The financial analysts said to "AlEqtisadiah," there are short-term market-awaited motivation. They confirmed the promising investment opportunities in the market.
They pointed out that the eyes of investors in the next phase will be destined to objects of expenditure in the state budget of 2019, especially with regard to supporting projects for the private sector, in the construction and cement companies.
They added that the decline in oil prices may be a temporary pressure on the index of the Saudi stock market. They noted that there are still opportunities to invest in companies that hold a promising outlook in the medium term.
Hussein al-arqaib, a financial analyst, said that the period of corporate announcements for the third quarter ends today. Despite the apparent drop in second-quarter results, especially in two sectors that are dependent on increased profit growth, which are the banking sector that has fallen 0.5 per cent, and the petrochemical sector that has fallen 12 per cent on a quarterly basis. However, the results for the nine months are still 10 percent higher than last year's 2107.
He added that the decline in oil prices may put pressure on the index of the market, as the correlation between the market index and oil may return to high rates.
He pointed to the decline of oil that negatively affects the index, especially in the absence of incentives.
"There may be drop in liquidity levels and sharpness in daily fluctuations that will reduce speculative appetite," he added.
For his part, Mohammed al-Shomimri, a financial analyst, said that the market is moving in the daily bullish direction, but it is moving in a bearish direction in terms of weekly performance.
He pointed out that the market could not penetrate the important resistance area that is 7880 and 7920 points, so it is important to exceed the level of 7920 to target the area of 8080 points. If the index broke this region, it will bring upward momentum to the market.
He pointed out that the market closed last week at 7743 points, so the next support areas are 7666 points, 7510 points and 7300 points.
This is indicating that the market must target 7920 points to be able to move towards the positive.
He pointed out that most companies announced financial results for the third quarter.
There are 131 companies that have announced their financial results, and have consolidated profits of SR 82.7 billion, up 10 per cent.
Most insurance companies remain to announce, which is indicating that the size of the capital of these companies is not significant and influential in the market.
He added that there are positive incentives will support the market, including the continued growth of the Saudi economy and oil prices, as the market is promised to enter the global indices of emerging markets in the first quarter 2019.
They are catalysts that continually give optimism in the positive path.
He pointed out that the market needs improvement in liquidity levels, where it was weak and did not exceed 2.6 billion at the end of last week, and traded 123 million shares, which is a very weak trading level.
He said that in the case of continued weakness of trading, it is difficult to penetrate important resistance areas.
He stressed that the market suffers from weakness in liquidity and this is clear and influential.
Furthermore, Fahmi Sobhah, a researcher and economic expert, said that despite the negative effects on the market, especially the global geopolitical factors and the anticipation of the market to announce the rest of the results of companies, the market on a date close to the announcement of the general state budget of 2019, which is the highest since its unification. It is expected to reach more than 1.106 trillion riyals as an expansionary budget in spending and expected revenue volume of 978 billion riyals, and an expected drop in inflation from 2.8 per cent in 2018 to 2.3 per cent in 2019.
He added that the continued decline in inflation indicators, and preparations for the announcement of new government projects next year, in addition to the strategic projects launched during the current year, especially in the infrastructure supports the private sector in the recovery of the construction sector with all its companies, specifically the cement companies. After the visit of the Custodian of the Two Holy Mosques to the regions of Qassim and Hail, about 600 projects were announced at a cost of 16 billion riyals.
He explained that the results of the third quarter of the general budget indicate a significant increase in revenues up to 663 billion in 2018, compared to 450 billion from the same period in 2017, a rise of 47 per cent.
Expenditures also recorded a marked decline at the end of the third quarter of 2018, which was amounted to 572 billion compared to the same period in 2017 that was amounting to 712 billion at a decrease of 21 per cent, in addition to a decrease in the deficit to the level of seven billion riyals, compared to the same period of 2017, and reaching 49 billion, a decrease of 42 billion and 85 per cent.
This is due to the rise in international oil prices, all of which support the Saudi market away from developments in global geopolitical developments and their potential impact on markets.
Saudi stocks fell 135 points, or 1.7 per cent, where it closed at 7743 points, reaching 1.83 trillion riyals.
As of the end of last week, 131 companies announced their financial results.
The consolidated profit for the third quarter was 27.5 billion riyals, up 4 percent from the same quarter last year, and 42 companies, mostly in the insurance sector, have not yet reported their results.
The results so far are good, which is keeping earnings close to the average as they trade 17 times according to the last 12 months.
14 sectors fell compared to the rise of six sectors.
The decline was led by "food production" by 6.42 per cent, followed by "pharmaceutical sector" by 6.4 percent.
Six sectors rise, which were led by "the capital goods sector" by 4.35 percent, followed by "business services" by 1.7 per cent.
The highest turnovers were "basic materials" of 31 per cent with a value of SAR 4.2 billion, followed by "banks" by 18 per cent with a value of 2.5 billion riyals, and "Insurance" by 9 per cent with a value of 1.3 billion riyals.
The highest turnovers were "SIECO" by 27 per cent to close at SAR147.80, followed by "SFICO" by 21 per cent to close at 24.20 riyals, and then "Gulf Union" by 20 per cent to close at SAR 15.16.
The decline was led by "Savola" by 12 per cent to close at SAR 27.85, followed by "Wafa Insurance" by 11 per cent to close at 10.08 riyals, and then "Saudi German Hospital" by 9.8 per cent to close at 32.45 riyals.
"SABIC" had the highest turnover of SR 1.9 billion, followed by "Alinma" with a value of 1.7 billion riyals, and "Saudi Kayan" with a value of 472 million riyals
