Arab News – Saudi Stock Exchange’s total equity market capitalization rose by 1.71 percent to SR1.66 trillion ($441.84 billion) at the end of last month over the close of October, according to the latest data.
On Sunday, however, the Tadawul All-Share Index (TASI) dipped 0.1 percent to 7,261 points as traders awaited the Kingdom’s annual budget announcement due this month.
“The budget is likely to reflect the new state of affairs in the oil income including some measured reductions,” said Fawaz Alfawaz, a Riyadh-based economic consultant.
On oil markets Friday, US oil benchmark West Texas Intermediate (WTI) for delivery in January was down $1.04 at $40.04 a barrel.
Brent North Sea crude for January fell 60 cents to $43.24.
Alfawaz further commented: “I really do not think we should be too apologetic about dealing with the ramifications of a commodity- dependent economy. Oil declined in line with other commodities.”
The Saudi economy benefited immensely from the oil’s recurring cycle until the price started to decline in June of 2014, he said.
“The key thing is really to continue to service the infrastructure projects over the next few years, keep the public borrowing as low as possible, and to draw on the financial reserves in gradual measured approach,” said.
“The last serious bout of decline in the price oil in mid/late 1980s should give the Saudi decision makers enough experience. The strategic imperative is to augment the efforts to make the Saudi economy less dependent on the inherent oil cyclicality,” he added.
The Petrochemical Industries sector, a major component of the Saudi bourse, has lost 15.42 percent so far this year — reflecting investors’ concerns over oil prices.
The index rose slightly on Sunday to 4,953.83 points.
The value of traded shares reached SR4.85 billion on Sunday.
“The Saudi market has been trading sideways for sometime as investors await more clarity on macroeconomic policy,” said Mohammad Al-Shammasi, chief investment officer at Riyadh-based Derayah Financial, was quoted as saying in a Reuters report.
Jabal Omar Development fell 2.8 percent after reporting a 78 percent drop in annual profit that the property company blamed on lower sales and higher costs, Reuters added.
Bahri, the largest Saudi transport company by market value, jumped 4.9 percent.
Kingdom Holding rose 9.6 percent. After market close on Thursday, the company said a French sovereign wealth fund, CDCIC, along with other unidentified French companies, bought a 0.8 percent stake.
Saudi Arabian Fertilizer Company (SAFCO) rose 2.9 percent after the company said its dividend for the second half of 2015 would match the SR3 ($0.80) per share it paid in the corresponding period of last year.
The company has been hit by lower oil prices, posting falling profits in the previous four quarters, which forced it to trim its first-half payout earlier this year.
Al-Tayyar shed 4.2 percent to SR74, well off its intraday high of SR81. Last week, the Saudi travel company climbed 21.2 percent in the final three trading sessions in unusually heavy trade after traders cited rumors that a Saudi investment company would buy a stake in the firm.
According to Tadawul statistics, TASI lost 13.12 percent (1,093.37 points) last month. Highest close level for the index during the month was 7,251.64 on 29/11/2015.
The total value of shares traded for the month of November 2015 reached SR107.62 billion ($28.70 billion), increasing by 5.06 percent over the previous month.
London-based James Reeve, deputy chief economist and assistant general manager at Samba Financial Group, told Arab News: “ I think that 2016 will be a tough year for the economy. Oil prices are likely to trend lower and government spending will likely be cut. A recession might be avoided, but only just 2017 looks better assuming oil prices start to rise as we expect them to. One piece of good news is that the stronger dollar will mean cheaper imports. Interest rates are heading up, but they will remain low by historical standards.”