HOUSE OVERSIGHT 029462 OPEC is succeeding at rebalancing the oil market. Our supply/demand balances reflect a faster-than-expected market tightening due to improving cyclical conditions, cold winter, and OPEC compliance. A gradual OPEC+ deal exit would keep spot and forward prices in a range with the market in backwardation, and preserve OPEC's long-run market share. Contents Macro: growth bull, fiscal bear 2018 budget expans ens don't come cheap A US$20bn price tag for growth Government stimu us in the pipe ins Rev sed Fisca Ba ance program --- more growth, more r sk Macro tab c Equity strategy: opportunity abounds as momentum picks up KSA trading in ins w in GEMs -iesp te improving outlook Banks & petchems preferred; select vs elsewhere National Champions strategy remains attractive 2018 - the year of potential tw n index nclus ons Banks: budget supports positive outlook Saudi banks key beneficiary of ic)osened fiscal po 2018 shaping up to he a strong year for the Saud ICY banks Consumer: factors align for a more positive outlook Easing austerity, higher growth boost disposable income Expat levies: uniform fees, d fferentiated mpact Petchems: government support to continue for an extended duration Delay in feedstock prices and electricity tariff hikes Types of support for the sector from the government Healthcare: no surprises