08 November 2023
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Saudi Aramco announces Q3 fall in net income

Daily Outlook 8 November 2023

By Daniel Richards

Saudi Aramco has released its third quarter results, showing a 23% fall in net income to SAR 122.2bn (USD 32.6bn), down from SAR 159.1bn in Q3 2022. The fall came on the back of both lower production and prices, with Saudi Arabian output down 17.2% y/y and Brent futures prices 12.3% lower y/y. Revenue for Q3 dipped to SAR 424.1bn, from SAR 543.7bn a year earlier. The same dynamics led Saudi Arabia’s budget balance to dip further into deficit in the third quarter. In a positive for the state coffers, however, Aramco has announced that it will be maintaining its dividend payment at SAR 110.3bn (USD 29.4bn), the same as in Q2.

German industrial production contracted by 1.4% m/m in September, larger than the predicted 0.1% contraction and in contrast to the upside surprise in September factory orders in data released the previous day. On an annual basis, production was down 3.7% with the European industrial powerhouse struggling to adjust with weaker export demand from China and higher input prices following the turn away from Russian gas. This marked the fourth month in a row that industrial output has fallen, with autos production and pharmaceuticals both heading lower. In further weak data out of Germany, insolvencies have reportedly risen 2% m/m and 44% y/y in October and the expectation is that Germany will enter a technical recession in Q4 with a second consecutive quarterly contraction.

Egypt has reported 1.3mn visitors for the month of October, y/y growth of 8%, in signs that the conflict in neighbouring Gaza has yet to negatively impact the sector to a significant degree. Tourism minister Ahmed Essa has said that the goal of 15mn visitors this year remains in play, with ambitions to double that to 30mn visitors annually by 2028. Revenue from tourism hit USD 13.6bn in the fiscal year ended in June, exceeding pre-Covid levels and contributing to a meaningful narrowing of the current account deficit to 1.2% of GDP.

The IMF has upgraded its 2023 growth forecast for China to 5.4%, from 4.6% previously according to its Article IV mission statement. The upgrade is on the back of a stronger than anticipated third quarter and some government stimulus measures. However, growth is forecast to slow to 4.6% in 2024.

Today’s key economic data and events

  • 11:00 Germany CPI inflation, % y/y, October final. Initial print: 3.8%

Fixed Income

  • UK gilts rallied on Tuesday after Bank of England chief economist Huw Pill gave hints Monday evening that the central bank would not push back against market pricing for rate cuts next year. Yields on the 2yr fell 9bps to 4.632% while the 10yr dropped 11bps to 4.270%.
  • In the US, the 2yr fell 2bps to 4.9176% while the 10yr ended 8bps lower at 4.5665%.
  • The UAE issued AED 1.1bn in sukuk overnight with a 2yr tranche of AED 550m at 5.22% and a 3yr tranche of AED 550m at 4.85%. The issuances received strong orders from the market.


  • The dollar continued to bounce back against its basket of peers on Tuesday as the DXY index ended the day 0.3% higher at 105.542.
  • The gains came against all of the major pairs, with EUR dipping for a second day to close 0.2% lower at 1.0700 while GBP fell 0.4% to 1.2300.



  • Asian equity markets continued to fall back after the solid gains of last week yesterday. In Asia, the Nikkei ended down 1.3% while the Hang Seng closed 1.7% lower.
  • In Europe, the DAX closed up marginally at 0.1% despite the recent run of bad data out of Germany, while the FTSE 100 (0.1%) and the CAC (0.4%) both closed lower.
  • US equities were the outliers yesterday as they continued to gain with the Dow Jones, the S&P 500, and the NASDAQ adding 0.2%, 0.3%, and 0.9% respectively.
  • Locally, the ADX closed flat while the DFM closed up 0.8%.




  • Weak German factory data and weak Chinese export data yesterday contributed to a worsening global outlook, despite an upside surprise in Chinese imports, and this weighed heavily on oil prices. With the risk premium from the conflict in Gaza dissipating, oil prices have become driven by fundamentals once more and there remain significant questions over demand growth.
  • Adding to the bearish narrative, it was reported that US API numbers saw inventories at Cushing increase by 1.1mn bbl last week which would represent the largest gain since June.
  • Brent futures fell 4.2% on the day to USD 81.6/b, while WTI dropped 4.3% to USD 77.4/b. This marked a three-month low for oil prices.

Written By

Daniel Richards Senior Economist

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