The Saudi stock market index declined at the end of trading, today, Wednesday, in conjunction with… Strong drop in oil prices.
Oil prices continued to decline today, Wednesday, as investors worried about the weakness of the global economy, and the possibility that central banks will raise interest rates and increase restrictions to curb the outbreak of Covid-19 in China.
US West Texas Intermediate crude contracts fell $2.58, or 2.82%, to $89.06 a barrel by 0939 GMT, after dropping $5.37 in the previous session due to recession fears.
Brent crude futures for October delivery, due to expire today, also fell $3.56 at $95.75 a barrel, after falling $5.78 on Tuesday. And future contracts for November delivery fell $2.70, or 2.76%, at $95.14 a barrel.
And the main market index (TASI) recorded a decline at the end of trading today by 1.38%, or 172 points, at the level of 12,283 points.
The value of trades amounted to 8.3 billion riyals through trading about 193.4 million shares.
The prices of 37 shares rose, led by “Cooperative” by 3.68%, compared to a decline of 169 shares, led by “Bawan” by 4.76%, among 217 listed companies.
The most active stocks in terms of trading value are issued by “STC”, SABIC Nutrients, SABIC, Al-Rajhi, and Ma’aden.
While STC, Tasnee, Dar Al Arkan, Petro Rabigh, and Aramco lead the trading volumes.
The CEO of Derayah Financial, Muhammad Al-Shamasi, said that the results of Saudi companies in the second quarter of 2022 were positive for various market sectors, and recorded a growth of 14% compared to the previous quarter.
Al-Shamasi added, in an interview with Al-Arabiya, that the positive results were led by the profits of Aramco and the banking sector in general.
He expected these levels of profitability to continue during the coming period, with a profit of 190 billion riyals likely to be recorded for the next two quarters.
He stated that the Saudi market has decreased profitability multipliers with positive results for companies, reaching 17.5 times, and this corresponds to the historical levels recorded by the market.
Al-Shammasi revealed the factors supporting the market such as the stability of the exchange rate, a rise in credit quality, and positive expectations for economic growth, as well as the improvement of foreign inflows into the Saudi market, which helps maintain the current market index levels.