With prices climbing more than 60 cents a gallon since January 1, President Barack Obama discussed energy and rising gas prices—a top-of-mind issue for motorists across the country including AAA’s more than 53 million members—in a meeting with AAA.

Following his speech on energy issues in Cushing, Oklahoma, the President spoke to a representative of the nation’s largest auto club that serves one-in-four American households. As an advocate of motorists nationwide, AAA asked the President questions likely to be foremost in the minds of drivers feeling the pain at the pump.

When asked by AAA to comment on the frustration and confusion that U.S motorists are experiencing with rising gas prices, the President said, “I understand what folks are going through because it wasn’t that long ago that I was having to fill up my gas tank and drive to work, shuttle the kids back and forth to school or events. It takes a big bite out of folks’ paychecks.”

The President went on to say that the U.S. has experienced cyclical gas prices for decades and stressed the importance of America having more control over its own energy security.

AAA also inquired about the role of the President in addressing prices at the pump given the global forces and political tensions abroad that drive the oil and energy markets. The President elaborated on points from his earlier speech, saying, “The most important thing I can do as the President is not to simply focus on tomorrow.

It’s focusing on getting America properly aimed toward our goal of continuing to reduce our dependence on foreign oil.” The President also highlighted the importance of maintaining growth and productivity while further reducing U.S. oil consumption. The president noted that pressure on oil prices in the coming two decades will be difficult to reverse.

Even as a 110-year old organization whose origins date to the earliest days of the motor vehicle, AAA continues to explore new vehicle technologies to offer enhanced and improved services to members. Responding to member interest, AAA began testing a roadside service vehicle capable of providing charging assistance to electric vehicles.

As to public acceptance of new technologies, the President said, “People need to feel confident that when they get into an electric car they’re not going to get stuck. To the extent that we start having both more efficient batteries and distribution capacity, people can feel confident that they’re never going to get stuck, or at least not any more stuck than they do when they forget to fill up and then call AAA.”

The President also shared insight about the role of alternative-fuel vehicles as a possible solution to current high fuel costs. President Obama noted that fuel efficiency standards for cars and trucks have doubled, which will result in fewer trips to the gas station and a savings for the average family of about $8,000 over the life of the car.

As to the future, the president is optimistic. “If we unleash American creativity, if we properly incentivize people to think about fuel economy as part of overall design, Americans can make great cars.”

While he is no longer able to do his own driving, AAA couldn’t pass up the opportunity to ask President Obama about his first car. Noting he had been AAA member for years, he said, “I have to confess, my first car was my grandfather’s car, which was a Ford Granada.

It rattled and it shook, and I don’t think the girls were particularly impressed when I came to pick them up in a Ford Granada. But you know what? It moved, and so I have fond memories of the fact that it got me to where I needed to go.”

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Alkhabeer Capital, a leading Saudi investment company, has recently released its latest global economic outlook for 2012. According to Alkhabeer Capital, the combined GDP of the GCC region is expected to register a growth in excess of 4% where Qatar will top the list with (7%) followed by Saudi Arabia (4.6%), Kuwait (3%), Oman (2.7%), UAE (2.4%) and Bahrain (1.2%).

At the same time, regional inflation is also expected to ease as commodities and global growth flattens during 2012. Alkhabeer Capital believes that Saudi Arabia will emerge as the leading Frontier economy with a lower debt profile (total debt 58% of GDP), higher investment (23% of GDP) and rising infrastructure spending.

Saudi Arabia’s growth is mainly derived from an expected jump in budgetary development spending (up 16%) as an outcome of USD 133 billion economic stimulus package announced by the government. Al-Khabeer’s forecast for Arabian crude for 2012 has taken into account a 5% decline in prices along with a 2% appreciation for USD.

While an investor in a Frontier economy is concerned primarily with currency movement and inflation, Saudi Arabia is unique because its peg with the USD means stable currency while monetary measures – money supply – is used to ease imported inflation. Based upon Alkhabeer Capital’s oil price outlook and past Saudi Central Bank measures, it can be concluded that 2012 inflation is unlikely to exceed 4%.

Saudi equities are also expected to project good returns with modest risk. Trading at a PE of 11.5 and yielding 3% dividend, Saudi equities are the best pick amongst Frontier world with a price appreciation potential of 17%.

Global growth: Unlikely to exceed 2.5%

Europe is expected to shrink by 0.6%, USA unlikely to post higher than 1.5% growth and the Emerging world likely to post 5.1% growth; the global economic growth is expected to close around 2.5% for the year 2012, wherein China may contribute more than 40% of total global economic growth.

2012: Year of bargain hunting in equities

After reviewing all the asset classes and taking into account economic growth estimates, Alkhabeer Capital concludes that bargain hunting in equities is likely to generate the most optimum return depending on the investors’ appetite for risk.

UK equities: Best amongst Developed world

Trading at a PE of 10.5 and yielding 3% dividend, UK equities are likely to be the best pick amongst the Developed world, with a price appreciation potential of up to 30%.

Russian equities: Highest growth potential

Trading at a PE of 9.5 and yielding 2% dividend, Russian equities are expected to be the best pick amongst Emerging world, with a price appreciation potential of 32%.

Saudi equities: Good returns with modest risk

Trading at a PE of 11.5 and yielding 3% dividend, Saudi equities are the best pick amongst Frontier world, with a price appreciation potential of 17%. Based on our global growth expectations, we believe that sectors which are domestically focused such as Cement, Food and Retail are likely to be outperformers this year.

Wider GCC Equities

Alkhabeer Capital recommends high dividend Kuwaiti stocks, selected equities in Omani hospitality & logistics sector and Qatari equities.

Commodities: Flat to negative performance

Slower growth in consumption, higher growth in supply and lesser depreciation in the value of currencies suggest medium to long term outlook for commodities at flat to negative.

Oil Prices: Expected to decline by 5%

Based upon additional supplies, a modest appreciation in the US dollar and a slowdown in global consumption growth, Alkhabeer Capital expects oil prices to shrink by 5% in 2012.

Ammar  Shata, Executive Director & CEO of Alkhabeer Capital commented:

“I am delighted to announce our 2012 Economic Outlook written by our in-house research team, which identifies a range of investment opportunities both regionally and globally where investors can still secure a return on their investments.

We specialize in providing our institutional and high net worth client base with the most in-depth investment advice possible, which combines our global investment perspectives with our regional in-depth expertise of Sharia’a compliant investments. I am therefore delighted to release our 2012 Economic Outlook report, which outlines our investment thoughts for 2012 and look forward to providing further investment insights in the year ahead.”

Image Courtesy of   http://www.flickr.com/photos/bahraindiplomatic/

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