16/08/2015
Saudi stocks market reach its lowest point in two years
The stocks that were traded yesterday were valued at approximately 3.06 billion riyal, which is considered the lowest in two years. The index closed on a marginal rise at 21.29 point, 0.24% to close at 8790.77 point. The contrast between the highest and lowest points the index reached was 55.48 point. The market’s highest was at 8824.95 point, while its lowest was 8769.47.
The leading companies SABIC and ALRAJHI closed with a marginal rise of less than 1%, while STC, SAVOLA, ALMARAIE, JABAL OMAR and EMAAR rose to 1 to 2%, while ALAHLI’s stocks declined 2%. On the other hand, foreign investment companies owned stocks in 13 company, at a total of 27.6 riyal. The foreign investment in ALARBI bank was about 0.01% which is 3.29 million, 0,02%, which is 2.22 million in the Saudi group, 0.01% at a market value of 2.77 million, 0.07% in SIPCHEM, at market value of 6.82 million. Also, 0.01% in PETRO RABIGH which is 1.93 million, 699 thousand riyal in ALMWASAH at 0.01%, which is the same in DALAH valued by 574, and 1.32 million in the Saudi ground services company at 0.01% as well as JARIR, valued at 1.86 million riyals. As for EMAAR, foreign investment is estimated at 0.03%, which is approximately 3.06 million riyals. Foreign investment in The RED SEA company was around 0.03% which is approximately 1.1 million riyal, as for DAR ARKAN and POPPA it was 0.01% 921 thousand riyals in DAR ARKAN and two millions in POPPA.
Anas AlRajhi, a financial investor said that many factors had led to a lower market liquidity. On top of which is that buyers can be overly cautious, where sellers can refrain from selling stocks that are at a low point. Thus, we notice that some stocks are down without known quantity and with a low liquidity. Generally, stock buyers are still concerned about the oil market’s effect the stock market. The chinse economy, the European crisis, the oil surplus after lifting the ban on Iran’s oil exports, and the US oil shale reserve, are also among the concerns. Even the expected united states Federal budget and how the governmental spending is going to affect all sectors especially the construction sector, increasing the interest rate, is prompting the investors can decide if they want to invest in the stock market or find better opportunities.
Alrajhi has stated that the market prices will change, thus it is better to wait since the market is dull, and rotation that can sometimes rise the market’s liquidity, which is not considered a measure since many of it is considered speculative aiming to rise its rate through rotation. He noted that low liquidity will cause fluctuation, thus, the market would need a liquidity not less than 6 billion, which is twice the current one. At the same time, we should not expect stocks to sink much lower, six banks stocks- which is the most effective sector- is being traded at 11 P/E ratio, and more than stock in the petrochemical’s sector are being traded at their book value if not less. Thus, this Narrow fluctuation is the main effecting factor currently.
