• Analysts: 6 catalysts support the continued positive performance of the Saudi stock market



    *Abdulaziz Al-Faki from Dammam


    According to AlEqtisadiah, financial analysts say that Saudi stocks are on track to reach high levels, thanks to six strong key catalysts, as in the forefront of which announced the achievement of about 27 billion riyals surplus in the budget of Saudi Arabia for the first quarter of the year, and the increased liquidity in the market that reach more than four billion riyals.

    They stressed that the incentives that will support the market are the high oil prices, increased foreign investment in the Kingdom, high non-oil revenues, diversification of income sources, and extending the closing auction period in the market.

    They noted that opportunities are still available to invest in the market, but the foreign and domestic investors should choose the best in terms of fair value and return on investment, especially that the appetite of the market to maintain its gains are now dominating the mood, especially before the month of Ramadan.


    Emad Al-Rashid, a financial analyst, said that the market is still going well, especially with positive economic effects and the surplus in the budget of the Kingdom of 27.8 billion riyals in the first quarter of this year, as this is the first surplus budget since 2014.

    Foreign direct investment in the Kingdom increased by 28 per cent and non-oil revenues amounted to SR 76.3 billion in the first quarter of 2019, as a result of the diversification of sources of income according to the "Vision of Saudi Arabia 2030", which is clearly evident in the performance of trading in the Saudi market.

    Opportunities were still available for investment in the market, but the investor remains to choose the good shares in terms of fair price to determine the area of entry and returns for investment in the stock, while price fluctuations in some stocks are a golden opportunity for speculators to achieve a high margin of profits.


    He added, "Liquidity at the close of last Thursday's session was about 5 billion riyals, which is relatively good after the lull in the market for a long period of weak liquidity."

    He pointed out that the market is currently waiting for the return of liquidity levels of eight billion riyals, as a first step to reach higher levels, which is starting at the first levels of the general index 9410 points and then 9600 points.

    He said that the decline in oil prices is healthy and naturally after the wave of rise from levels of $ 64 a barrel to $ 74.

    This is in line with political influences, as the rise will return to higher levels.


    Ahmed Al Salem, a financial analyst, said that the market is now giving positive signals in its performance despite the contrasting results of the banking sector.

    But the appetite of the market is open to maintain the levels achieved, as well as the liquidity ratio that has stabilized above four billion riyals, which means reaching higher levels are possible.

    He explained that the performance of the market this week will have oil access support to $ 75, which is bearing in mind that the rise in oil prices is not the result of an improvement in global growth, but as a result of  the abolition of US exemptions for some countries importing oil from Iran, and the Ministry of Finance's announcement of a budget surplus for the first quarter of 2019 of more than 27 billion riyals will have a positive impact on the market.

    He pointed out that the market also supports the continuation of the Kingdom in the transformation program and achieving the Vision 2030 through the Financial Development Conference, which was held in Riyadh recently.

    He pointed out that these incentives will be received by the foreign investor and local positively.


    He stressed that foreign funds are beginning to witness an increase in purchases and investment in selected stocks in several sectors.

    He added, "The trading period in Ramadan; which was experiencing a recession; will be different from the previous as the foreign investor will be present. So, we may see a different performance that makes the local investor also exist in the market and follow the market during Ramadan. The results of the first quarter began to emerge as 40 companies announced their results."

    He stressed the presence of good signals to the market, which is demonstrating that the sector continues to attract liquidity especially that the most important period of the sector will be in the second quarter and part of the third quarter of this year, through the seasons of Ramadan and Hajj in general.


    Fahmi Sobha, a researcher and economist, expected the rise of the index, which is supported by expected rises in oil prices by May 2, which is the actual date of the effectiveness of US sanctions on Iran, which will be reflected positively on certain sectors in the market, particularly the petrochemical sector."

    Investment liquidity is expected to flow into the market to capture promising opportunities for companies with a future with high returns and rewards as an investment rather than speculation that is in line with Tadawul's announcement that the closing auction will be extended to 20 minutes instead of 10 minutes only for Tuesday, which is coinciding with the start of the implementation of the second phase of the five stages to join the emerging markets, "Ftse Russell" only next Wednesday, according to the closing prices of next Tuesday.


    He pointed out that the market will witness strong buying with the beginning of trading, especially after the announcement of many companies profits in their results for the first quarter 2019, which will lead to the formation of a state of investment entry on some important sectors and vital and influential in the market.

    He pointed out that the purchases will focus on the leading stocks in banks, telecommunications, petrochemicals and construction sector during the coming period.​

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