Investors’ Anticipation in the Saudi Market: Rising Liquidity and Oil Price Challenges
Liquidity Rises Amid Oil Price Declines and Market Performance Developments.
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Liquidity
Investors in the Saudi financial market are closely monitoring the performance of leading stocks such as Aramco, SABIC,
and Saudi Telecom Company (stc).
Yesterday, the market saw a significant surge in trading values, reaching their highest levels in over three months,
with an 83% increase compared to the daily average for the same period.
This surge was driven by the November review of the MSCI index, with the auction session accounting for the majority of the trading,
according to Mary Salem, a financial analyst at Al Sharq.
However, the market is facing pressures due to the continued decline in oil prices, which have fallen to $73 per barrel,
negatively affecting the performance of energy sector stocks.
Aramco
Aramco announced the disbursement of its cash dividends today to investors eligible as of November 14,
at a rate of SAR 0.4815 per share, totaling SAR 116.45 billion.
Despite this announcement, the company’s share price saw a slight decline on Monday,
influenced by a 3% drop in oil prices and profit-taking activity, according to Salem.
Leading Stocks
The share price of Al Rajhi Bank dropped by 1.38% during yesterday’s session due to the MSCI index review,
impacting overall market performance. Investor sentiment toward SABIC also declined, as its share price reached its lowest level since 2020.
Meanwhile, Saudi Telecom Company (stc) is set to distribute SAR 2 billion in cash dividends today to shareholders eligible as of November 6, providing an additional boost to market liquidity.
However, Salem noted that current liquidity levels remain insufficient to support sustainable market growth.
Public Investments
Public Investment Fund’s Investment
In another development, the Capital Market Authority approved the request of Saudi Reinsurance Company to increase its capital by issuing shares without pre-emptive rights.
This comes as part of a binding agreement signed with the Public Investment Fund (PIF),
under which the fund will subscribe to the capital increase, acquiring a 23.08% stake in the company.
This agreement propelled the share price of Saudi Reinsurance to its highest historical level,
with a 78% increase since the agreement was announced in July,
reflecting strong investor confidence in the company’s future.
Investors’ Anticipation in the Saudi Market