Ahmed Al-Rasheed from Riyadh
Saudi stocks are back in circulation today after stopping the Eid al-Fitr holiday, as the market ended the last week before the holiday, up nearly 333 points, or nearly 5 percent, to offset part of its losses since the beginning of the year, which amounted to 16 percent so far.
The market will find a good boost during the week, interacting with the trend towards normal life in its new concept that takes into account social divergence, and the return of economic activities in Saudi Arabia to its normal levels gradually, with restrictions being eased from today, provided that the ban will lift the end of Shawwal, amid closing the movement of international individuals and allowing movement internally.
And Saudi stocks recorded in the week before the vacation, their third-best week this year, after rising about 5 percent, to close at 7050 points with the increasing pace of the rise and market activity, as trading values increased 48 percent with nine billion riyals.
While the "MT30" index, which measures the performance of the leading stocks, rose 5.8 percent by about 54 points, to show the superiority of the performance of the leading stock over the performance of the general index, which reflects the preference of traders.
The highest point during the week was at 7084 points, but it did not close then the market ended that session at 7050 points, as it maintained this level in the last two sessions.
The general index opened the week at 6,716 points, achieving the highest point during the week at 7,084 points, with gains of 5.5 percent, and at the end of the week, it closed at 7,050 points with gains of 333 points, or 4.9 percent. While the value of shares traded rose 48 percent by about nine billion riyals to reach 27.7 billion riyals and traded shares rose 20 percent by about 191 million traded shares, while deals increased 8 percent by about 77 thousand deals to reach 995 thousand deals.
All sectors rose, except for "long-term goods", which fell 1.1 percent, and the rise was led by "food segmentation" 9.6 percent, followed by "transportation" 7.8 percent, and thirdly, "fragmentation of luxury goods" 6.7 percent.
The highest turnover was "banks" 22% with a value of six billion riyals, followed by "basic materials" 19% with a value of 5.2 billion riyals, and thirdly, "Communications" 11% with a value of three billion riyals.
And the rise was led by "fish" 50 percent to close at 24.26 riyals, followed by "Samba" 15.4 percent to close at 23.56 riyals, and thirdly, "ASIC" 15 percent to close at 23.48 riyals. The decline was led by "Al-Andalus" 8.3 percent to close at 14.54 riyals, followed by "Al-Aseel" 3.7 percent to close at 47.20 riyals, and thirdly, "Misk" 3.4 percent to close at 8.31 riyals.
The highest turnover was "STC" with a value of 2.6 billion riyals, followed by "Aramco" with a value of 2.3 billion riyals, and thirdly, "Al-Rajhi" with a value of 2.1 billion riyals.
The Saudi market receives support from the statements of Finance Minister Mohamed Al-Jadaan, who stressed the strength and durability of the Saudi economy, indicating that gradually reopening economic activities and the step-by-step plan to lift the curfew, represents a new stage in the face of the global epidemic crisis, and towards the return of activities in the Kingdom to its normal levels.
He explained that these decisions were taken after continuous coordination between the Ministry of Health and the concerned authorities, by relying on a focused plan that seeks to balance between procedures for reopening economic activities and maintaining the stability of health and social conditions.
He stressed that the government continues to implement its development plans that support growth and economic diversification and enhance the role of the private sector and support local content, whether through the state’s general budget or through the role played by development funds and public investment funds, to improve economic performance and develop the return on the Kingdom’s assets.
The index stands at a level close to the resistance 7070 points, which bypassing the market will seek to reach levels of 7700 points, but the fundamentals are still weak with the repeaters of profitability rising to almost 25 times excluding the profits of "Aramco" due to its huge size.
Profits recorded a 27 percent decline to reach 75 billion riyals, which is the result of the combined profits of 97 companies announcing the first-quarter results so far, and when Aramco’s profits are excluded from these results, profits will be at 11.7 billion riyals, which means a 46 percent decline.
With profits declining and the direction of some companies not to distribute profits, it may make the market without support helping it to remain at high levels, but the government's continued implementation of its development plans in support of growth and economic diversification and enhancing the role of the private sector and supporting local content, keep the chances of the market not slipping into a sharp decline.
Globally, the dealings received a strong boost from the increase in oil prices, which recorded the highest monthly increase since 1999, as the price of Brent crude jumped 40 percent in May, and the picture does not appear encouraging with the decline of the US economy, and the US Federal Reserve is concerned about the risks of the second wave of Coronavirus, as options are limited with the recent interest rate cut, quantitative easing program, and high balance sheet.
Failure to reach a final agreement on trade between the United States and China and doubts about reaching a final agreement in light of the continued increase in political tension, in addition to the world's countries seeking to return to economic activity in light of the continuing pandemic of Corona, and betting on the ability of work and natural transportation, make the financial markets under pressure and performance not serve dealers.