HOUSE_OVERSIGHT_016154.jpg
1.32 MB
Extraction Summary
0
People
9
Organizations
1
Locations
0
Events
0
Relationships
4
Quotes
Document Information
Type:
Financial research report / market analysis
File Size:
1.32 MB
Summary
This document is page 44 of a BofA Merrill Lynch financial research report titled 'GEMs Paper #26', dated June 30, 2016. It analyzes the Saudi Arabian economy, specifically focusing on earnings revision ratios (ERR), Brent Crude oil prices, and GEM fund allocations. The document bears the Bates stamp 'HOUSE_OVERSIGHT_016154', indicating it is part of evidence collected by the House Oversight Committee, likely related to investigations into financial institutions' dealings with Jeffrey Epstein, though Epstein is not named on this specific page.
Organizations (9)
Locations (1)
| Location | Context |
|---|---|
Key Quotes (4)
"Saudi ERR's are showing signs of inflecting despite one of the most protracted periods of earnings downgrades."Source
HOUSE_OVERSIGHT_016154.jpg
Quote #1
"With Saudi Arabia remaining off benchmark... GEM funds allocation to Saudi Arabia remains relatively low at just 0.25% (of total GEMs AUM)."Source
HOUSE_OVERSIGHT_016154.jpg
Quote #2
"With the NTP looking to diversify the Saudi economy away from the oil sector... we believe confidence in the longer term economic outlook could improve"Source
HOUSE_OVERSIGHT_016154.jpg
Quote #3
"Given our view that crude oil prices will likely post growing momentum in 2017, moving substantially above US$50/bbl"Source
HOUSE_OVERSIGHT_016154.jpg
Quote #4
Full Extracted Text
Complete text extracted from the document (1,938 characters)
Chart 49: Saudi ERR's are showing signs of inflecting despite one of the most protracted periods of earnings downgrades.
[Chart 49 Graph showing ERR (LHS) and Brent Crude (US$/bbl- RHS) from Jan-11 to Jan-16]
Source: DataStream, I/B/E/S, Bloomberg, BofA Merrill Lynch Global Research
Off benchmark and out of mind? Growing confidence could drive rerating
With Saudi Arabia remaining off benchmark (it is not currently part of any major indices such as the MSCI EM or FM), GEM funds allocation to Saudi Arabia remains relatively low at just 0.25% (of total GEMs AUM). Whilst allocation levels are relatively high versus history, they are still significantly below the levels implied by MSCI EM inclusion (1.4%) or suggesting a level of apathy towards the market.
With Saudi Arabia remaining off benchmark (it is not currently part of any major indices such as the MSCI EM or FM), GEM funds allocation to Saudi Arabia remains relatively low at just 0.25% (of total GEMs AUM). Whilst allocation levels are relatively high versus history, they are still significantly below the levels implied by MSCI EM inclusion (1.4%) or suggesting a level of apathy towards the market.
Chart 50: GEM fund allocation in Saudi (asset-weighted)*
[Chart 50 Graph showing GEM funds, allocation in Saudi vs MSCI Saudi market cap as % of MSCI EM (rhs) % from 06 to 16]
Source: EPFR, BofA Merrill Lynch Global Research.*Market cap as % of MSCI EM represents and artificially constructed benchmark weight assuming that this market was a member of MSCI EM index
With the NTP looking to diversify the Saudi economy away from the oil sector (and reduce its reliance on a higher oil prices), we believe confidence in the longer term economic outlook could improve, ultimately driving earnings momentum and a market rerating. Given our view that crude oil prices will likely post growing momentum in 2017, moving substantially above US$50/bbl, even a partial success of the NTP program would likely be sufficient to improve market confidence.
CMA reforms (likely linked to the NTP), a potential catalyst for market rerating
Furthermore, reforms being introduced by the Saudi Capital Markets Authority (CMA) to attract greater foreign participation in the Saudi market (see below) indicate Saudi is
Furthermore, reforms being introduced by the Saudi Capital Markets Authority (CMA) to attract greater foreign participation in the Saudi market (see below) indicate Saudi is
44 GEMs Paper #26 | 30 June 2016
Merrill Lynch
HOUSE_OVERSIGHT_016154
Merrill Lynch
HOUSE_OVERSIGHT_016154
Discussion 0
No comments yet
Be the first to share your thoughts on this epstein document