By: Thabet Shehata
Riyadh - Mubasher: The Saudi Stock Exchange (Tadawul) saw a negative performance in February, continuing its losses for the second consecutive month, with a decline in the market sectors group and lower levels of liquidity compared to January.
The Tadawul All Share Index (TASI) lost 1.82% or 129.47 points to the level of 6,972.39 points, after it closed in January at the level of 7,101.86 points.
Market capital declined by SAR 25.2 billion ($6.72 billion) to SAR 1.63 trillion ($435.58 billion) by the end of February from SAR 1.66 trillion ($442.3 billion) in January.
The main index closed in red in 10 out of the 20 trading sessions this month, with the biggest drop seen on 27 February when TASI dropped 1.14% - its lowest daily decline rate in a month and a half.
On the other hand, the benchmark closed in green in the other 10 sessions with mostly marginal gains, with the highest registered on 16 February as TASI closed at a rise of 0.81%, reaching its highest level in 13 sessions.
The Saudi market also witnessed the launch of the Nomu-Parallel Market on Sunday 26 February, where trade began on the stocks of seven listed companies in a variety of sectors, with a daily fluctuations limit of 20%.
Financial analyst Rayan Al Kharashi told Mubasher that the parallel market has recently affected the Saudi bourse, since it attracted a number of portfolios, in a time of absence for real stimulus and an increase in Tadawul’s price earnings ratio (P/E).
Traded values decreased to an average of SAR 3.8 billion ($1.01 billion) per session, compared to SAR 4.49 billion ($1.2 billion) last month, with a decline of 15.7%.
The average traded volumes per session also went down 16.7% to 206.75 million shares from around 248 million shares in January.
Al Kharashi added that as the announcement of the first quarter’s financial results approaches, which could also see some declines due to the negative results of 2016, pressure on the market is currently increasing.
In addition, expectations regarding lowering government subsidies in the upcoming period add more pressure on listed companies.
Local newspapers reported that Saudi Arabia plans to raise gasoline prices by 30% beginning July, as part of the campaign to match fuel price levels with those in global markets.
As for the sectors, 13 sectors declined led by media and publishing at 15%, followed by consumer services with 7.5%, banks and telecom with 4% and 2%, respectively, while materials fell by 0.72%.
On the other hand, REITs led the gains in February, rising by 12.55%, followed by utilities with 7.14%, while insurance had the lowest gains by edging up 0.49%.
