarily an indicative of future performance. Accordingly, investors may receive back less than originally invested amount. This report provide information of a general nature and do not address the circumstances, objectives, and risk tolerance of any particular investor. Therefore, it is not intended to provide personal investment advice and does not take into account the reader’s financial situation or any specific investment objectives or particular needs which the reader’s may have. Before making an investment decision the reader should seek advice from an independent financial, legal, tax and/or other required advisers. This research report might not be reproduced, nor distributed in whole or in part, and all information; opinions, forecasts and projections contained in it are protected by the copyright rules and regulations.

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