Riyadh – Mubasher: Abu Dhabi Investment Company said that investors remain cautious on regional equity markets, but recent events in Saudi Arabia have resulted in an improvement in sentiment.
Markets are still waiting for international events such as the outcome of the upcoming OPEC meeting, the US elections, global central bank policy decisions and regional geopolitical developments, while they expect companies’ annual results and national budget announcements to have an impact on investor sentiment and market direction.
“All eyes were on the Kingdom’s massive $17.5 billion bond sale, which was oversubscribed by a large margin with a final pricing that was significantly tighter than market expectations,” the research firm said.
It added that the sale was not only important for easing some of the country’s short-term liquidity pressures; but it also demonstrated KSA ability to tap global markets for funding on attractive terms and showed investor confidence in the country’s long-term prospects.
The government spending cuts sparked investor fears of a downturn in demand and the private sector facing a ‘perfect storm’ of lower growth, reduced subsidies and more onerous regulation, while it is likely to contribute positively to the economy in the longer term.
Abu Dhabi Investment Company noted that there are a number of companies that have shown encouraging signs of being ready to adapt to the new reality, which encouraged some investors to buy these firms at the right valuation to see healthy returns over a reasonable time frame.
