Saudi benchmark index falls marginally as investor sentiment flickers: Closing bell
RIYADH: The Tadawul All Share Index on Sunday closed marginally lower by 38.74 points — or 0.38 percent — to close at 10,251.68 points after touching a peak of 10,316.61 at 10:44 a.m. Saudi time, riding on the uncertainty that has clouded investor sentiment in the past few months.
The advance-decline ratio reflected the sentiment, with 104 stocks of the listed 220 heading north, and 99 turning south. The total trading turnover was SR2.86 billion ($760 million), significantly lower than Thursday’s SR6.7 billion or Wednesday’s SR5.2 billion.
“Today’s traded volumes have been very low; thus, I would not read much into the volatility. However, TASI and the global markets have had a bumpy ride in the past few months,” Pritish Devassy, head of sell-side research of Riyadh-based GIB Capital, told Arab News.
The decline has been palpable as the Saudi benchmark index descended from being one of the fastest-growing markets in the world in the first half of this year to losing steam in the last few months because of the volatility in the oil market.
“TASI has been mimicking oil prices very closely and more so on the days when oil has seen large moves. Brent has declined about 35 percent since mid-June compared to TASI, which has declined by around 20 percent in the same period,” said Devassy.
Moreover, worries about global inflationary trends and the resulting reaction of leading central banks continue to cast a dismal spell over investor sentiments on Tadawul.
“Fears and uncertainty still seem to dominate investor sentiment regarding the global economic prospects, the monetary tightening pursued by most global central banks, and the US Federal Reserve’s adherence to its plan on furthering interest rate hikes to control inflation,” said Raed Mohamed Diab, vice president of investment strategy and research at Kuwait-based Kamco Invest.
However, parallel market Nomu on Sunday displayed a streak of optimism as it closed 264.57 points to end at 18,790.74.
On the announcement front, Saudi Paper Manufacturing Co. recommended the repurchase of up to one million treasury shares on Sunday, not exceeding 5 percent of the issued capital.
According to a statement to Tadawul, the company’s board of directors believed that the share market price was less than its fair value. The recommendation will be submitted to the company’s extraordinary general meeting, the date of which will be announced later. The company’s share price gained 3.01 percent to end at SR23.26.
Saudi Basic Industries Corp. also announced that it signed a memorandum of understanding with Saudi Arabian Oil Co. and China Petroleum & Chemical Corp. to assess the economic and technical feasibility of developing an integrated petrochemical complex with a local refinery in Yanbu Industrial City.
The MoU is valid for 18 months, SABIC said in a statement to Tadawul. The company’s share price increased by 0.74 percent to close at SR82.1.
Saudi Arabian Mining Co. on Sunday also signed a renewal and a five-year extension of its Murabaha revolving credit facility, which was previously renewed on Dec. 13, 2017.
The facility, which is currently undrawn, was increased from SR7.50 billion to SR11.25 billion to reduce the risk of commodity price downturn, strengthen the company’s liquidity and support future growth projects, it said in a statement on Tadawul. The share price of the company gained 0.31 percent to SR65.3.
