• Saudi stocks recorded in 2020 the second longest streak in its history ... and the highest liquidity since 2014


    ​Saudi stocks rose for the fifth year to achieve the second-longest annual streak in its history and the longest since 2006, reaching its highest level since 2008, ending 2020 at 8,689 points with a gain of 300 points, or 3.58 percent.

    The market increased its market value of 106 billion riyals, by 1.2 percent, to reach 9.1 trillion riyals. On the other hand, the MT30 index, which measures the performance of the blue-chips, fell by 1.7 percent to close at 1182 points, losing 20 points.
    The performance was in line with the previous annual report, where it was indicated that surpassing the corrective path would make 8800 levels a target. The market’s highest level during the year was at 8765, a difference of 0.39 percent from the target.​
    The market witnessed sharp fluctuations during the year, as the volatility reached 32 percent, the highest since 2015 points, after the outbreak of the Coronavirus in the world, and it had a direct reflection on the global economy, which slowed with the direction of countries to periods of closure, and had repercussions on commodity prices that Sharp declines were recorded, including oil, which recorded negative prices in the spot markets for the first time, and the negative impact did not extend to the yellow metal, of course, for investors' direction to safe havens in such circumstances.​
    With the increasing concern of investors about the repercussions of Corona, financial markets witnessed sharp declines in the first quarter of the year. Governments in the world benefited from the 2008 financial crisis in moving quickly to protect groups of society and companies to control crises, which prompted them to move quickly to confront Corona risks, and this contributed to reducing the impact of the pandemic on the economy.
    These stimulus packages, which exceeded $ 11 trillion, “equivalent to 12 percent of global GDP”, had the effect of positively moving markets in the second quarter and until the end of the year, pushing oil prices to an improvement as a result of the growth in demand after the closure period, in addition to Saudi Arabia leading a new agreement. To reduce oil production in OPEC and non-OPEC members.​

    The improvement in oil prices and the resumption of economic activity was reflected locally in the energy sector and the petrochemical sector, especially with expectations that the global economy will achieve positive growth in 2020 by 5.2 percent, which improves investor expectations.
    Locally, Saudi Arabia has implemented several packages and incentive programs to protect society and the economy, so that the Saudi economy performs better than the average growth of the G20 countries, and is fifth in the ranking in the group.
    Saudi stocks made a strong jump from mid-March to the end of the year, as they rose during the period by nearly 46 percent, and 81 companies doubled their market value at least once, and activity is higher in medium and small companies, while the leading companies, in general, did not achieve performance. Positive, according to the MT30 index.
    The positive performance of the index attracted the interest of idle portfolios and even new investors. Until the third quarter, the number of individuals investing in the market increased by about 68 thousand individuals, which pushed more liquidity to the market, which recorded during the year about two trillion riyals, the highest since 2014, and the high liquidity sparked speculative tendency among dealers And with low borrowing rates boosting risk appetite, rates found themselves in a high upward pace until profitability multiples approached 30 times.​

    When excluding Aramco shares, for the difference in size, the profit multiplier is 43 times, and the book value is 1.96 times. Higher valuations put more pressure on companies to achieve financial performance that reflects higher investor expectations.
    In light of the high uncertainty, and the market’s need for a period to overcome the consequences of the Corona pandemic and restore the volume of business that it was before the virus, the difficulty of companies achieving profits that improves the basic factors sufficiently and keeps them attractive appears, which is likely to enter the market in a corrective wave, as a result of the preference to sell to reap Capital gains. Technically, the levels of 8700 are strong resistance to the market, while the support is at 7830 points. If it is broken, the market will be exposed to declines until the levels of 6900 points at least.​

    Overall market performance

    Saudi stocks opened in 2020 at 6389 points, and achieved the highest point at 8,765 points, winning 4.5 percent at the time, while the lowest point was at 5959 points, losing 29 percent, and at the end of the year, it closed at 8,689 points, gaining 300 points, or 3.58 percent.
    Trading values ​​rose 1.2 trillion riyals to reach two trillion riyals by about 135 percent, while traded shares rose 136 percent by 45 billion shares to reach 78 billion shares, and deals rose 167 percent by about 47 million deals to reach 75 million deals.
    The market value of the market rose by 106 billion riyals by 1.2 percent to reach 9.1 trillion riyals. In terms of sectors, four sectors declined against the rise of the rest. The rise was led by “applications and technical services” by 185 percent, followed by “long-term goods” by 63 percent, and the third by “food fragmentation” by 59 percent.

    The decline was led by "commercial and professional services" by 15 percent, followed by "banks" by 6.4 percent, and by "management and development of real estate" by 3.6 percent.
    In stocks, 37 companies fell, while the rest rose. The rise was led by "Paper Industry" by 381 percent to close at 64.60 riyals, followed by "Wafra" by 331 percent to close at 154 riyals, and the third by "Arab Sea" by 288 percent, to close at 21.98 riyals.
    The decline was led by "Petro Rabigh" by 36 percent to close at 13.82 riyals, followed by "SABB" by 29 percent to close at 24.72 riyals, and the "Arab National" by 26 percent to close at 20.10 riyals.

    Performance market growth

    The parallel market "Nomu" ended the year at a record level, closed at 26245 points, with a gain of 19,066 points, or 265 percent. The highest point was at 26771 points, a gain of 273 percent, while the lowest point was at 4829 points, losing 33 percent.
    Trading values ​​rose 212 percent by about 4.8 billion riyals to reach seven billion riyals, while traded shares rose 36 percent by 28 million shares to reach 105 million shares, and deals rose 106 percent by about 145,000 deals to reach 282,000 deals.
    All stocks, including those listed, rose during the year. The rise was issued by "Sumou" by 243 percent to close at 99 riyals, followed by "National Construction and Marketing" by 227 percent to close at 914.80 riyals, and the third "Development Food" by 139 percent to close at 188.60 SAR.

    Economic Reports Unit​​​


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